`[Federal Register Volume 62, Number 46 (Monday, March 10, 1997)]
[Proposed Rules]
[Pages 11005-11035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5316]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
42 CFR Part 484

[BPD-819-P]
RIN 0938-AG81


Medicare and Medicaid Programs; Conditions of Participation for 
Home Health Agencies

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule revises the existing conditions of 
participation that home health agencies must meet to participate in the 
Medicare program. The proposed requirements focus on the actual care 
delivered to patients by home health agencies and the results of that 
care, reflect an interdisciplinary view of patient care, allow home 
health agencies greater flexibility in meeting quality standards, and 
eliminate unnecessary procedural requirements. These changes are an 
integral part of the Administration's efforts to achieve broad-based 
improvements in the quality of care furnished through Federal programs 
and in the measurement of that care, while at the same time reducing 
procedural burdens on providers.

DATES: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on June 9, 
1997, except for comments on information collection requirements, which 
must be received on or before May 9, 1997.

ADDRESSES: Mail written comments (one original and three copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPD-819-P, P.O. Box 7519, 
Baltimore, MD 21207-0519.
    If you prefer, you may deliver your written comments (one original 
and three copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201, or
Room C5-11-17, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-819-P. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue, SW., Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(phone: (202) 690-7890).
    For comments that relate to information collection requirements, 
mail a copy of comments to: Office of Information and Regulatory 
Affairs, Office of Management and Budget, Room 10235, New Executive 
Office Building Washington, DC 20503, Attention Allison Herron Eydt, 
HCFA Desk Officer.
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
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calling the order desk at (202) 512-1800 or by faxing to (202) 512-
2250. The cost for each copy is $8.00.

[[Page 11006]]

As an alternative, you can view and photocopy the Federal Register 
document at most libraries designated as Federal Depository Libraries 
and at many other public and academic libraries throughout the country 
that receive the Federal Register.

FOR FURTHER INFORMATION CONTACT: Susan Levy, (410) 786-9364 and Mary 
Vienna, (410) 786-6940.

SUPPLEMENTARY INFORMATION:

I. Introduction

    As the single largest payer for health care services in the United 
States, the Federal Government has a critical responsibility for the 
quality of care delivered under its programs. Historically, the Health 
Care Financing Administration (HCFA) has adopted a quality assurance 
approach that has been directed toward identifying health care 
providers that furnish poor quality care or fail to meet minimum 
Federal standards. These problems would either be corrected or would 
lead to the exclusion of the provider from participation in the 
Medicare or Medicaid programs. However, we have found that this 
problem-focused approach has inherent limits. Trying to ensure quality 
through the enforcement of prescriptive health and safety standards, 
rather than trying to improve quality of care for all patients, has 
resulted in HCFA expending much of its resources on dealing with 
chronic problems with marginal providers, rather than on stimulating 
broad-based improvements in quality of care.
    We believe that a different approach toward achieving quality 
health care for Federal beneficiaries is needed both to take advantage 
of the continuing advances in the health care delivery field and to 
keep up with growing demands for services. This approach necessitates 
revising our requirements to focus on the expected patient-centered 
outcomes of Medicare services. Thus, for home health services, we have 
developed a core set of requirements encompassing patient rights, 
comprehensive assessment, and patient care planning and coordination. 
Tieing these requirements together is a fourth core requirement--
quality assessment and performance improvement--that rests on the 
assumption that a provider's own quality management system is the key 
to improved performance. Our objective is to achieve a balanced 
approach combining HCFA's responsibility to ensure that essential 
health and quality standards are achieved and maintained with a 
provider's responsibility to monitor and improve its own performance.
    To achieve this objective, we are now developing revised 
requirements for several major health care provider types, including 
the new HHA requirements set forth in this proposed rule as well as 
revised requirements for hospitals, hospices, and end-stage renal 
disease facilities. In addition, elsewhere in today's issue of the 
Federal Register, we are publishing a proposed rule (Use of the OASIS 
As Part of the Conditions of Participation for Home Health Agencies) 
that describes the core standard assessment data set that we are 
proposing to require HHAs to incorporate into the comprehensive 
assessment process. This proposed rule is discussed below in section 
II.D of this preamble. All of these proposals are directed at (1) 
Improving outcomes of care and satisfaction for patients, (2) reducing 
burden on providers while increasing flexibility and expectations for 
continuous improvement, and (3) increasing the amount and quality of 
information available on which to base health care choices and efforts 
to improve quality.
    We note that HCFA's revised approach to its quality assurance 
responsibilities is linked closely both to the Administration's 
commitment to reinventing health care regulations and to HCFA's own 
strategic plan that sets forth our future goals. This regulation is a 
regulatory reform initiative included in the President's and Vice 
President's July 1995 report entitled ``Reinventing Health Care 
Regulations''. In accordance with the President's Reinventing Health 
Care Regulations initiative, HCFA is revising the HHA COPs to eliminate 
unnecessary process regulations and focus on outcomes of care. Thus, 
these initiatives share three common themes. First, they promote a 
partnership between HCFA and the rest of the health care community, 
including the provider industry, practitioners, health care consumers, 
and the States. Second, they are based on the belief that we should 
retain only those regulations that represent the most cost-effective, 
least intrusive, and most flexible means of meeting HCFA's quality of 
care responsibilities. Finally, they rely on the principle that making 
powerful data available to consumers and providers can produce a strong 
nonregulatory force to improve quality of care. We believe that the 
revised HHA requirements proposed below, and the revisions that will 
follow for other providers, will provide the foundation for a health 
care system in which this type of information is readily available. In 
addition, certain provisions in this HHA COP rule support the 
Administration's reinvention initiative combating fraud and abuse. Such 
provisions are designated as serving this objective when appropriate.

II. Background

A. Home Health Care Benefit

    Home health services are covered for the elderly and disabled under 
the Hospital Insurance (Part A) and Supplemental Medical Insurance 
(Part B) benefits of the Medicare program and are described in section 
1861(m) of the Social Security Act (the Act). These services must be 
furnished by, or under arrangement with, an HHA that participates in 
the Medicare program, be provided on a visiting basis to the 
beneficiary's home, and may include the following:
     Part-time or intermittent skilled nursing care furnished 
by or under the supervision of a registered nurse.
     Physical therapy, speech-language pathology, and 
occupational therapy.
     Medical social services under the direction of a 
physician.
     Part-time or intermittent home health aide services.
     Medical supplies (other than drugs and biologicals) and 
durable medical equipment.
     Services of interns and residents if the HHA is owned by 
or affiliated with a hospital that has an approved medical education 
program.
     Services at hospitals, SNFs, or rehabilitation centers 
when they involve equipment too cumbersome to bring to the home.
    Section 1861(o) of the Act specifies certain requirements that a 
home health agency must meet to participate in the Medicare program. 
(Existing regulations at 42 CFR 440.70(d) specify that HHAs 
participating in the Medicaid program must also meet the Medicare 
conditions of participation.) In particular, section 1861(o)(6) 
provides that an HHA must meet the conditions of participation 
specified in section 1891(a) of the Act and such other conditions of 
participation as the Secretary finds necessary in the interest of the 
health and safety of patients of HHAs. Section 1891(a) of the Act 
establishes specific requirements for HHAs in several areas, including 
patient rights, home health aide training and competency, and 
compliance with applicable Federal, State, and local laws.
    Under the authority of sections 1861(o) and 1891 of the Act, the 
Secretary has established in regulations the requirements that an HHA 
must meet to participate in Medicare. These requirements are set forth 
at 42 CFR Part 484, Conditions of Participation: Home

[[Page 11007]]

Health Agencies. The conditions of participation (COPs) apply to an HHA 
as an entity as well as the services furnished to each individual under 
the care of the HHA, unless a condition is specifically limited to 
Medicare beneficiaries. Under section 1891(b) of the Act, the Secretary 
is responsible for assuring that the COPs, and their enforcement, are 
adequate to protect the health and safety of individuals under the care 
of an HHA and to promote the effective and efficient use of Medicare 
funds. To implement this requirement, State survey agencies generally 
conduct surveys of HHAs to determine whether they are complying with 
the conditions of participation.
    B. Why Revise the Conditions of Participation?
    The conditions of participation for HHAs were originally 
promulgated in 1973 and have been revised in part on several occasions. 
In particular, we made significant revisions to the COPs in 1989 (54 FR 
33354) and 1991 (56 FR 32967), largely to implement provisions of 
section 4021 of the Omnibus Budget Reconciliation Act of 1987 (OBRA 
``87, Public Law 100-203), which added section 1891 of the Act. Most 
recently, we made minor revisions to the HHA COPs on December 20, 1994 
(59 FR 65482). However, many of the current COPs have remain unchanged 
since their inception.
    Our decision to propose major changes to the existing conditions is 
based on several considerations. First, as discussed above, the 
revision of the HHA requirements is part of a larger effort by HCFA to 
bring about improvements in the quality of care furnished to Federal 
beneficiaries through a new approach to our quality of care 
responsibilities. Moreover, nowhere is the need for change more acute 
than in home health services. During the 1980's and early 1990's, major 
changes have taken place in the home health benefit, the provider 
industry, home health care practices, and the characteristics of home 
health care users that have combined to make home health services the 
most rapidly growing segment of Medicare expenditures.
    In response to challenges associated with the expanding use of home 
health services, HCFA in 1994 began the Medicare Home Health Initiative 
(Initiative) to identify opportunities for improvement in the Medicare 
home health benefit. The Initiative is an agency-wide effort that 
routinely solicits input and feedback on a wide variety of issues from 
HCFA's partners in the home health care community. Representatives from 
HCFA, consumer groups, the home health care industry, professional 
associations, regional home health intermediaries, and States 
(including State Medicaid agencies) have convened in a series of 
collaborative meetings during 1994 and 1995. Among the Initiative's 
primary recommendations is that HCFA develop HHA COPs that include a 
core standard assessment data set and patient-centered, outcome-
oriented performance expectations that will stimulate continuous 
quality improvement in home health care.
    The existing HHA COPs do not provide patient-centered, outcome-
oriented standards, nor do they provide for the operation of a quality 
assessment and performance improvement program. Historically, we set 
requirements for participation in the Medicare program by establishing 
requirements that address the structures and processes of health care. 
These requirements are largely the result of professional consensus, 
since there are no data supporting the link between structure and 
process requirements and positive patient outcomes. The combination of 
process-oriented requirements with an enforcement approach that focuses 
on identifying providers that do not have the required structures and 
procedures in place will not be adequate to meet the growing challenges 
associated with the changing home health care environment. Thus, we 
have concluded that significant revisions to the HHA conditions of 
participation are essential.

C. Transforming the HHA Conditions of Participation

    As we began to develop new proposed COPs for HHAs, we solicited the 
advice and suggestions of the home health industry, professional 
associations and practitioner communities, as well as consumer 
advocates and State and other governmental agencies with an interest or 
responsibility in HHA regulation and oversight. The fundamental 
principles that guided the development of new COPs were the need to:
     Focus on the continuous, integrated care process that a 
patient experiences across all aspects of home health services, 
centered around patient assessment, care planning, service delivery, 
and quality assessment and performance improvement.
     Adopt a patient-centered, interdisciplinary approach that 
recognizes the contributions of various skilled professionals and how 
they interact with each other to meet the patient's needs. A home care 
patient encounters many services and is exposed to several disciplines, 
given the interdisciplinary approach to home health care delivery. An 
interdisciplinary team approach offers a more accurate portrayal of 
overall patient care outcomes across interdependent functions. Thus, we 
would eliminate requirements that encourage ``stovepipe'' 
administrative and enforcement structures.
     Stress quality improvements, incorporating to the greatest 
possible extent an outcome-oriented, data-driven quality assessment and 
performance improvement program. Thus, the new COPs would invest our 
principal expectations for performance in a powerful requirement that 
each HHA participate in its own quality assessment and performance 
improvement program.
     Facilitate flexibility in how an HHA meets our performance 
expectations, and eliminate outdated process requirements about which 
there was little consensus or evidence that they were predictive of 
good outcomes for patients or necessary to prevent harmful outcomes for 
patients.
     Require that patient rights are assured.
    Finally, in order for the HHA conditions to move from a process/
structure orientation toward an outcome orientation, outcome measures 
must be identified, developed, and validated. As discussed below, we 
have already taken several steps toward the development and 
implementation of a core standard assessment data set that will 
ultimately provide home health consumers, providers, and the regulators 
the data they need to improve quality and focus enforcement, as 
detailed elsewhere in today's issue of the Federal Register.
    Based on these principles, we are proposing new HHA conditions of 
participation that revise or eliminate many existing requirements and 
incorporate critical requirements into four ``core conditions.'' These 
four COPs--Patient Rights, Patient Assessment, Care Planning and 
Coordination of Services, and Quality Assessment and Performance 
Improvement--would focus both provider and surveyor efforts on the 
actual care delivered to the patient, the performance of the HHA as an 
organization, and the impact of the treatment furnished by the HHA on 
the health status of its patients. The first, Patient Rights, 
emphasizes an HHA's responsibility to respect and promote the rights of 
each home health patient. The second proposed core condition, Patient 
Assessment, reflects the critical nature of a comprehensive assessment 
in determining appropriate treatments and accomplishing desired health 
outcomes. Third, the Care Planning and

[[Page 11008]]

Coordination of Services COP would incorporate the interdisciplinary 
team approach to providing home health services. The fourth proposed 
core COP, Quality Assessment and Performance Improvement, would then 
charge each HHA with responsibility for carrying out a performance 
improvement program of its own design to effect continuing improvement 
in the quality of care furnished to its customers.
    In the revised COPs, we are proposing to include process-oriented 
requirements only where we believe they remain highly predictive of 
ensuring desired outcomes and the prevention of harmful outcomes (for 
example, home health aide competency and supervision and timeliness of 
patient assessment). Far more frequently, however, we have eliminated 
process details from the existing requirements and instead included the 
related area of concern as a component that must be evaluated by the 
HHA as part of the HHA's overall quality assessment and performance 
improvement responsibilities. For example, we removed the process 
requirements under existing Sec. 484.12(c) that an HHA and its staff 
must comply with accepted professional standards and principles. We 
transformed the approach by incorporating current clinical practice 
guidelines and professional standards applicable to home care as a 
factor to be considered in the HHA's overall quality assessment and 
performance improvement program. The practical effect of this approach 
would be to stimulate the HHA to find its own performance problems, fix 
them, and continuously strive to improve patient outcomes and 
satisfaction, as well as efficiency and economy.
    We believe that the proposed COPs based on these principles reflect 
a fundamental change in HCFA's regulatory approach, a change that to a 
large extent establishes a shared commitment between HCFA and Medicare 
providers to achieve improvements in the quality of care furnished to 
HHA patients. The proposed COPs invest HHAs with internal 
responsibility for improving their performance, rather than relying on 
an externally-based approach in which prescriptive Federal requirements 
are enforced through the punitive aspects of the survey process. This 
change would enable HCFA and the States to use our resources 
principally in joining with HHAs in partnerships for improvement. This 
change in our regulations to a patient-centered, outcome-oriented 
approach will also likely fundamentally change our approach to the 
survey process. For example, since the proposed regulation sets a 
performance expectation that an HHA constantly improve, it may be 
possible to alter significantly, or possibly eliminate altogether, the 
current Functional Assessment Instrument (FAI) that surveyors use to 
assess the outcomes of care through home visits and some record review. 
In an expanded review of the agency's approach to quality assessment 
and performance improvement, we may approach this task differently, 
with greater flexibility than the current FAI affords. We anticipate 
fewer compliance surveys and the reduced need to threaten or take 
adverse actions that could jeopardize a HHA's reputation, viability as 
a going concern, and participation in the Medicare and Medicaid 
programs. Yet these requirements provide the Secretary and State 
Medicaid agencies with more than adequate regulatory basis for 
compelling improved performance or termination of participation based 
on failure to correct seriously deficient performance that can or does 
threaten the health and safety of patients, or seriously impairs the 
HHA's capacity to provide needed care and services to patients.
    We recognize that the successful implementation of these proposed 
regulations will depend largely on how effectively State and Federal 
surveyors are able to learn, use, and internalize this patient-
centered, outcome-oriented approach and incorporate it into the survey 
process. The approach embodied in these regulations, is consistent with 
the approach that we have taken in survey and certification, beginning 
as early as 1985 (in intermediate care facilities for the mentally 
retarded) and 1986 (in nursing homes). In concert with the States, we 
have trained surveyors to develop information from the survey process 
that leads to conclusions about how the provider's performance has 
impacted--positively and negatively--on patients, especially in terms 
of the care and services that patients actually experience. For 
example, for many years, in nursing homes surveyors have been trained 
to interview residents and family members, seeking information that 
contributes to their assessment of how the nursing home's performance 
is experienced by the residents and their families. Before the use of 
outcome oriented surveys, surveyors focused on record reviews and 
observing care processes and organizational structures.
    These proposed regulations contain two critical improvements that 
support and extend our focus on patient-centered, outcome-oriented 
surveys. First, the proposed regulations are designed to enable 
surveyors to focus explicitly on assessing outcomes of care, because 
the regulations would specify that each individual receiving the care, 
his or her assessed needs demonstrate is necessary (rather than 
focusing simply on the services and processes that must be in place). 
Second, the addition of a strong quality assessment and performance 
improvement requirement not only stimulates the provider to 
continuously monitor its performance and find opportunities for 
improvement, it also affords the surveyor the ability to assess how 
effectively the provider has been pursuing a continuous quality 
improvement agenda. All of the changes are directed toward improving 
outcomes of care.
    We have already begun the process of identifying the tasks 
necessary to train surveyors and their supervisors and managers 
effectively in this refined, expanded approach. In addition, HCFA is 
implementing a new State survey agency quality improvement program that 
is designed to help State survey agencies increase their focus on 
improvement strategies in the survey and certification process. As more 
sources of performance data and other performance information become 
available, we will work with State survey agencies to determine how to 
use the data effectively to target scarce survey resources and to 
identify and implement opportunities for improvement (such as reduction 
in pressure sores or improvements in medication management in home care 
patients).
    We believe that the proposed COPs would decrease the regulatory 
burden on HHAs and provide them with greatly enhanced flexibility. At 
the same time, the proposed requirement for a program of continuous 
quality assessment and performance improvement would increase 
performance expectations for HHAs in terms of achieving needed and 
desired outcomes for patients and increasing patient satisfaction with 
services provided.
    We recognize that there are those who fundamentally believe that 
regulations, particularly when they directly affect the health and 
safety of people, should be prescriptive in their detail in order to 
ensure that providers do not engage in practices that threaten patient 
health and safety or to increase the clarity of intent, just as there 
are those who support strongly our change in approach. We invite 
comment on this fundamental shift in our regulatory approach and any 
other concerns HHAS may have regarding their ability both operationally 
and financially to undertake this new approach. We are

[[Page 11009]]

especially interested in comments that address how HCFA could improve 
this approach, what additional flexibility could be provided, what (if 
any) process requirements that are critical to patient care and safety 
should be added, and how well HCFA's investment in the HHA's 
participation in a strong continuous quality assessment and performance 
improvement program of their own design will achieve our stated and 
intended goal of improving the efficiency, effectiveness, and quality 
of patient outcomes and satisfaction.

D. Incorporation of a Core Standard Assessment Data Set into the HHA 
Conditions of Participation

    Elsewhere in today's issue of the Federal Register, we are 
proposing to require HHAs to incorporate a core standard assessment 
data set, the Outcomes and Assessment Information Set (OASIS), into the 
comprehensive assessment process and the quality assessment and 
performance improvement programs. The incorporation of OASIS represents 
the first step toward implementing HCFA's plans to use outcome-based 
quality measures in home health services.
    The details of how the OASIS was developed and tested, as well as 
how it can be used are explained in the OASIS proposed rule, along with 
the specific proposed regulatory language intended to achieve the 
stated purpose of introducing the OASIS into the HHA program.

III. Provisions of the Proposed Regulations

A. Overview

    Under our proposal, the HHA conditions of participation would 
continue to be set forth in regulations under 42 CFR part 484. However, 
since many of the existing requirements in part 484 would be revised, 
consolidated with other requirements, or eliminated, we are proposing a 
complete overhaul of the existing organizational scheme. The most 
significant change would be our proposal to group together all COPs 
directly related to patient care and place them near the beginning of 
part 484. COPs concerning the organization and administration of an HHA 
would follow in a separate subpart. We believe this organization is in 
keeping with the patient-centered orientation of these regulations and 
helps illustrate our view that patient assessment, care planning, and 
quality assessment and improvement efforts are central to the delivery 
of high quality care.
    The proposed organizational format for part 484 is as follows:

PART 484--CONDITIONS OF PARTICIPATION: HOME HEALTH AGENCIES

Subpart A--General Provisions

Sec.
484.1  Basis and Scope
484.2  Definitions

Subpart B--Patient Care

484.50  Condition of Participation: Patient Rights
484.55  Condition of Participation: Comprehensive Assessment of 
Patients
484.60  Condition of Participation: Care Planning and Coordination 
of Services
484.65  Condition of Participation: Quality Assessment and 
Performance Improvement
484.70  Condition of Participation: Skilled Professional Services
484.75  Condition of Participation: Home Health Aide Services

Subpart C--Organizational Environment

484.100  Condition of Participation: Compliance with Federal, State, 
and Local Laws
484.105  Condition of Participation: Organization and Administration 
of Services
484.110  Condition of Participation: Clinical Records
484.115  Personnel Qualifications for Skilled Professionals

B. Proposed Subpart A, General Provisions

    Like the existing COPs, the revised conditions would begin with a 
brief section (proposed Sec. 484.1) that would specify the statutory 
authority for the ensuing regulations. The only change proposed in this 
section would be the elimination of the reference to the statutory 
authority for an HHA's institutional planning responsibilities 
(existing Sec. 484.1(a)(2)). This change reflects our proposal to 
eliminate from the HHA COPs a restatement of the statutory requirements 
at section 1861(z) of the Act concerning institutional planning. See 
section III.D of this proposed rule for a further discussion of this 
issue.
    Under proposed Sec. 484.2, we would set forth definitions for terms 
used in the HHA COPs that we believe need clarification. We are 
proposing to eliminate existing definitions for several terms for which 
we believe meaning is self-evident, such as ``HHA,'' ``nonprofit 
agency,'' or ``bylaws,'' as well as for terms that would not be 
included in the revised COPs. We are proposing to delete the current 
definitions for ``subdivision'' and ``subunit'' because the terms draw 
distinctions for participation and payment for which there are no 
differences. We are proposing to delete the current definitions for 
``clinical note,'' and ``progress note,'' and ``summary report'' 
because the terms are commonly accepted as documentation requirements 
reflecting good medical practice to assess the individual's reaction or 
response to services furnished. We believe that the focus should be on 
documentation of the actual care provided to the individual via the 
interdisciplinary team within the comprehensive assessment, plan of 
care, and clinical record rather than the term used to describe the 
entry. We are deleting the definition for supervision from this section 
and incorporating the concept under the proposed skilled professional 
services COP. We are soliciting comments on the feasibility of a 
consolidated definition section in the Code of Federal Regulations 
(CFR) for definitions that are applied consistently throughout the 
Medicare program.
    The definitions that would be included under proposed Sec. 484.2 
are as follows:
    Branch means a location or site from which a home health agency 
provides services within a portion of the total geographic area served 
by the parent agency. The branch office is part of the home health 
agency and is located sufficiently close to share administration, 
supervision, and services in a manner that renders it unnecessary for 
the branch independently to meet the conditions of participation as a 
home health agency.
    Parent HHA means the agency that develops and maintains 
administrative control of branches.
    Quality indicator means a specific, valid, and reliable measure of 
access, care outcomes, or satisfaction, or a measure of a process of 
care that has been empirically shown to be predictive of access, care 
outcomes, or satisfaction.
    With the exception of ``quality indicator,'' all of these terms are 
defined in the same way as in existing Sec. 484.2. We are adding a 
definition for the term ``quality indicator'' because, as discussed 
above, the use of quality indicators is central to an HHA's successful 
implementation of a quality assessment and performance improvement 
program.
    We note that we would not retain the provisions of existing 
Sec. 484.4, Personnel qualifications, under proposed subpart A, General 
Provisions. As discussed in detail in section III.D of this preamble, 
we are proposing major modifications to the prescriptive personnel 
qualification requirements now in place. Remaining requirements would 
be set forth under proposed Sec. 484.115.

C. Proposed Subpart B, Patient Care

[[Page 11010]]

1. Patient Rights (Proposed Sec. 484.50)
    Section 1891(a)(1) of the Act establishes as a Medicare COP that an 
HHA must protect and promote the rights of each individual under its 
care. These rights encompass being informed in advance regarding the 
care to be provided and having an opportunity to participate in care 
planning; voicing grievances; confidentiality of records; respect for 
property; being informed about specific coverage and noncoverage of 
services; and availability of information in writing and through a home 
health services hotline. These statutory provisions are incorporated in 
existing regulations at Sec. 484.10.
    We would retain these statutory provisions in the proposed 
regulations and redesignate existing Sec. 484.10 as proposed 
Sec. 484.50, the first core COP, and also the first COP in proposed 
Subpart B, Patient Care. We are proposing one substantive change to the 
patient rights provisions. Specifically, we would expand the standard 
under existing paragraph (c)(l) relating to informing the patient in 
advance regarding care and treatment to be provided by the home health 
agency. We propose to specify that the patient must also be informed 
about ``expected outcomes'' of treatment and ``barriers'' to treatment. 
We believe that these revisions represent an additional safeguard of 
patient health and safety. Open communication between HHA staff and the 
patient and access of the patient to treatment information are vital 
tools for enhancing the patient's participation in his or her 
coordinated care planning. In addition, there are many environmental 
factors (for example, lack of nutrition and lack of family and 
emotional support) that are barriers that could impact the 
effectiveness of treatment decisions.
2. The Cycle of Care: Assessment, Planning, and Delivery
    The patient care assessment, planning, and treatment process that 
is embodied in the next three COPs can be seen as a cycle. Through the 
use of a comprehensive assessment, accurate and timely patient 
information is made available for use in the patient treatment process. 
The treatment process is the actual interdisciplinary care furnished to 
the patient. The patient treatment process results in an effect on the 
patient's condition, whether it is positive, negative, or neutral. An 
HHA's assessment of the effect of treatment then enters into subsequent 
treatment decisions, and the cycle of comprehensive assessment 
continues. Through this cycle, accurate patient information yielded 
from each comprehensive assessment will result in more effective and 
appropriate treatment decisions, thus generating a positive effect on 
treatment decisions and yielding desired outcomes.
a. Comprehensive Assessment of Patients (Proposed Sec. 484.55)
    Introduction The proposed Comprehensive Assessment of Patients COP 
reflects the patient-centered, interdisciplinary approach of the 
proposed COPs and underscores our view that systematic patient 
assessment is essential to improving quality of care and patient 
outcomes.
    Patient assessment contributes to quality of care improvements in 
three closely linked stages. First, the information generated from an 
interdisciplinary, comprehensive assessment of each patient is a vital 
tool for developing a patient's care plan and making individual 
treatment decisions. An HHA would then track the patient's progress 
towards achieving the desired care outcome and make appropriate changes 
to the patient's plan of care and treatment. As an HHA carries out this 
process on a repeated basis, the second contribution of patient 
assessment becomes clear. That is, the HHA is able to evaluate the 
results of its treatment decisions on an aggregate basis. Thirdly, 
accurate patient information yielded from the comprehensive assessment 
process would inform the HHA's future care planning process, generating 
continuing improvements in an HHA's treatment decisions and ability to 
produce desired patient outcomes. We believe that these internal 
quality improvement strategies reflect contemporary standard practice 
for many HHAs, and we are proposing to revise the COPs to support this 
outcome-oriented approach.
    These first two uses for comprehensive patient assessment data 
basically involve short-term strategies that can be implemented by 
individual HHAs. In this proposed rule, however, we are also laying the 
foundation for a long-term strategy in which HCFA would use assessment 
information from many HHAs to define and measure care outcomes for home 
health care users. As discussed above, these quality indicators could 
then be built into a national data system for use by HHAs to improve 
the quality of care they provide and by HCFA to monitor patient 
outcomes.

Proposed Patient Assessment Requirements

    The primary requirement under the proposed COP would be that each 
patient receive from the HHA a patient-specific, comprehensive 
assessment that identifies the patient's need for home care and that 
meets the patient's medical, nursing, rehabilitative, social, and 
discharge planning needs. For Medicare patients, identifying the need 
for home care would include the assessment an individual's homebound 
status. An individual's homebound status is a critical eligibility 
requirement. This requirement would promote program integrity because 
it is the first regulatory requirement that directly evaluates 
homebound status.
    Under our proposal, each HHA would have the responsibility and the 
flexibility to determine the content and process of its own patient 
assessment, within the broad requirement that it identifies the 
patient's care and discharge planning needs. The intent of requiring 
patient-specific comprehensive assessments is to avoid the use of 
``canned'' patient assessments that do not reflect the individual needs 
of each patient. The comprehensive assessment must fully reflect each 
individual patient situation.
    We are also proposing to require that the assessment must 
incorporate the use of a core standard assessment data set that is 
established by HCFA as a regulatory requirement under the comprehensive 
assessment condition elsewhere in this issue of the Federal Register. 
The data set includes only information necessary to measure outcomes of 
care for quality indicators; thus, our intent is not to develop a 
complete patient assessment but rather to identify standardized data 
elements that fit within the HHA's overall comprehensive assessment 
responsibilities. That is, the incorporation of the core standard 
assessment data set will complement the HHA's current approach to 
comprehensive assessment.
    The existing COPs contain several requirements that address the 
need for patient assessment, including most notably a long and detailed 
list of items under existing Sec. 484.18(a) that are required to be 
covered in a plan of care, such as pertinent diagnoses, mental status, 
and functional limitations. In place of this requirement, we would 
emphasize the importance of the comprehensive assessment by 
establishing patient assessment as a separate COP, specifying the 
desired outcome of the assessment (that is, the identification of a 
patient's care needs), and then allowing HHAs the flexibility to 
determine how best to achieve this outcome. We believe that this 
approach is consistent with current accepted practices in HHAs and that 
most HHAs

[[Page 11011]]

now perform a comprehensive assessment for most of their patients.
    The first standard under the proposed comprehensive assessment COP 
concerns drug regimen review (proposed Sec. 484.55(a)). Under this 
standard, we would retain the existing requirement of a drug regimen 
review from Sec. 484.18(c), but would clarify the requirements by 
eliminating the identification of ``adverse actions'' and 
``contraindicated medications'' and substituting the more concise 
requirements of review for drug interactions, duplicative drug therapy 
and noncompliance with drug therapy. This modification narrows the 
scope of the drug regimen review, provides accountability, and focuses 
the assessment toward data predictive of a significant patient outcome.
    The second proposed standard sets forth the requirements for the 
initial assessment visit. Specifically, at proposed Sec. 484.55(b), we 
propose that a registered nurse must perform an initial assessment 
visit based on physician's orders to determine the immediate care and 
support needs of the patient either within 48 hours of referral or 
within 48 hours after the patient's return home, or within 48 hours of 
the physician-ordered start of care date, if that is later. If 
rehabilitation therapy services are the only services ordered by the 
physician, the initial assessment would be made by the appropriate 
rehabilitation skilled professional. We welcome comments on the 
appropriateness of using competent individuals other than a registered 
nurse or appropriate therapist to perform initial patient assessments. 
We also invite comments on the feasibility of permitting the delegation 
of nursing responsibilities within the scope of State nurse practice 
acts to competent individuals.
    The third standard (proposed Sec. 484.55(c)) would specify the 
timeframe in which the HHA must complete the comprehensive assessment. 
We propose that the HHA must complete the comprehensive assessment in a 
timely manner consistent with the patient's immediate needs, but no 
later than 5 working days after the start of care.
    The fourth standard (proposed Sec. 484.55(d)) concerns updates of 
the comprehensive assessment. We would provide that the comprehensive 
assessment must discuss the patient's progress toward clinical outcomes 
and be updated and revised as frequently as the patient requires, but 
no less frequently than every 62 days from the start of care date, 
which is when the patient's plan of care is revised for physician 
review and when the patient is discharged.
    These proposed standards essentially would replace the requirements 
concerning the duties of the registered nurse under the existing 
skilled nursing services COP (Sec. 484.30(a)). Currently, a registered 
nurse must regularly reevaluate the patient's nursing needs, initiate 
the plan of care and necessary revisions, prepare clinical and progress 
notes, coordinate services, and inform the physician and other 
personnel of changes in the patient's condition and needs. The existing 
requirement emphasizes the patient information process. In contrast, 
the proposed comprehensive assessment COP would focus on ensuring that 
all critical information concerning a patient is routinely incorporated 
through timely assessments that identify a patient's initial and 
changing needs.
    Under proposed Sec. 484.55 (b) and (c), we are proposing specific 
timeframes for the initial assessment, completion of the assessment, 
and interim updates to the patient assessment. We believe that these 
requirements, though process-oriented, are predictive of good patient 
care and safety, as well as necessary to prevent harm to the patient. 
Our rationale for these timeframes is that by definition, a new patient 
being referred to a home health agency for initiation of services is at 
a point of immediate and serious need, especially as patients are 
returned home from hospital care sooner than ever before. Likewise, as 
the complexity of the care needs of patients increases, so does the 
need for comprehensive assessment of the patient, and the importance of 
implementing an effective care plan promptly becomes paramount.
    We believe that these requirements pose little or no burden for the 
well-managed home health agency since they would in all likelihood be 
performed in the absence of regulations. However, the proposed 
timeframes serve as a strong performance expectation for HHAs that may 
not have adequate resources (financial and human resources) by setting 
the outside acceptable time for these activities to occur. If too many 
patient referrals occur together, some patients might be neglected or 
harmed by the HHA's inability to see the patient quickly or to conduct 
and complete the needed comprehensive assessment so effective service 
delivery can begin. Thus, if an HHA recognizes that its workload is 
such that it is not capable of beginning work with a patient virtually 
immediately upon referral, the patient should not be accepted for care.
    Under proposed Sec. 484.55(d), we are proposing that the 
comprehensive assessment be updated as frequently as the patients 
condition requires but not less frequently than every 62 days, for 
several reasons:
    (1) Especially in the early stages of care, patient needs, 
progress, and circumstances can change greatly, and changes in the 
status of the patient can and should prompt changes in approaches to 
care, so reassessment as needed helps to inform the revision of the 
care plan and service delivery;
    (2) When HCFA and the home health community are prepared to begin 
collecting and utilizing quality indicator data (which will come from 
the core standard assessment data set), it will be necessary for the 
HHA to report the data on a regular basis. The developers of the core 
standard assessment data set have found the roughly 2-month timeframe 
to be an effective interval for data points for comparison purposes, 
which also coincides well with the recertification timeframe in item 
(3) below; and
    (3) An HHA is required to have the patient recertified for 
continued care every 62 days, which serves as a logical point for 
updating an assessment if no updates have already been completed.
    We welcome comments on whether the specific proposed timeframes in 
the regulation text are reasonable and consistent with current medical 
practice, and whether the timeframes should be used as benchmarks to 
reflect patient health and safety concerns involving the timeliness of 
the assessment components.
3. Care Planning and Coordination of Services (Proposed Section 484.60)
    Currently, the condition of participation concerning the plan of 
care is set forth at Sec. 484.18. We propose to revise the contents of 
this section, and place them in a new condition, ``Care planning and 
coordination of services'' (proposed Sec. 484.60). This condition would 
contain four standards that reflect the interdisciplinary approach to 
home health care delivery. The standards are discussed in detail below.
    This proposed COP would first state the fundamental requirement 
that the patient's plan of care must specify the care and services 
necessary to meet the patient's specific needs as identified by the 
physician and in the comprehensive assessment, and the measurable 
clinical outcomes that the HHA expects will occur as a result of 
implementing the plan of care. Again, a clinical outcome can be defined 
as a change in an individual's health between two or more points in 
time. We would retain the existing requirement that patients are 
accepted for treatment on the basis of a

[[Page 11012]]

reasonable expectation that the patient's medical, nursing, and social 
needs can be met adequately by the agency in the patient's place of 
residence.
    In accordance with our goal of eliminating prescriptive 
requirements that do not directly relate to patient care, we have 
simplified the plan of care standard at existing Sec. 484.18(a). The 
first standard under this condition, ``Plan of Care,'' set forth at 
proposed Sec. 484.60(a), would require that all home health services 
must follow a written plan of care established and periodically 
reviewed by a doctor of medicine, osteopathy, or podiatric medicine in 
accordance with Sec. 409.42. We would specify that all patient care 
orders must be included in the plan of care. We believe that our 
proposal would decrease the burden on HHAs and would allow agency staff 
to develop care plans that best suit the needs of the patients they 
serve.
    Under the second proposed standard, ``Review and revision of the 
plan of care'', we would add to the language at existing 
Sec. 484.18(b). The current requirement that the physician and the HHA 
review the plan of care as frequently as the patient's condition 
requires but not less than once every 62 days would be retained, with 
the additional clarification that this period begins with the date of 
start of care. We would continue to require that the HHA promptly alert 
the physician to any changes in the patient's condition that suggest a 
need to alter the plan of care. We would also extend the current 
requirement to specify that the HHA must promptly alert the physician 
if measurable outcomes are not being achieved. If measurable outcomes 
are not being achieved, the HHA must review, assess, and document the 
patient's responses to his or her current medical and environmental 
situation (including barriers to care), and implement a physician's 
revised plan of care as often as necessary to meet the patient's needs. 
At a minimum, revised plans of care should be established and 
implemented when a patient experiences significant changes in his or 
her medical condition or functional capacity. An example of an 
environmental situation that would be considered a barrier to care 
would be a patient who was not receiving proper nutrition. In such a 
case, the agency staff would document the situation and revise the plan 
of care accordingly. We believe that these requirements would reflect 
our outcome-oriented approach to patient care in that they would 
require the HHA to focus on the patient's responses to treatment 
decisions. Additionally, these requirements would not impose a burden 
on HHAs since agencies are already required to complete a plan of care 
for each patient. These requirements would be set forth at proposed 
Sec. 484.60(b)(1). We are soliciting comments on the need for frequent 
regular physician reviews of plans of care for patients who are only 
receiving personal care services.
    Under Sec. 484.60(b)(2), we propose to require that a revised plan 
of care must include current information from the patient's 
comprehensive assessment and information concerning the patient's 
progress toward outcomes specified in the plan of care. We are 
soliciting comments on the utility of adding an additional requirement 
that would require the original plan of care that initiates care to be 
reviewed and revised in a timely manner consistent with the patient's 
immediate needs, but no later than 5 to 10 working days after the 
completion of the comprehensive assessment. This would ensure that the 
plan of care would be revised to reflect the incorporation of the 
completed comprehensive assessment, which must be completed in a timely 
manner consistent with the patient's immediate needs, but no later than 
5 working days after the start of care. This additional requirement 
would ensure the link between the completed comprehensive assessment 
and a revised plan of care.
    In the third standard, ``Conformance with physician orders'', we 
would retain language at existing Sec. 484.18(c). In December 1994, we 
revised this standard to require that oral orders be put in writing and 
signed and dated with the date of receipt by the registered nurse or 
qualified therapist responsible for furnishing or supervising the 
ordered services (59 FR 65482). We also provided that oral orders are 
only accepted by personnel authorized to do so by applicable State and 
Federal laws and regulations as well as by the HHA's internal policies. 
We would include these standards in the Care planning and coordination 
of services condition under proposed Sec. 484.60(c).
    We propose to add a new standard, Coordination of care, at 
Sec. 484.60(d). This standard would incorporate provisions at existing 
Sec. 484.14(g) (Organization, services, and administration, Standard: 
Coordination of patient services), which requires that all personnel 
furnishing services maintain liaison to ensure that their efforts are 
coordinated effectively and support the plan of care, and that the HHA 
must document such liaison. Our proposed standard would go beyond this 
requirement by linking the level of the coordination of services, 
caregivers and the patient to identifiable care need and barriers to 
care and by requiring HHAs to adjust the degree of coordination to meet 
the needs of the patient. Specifically, we would require the HHA to 
maintain a system of communication and integration of services, whether 
provided directly or under arrangement, that ensures the identification 
of patient needs and barriers to care, the ongoing liaison between all 
disciplines providing care, and the contact of the physician for 
relevant medical issues. Additionally, we would require the HHA to 
identify the level of coordination necessary to deliver care to the 
patient and involve the patient and the caregiver in the coordination 
of care.
    We believe that this standard is appropriate for a number of 
reasons. Since a home care patient may encounter many services 
delivered at different times by a variety of individuals with different 
skills, efficient communication and integration among members of the 
home health team is essential in responding to patient needs in a 
timely and effective manner. Further, effective coordination of 
services is necessary to avoid duplicative or conflicting services. 
Finally, we recognize that an interdisciplinary approach to the 
delivery of home health services reflects actual practice for most home 
health agencies, and we believe that, when possible, our regulations 
should coincide with current industry practice.
4. Quality Assessment and Performance Improvement (Proposed Section 
484.65)
    We are proposing to eliminate two conditions of participation, 
existing Sec. 484.52, Evaluation of the agency's program, and existing 
Sec. 484.16, Group of professional personnel, and replace them with a 
single, new quality assessment and performance improvement condition of 
participation. Existing regulations for HHAs do not provide for the 
operation of a quality assessment and performance improvement program 
whereby the HHA examines its methods and practices of providing care, 
identifies opportunities to improve its performance, and then takes 
actions that result in better outcomes of care and satisfaction for the 
HHA's patients. In light of our intention to raise the performance 
expectations for HHAs seeking entrance into the Medicare program as 
well as those currently participating, HCFA is proposing that each HHA 
develop, implement, and maintain an effective, data-driven quality 
assessment and performance improvement program. We believe this

[[Page 11013]]

requirement would stimulate an HHA to continuously monitor and improve 
its own performance and to be responsive to the needs, desires, and 
satisfaction of its patients. This proposed new requirement epitomizes 
the approach of these new COPs in that it provides a constant 
expectation for improved performance, in contrast to the current 
approach that only sets a floor of structural and procedural 
requirements that are intended to be surrogate measures for ensuring 
quality. This condition is intended to set up a self-sustaining system 
for improvement, under which an HHA monitors its performance to a point 
that surveyor findings would confirm an HHA's own assessment of where 
performance improvements are needed.
    We have not prescribed the structures and methods for implementing 
this requirement, and have focused the condition of participation on 
the expected results of the program, that is, quality indicators and 
other outcome-oriented measures. This provides flexibility to the HHA, 
as it is free to develop a creative program that meets the HHA's needs 
and reflects the scope of its services.
    Currently, the first COP that addresses quality of care (existing 
Sec. 484.52, Evaluation of the agency's performance), provides for the 
evaluation of the agency's total program at least once a year. The 
agency must have written policies requiring the evaluation, the 
evaluation must include a review of the HHA's policies and 
administrative practices, and the results of the evaluation must be 
separately recorded and maintained as administrative records. The 
agency must also review a sample of open and closed clinical records at 
least on a quarterly basis. The second condition of participation that 
addresses quality of care (existing Sec. 484.16, Group of professional 
personnel), requires a group of professional personnel, which includes 
at least one physician and one registered nurse, to establish and 
annually review the agency's policies governing the scope of services 
offered, admission and discharge policies, medical supervision of plans 
of care, clinical records, personnel qualifications and program 
evaluation. This group is required to meet frequently to advise the 
agency on professional issues, to participate in the evaluation of the 
agency's program and assist in liaison functions. Minutes of the 
group's meetings must be documented. These requirements focus on the 
meetings and documentation of the agency's evaluation of their quality 
of care and do not account for the outcome of these activities.
    Instead of continuing to prescribe the structures and processes by 
which an HHA evaluates its services, we have identified the outcomes 
expected of an agency that assesses its performance and improves the 
services that it provides to beneficiaries and set forth under proposed 
Sec. 484.65 the required major components of an effective quality 
assessment and performance improvement program. Our expectation is that 
the HHA will successfully operate a continuous quality assessment and 
performance improvement program on behalf of its beneficiaries. We 
believe this is a reasonable expectation, for which the HHA can and 
should be held accountable.
    Previously, the only motivation for quality improvement for some 
HHAs was the adverse effect of having been found by surveyors to be out 
of compliance with one or more conditions of participation and 
threatened with termination from the Medicare program. With an 
effective quality assessment and performance improvement program, the 
HHA can identify and reinforce the activities that it is doing well and 
seek out and respond to opportunities for improvement on a continuous 
basis. The desired outcome of this proposed requirement is that the HHA 
itself, rather than the survey process, will be the driving force for 
continuous improvements, enabling HCFA to focus its resources on 
supporting that effort and on HHAs that fail to meet the requirements, 
even after efforts have been made to improve performance.
    The proposed condition requires the HHA to develop, implement, and 
evaluate an effective, data-driven quality assessment and performance 
improvement program. The program must reflect the complexity of HHA's 
organization and services (including those provided directly or under 
arrangement). The HHA must take actions that result in improvements in 
the HHA's performance across the spectrum of care.
    The first standard at proposed Sec. 484.65(a) requires that an 
HHA's quality assessment and performance improvement program must 
include, but not be limited to, the use of objective measures to 
demonstrate improved performance with regard to:
    (1) Quality indicator data (derived from patient assessments) to 
determine if individual and aggregate measurable outcomes are achieved 
compared to a specified previous time period. The terms ``quality 
indicators,'' ``performance measures,'' and ``outcome measures'' are 
often used interchangeably, though technically, they vary somewhat in 
meaning. Regardless, they all refer to attributes of care and 
satisfaction that can be used to gauge quality of care in specific 
aspects of care. For example, the degree and rate of improvement in a 
functional area (such as the ability to walk after a hip replacement) 
can be shown to be a quality indicator. The method of defining and 
measuring that improvement is the ``performance measure'' or ``outcome 
measure.'' These measures assign a specific value to the care dimension 
being measured. The appropriateness of the combination of services 
reflected on the plan of care, the effectiveness of the communication 
among the interdisciplinary team, or the competency of the mix of 
professionals used on the team to implement the services could all be 
possible indicators of the outcome-oriented performance expectations 
that should stimulate ongoing quality improvement in home health care 
delivery.
    Some measures, though, are of processes of care that are predictive 
of outcomes of care. These process measures quantify one or more 
dimensions of the manner in which care is actually provided or 
administered (or negatively, is not provided or administered). A 
process measure such as the number of times a service is provided may 
be directly related to the rate of improvement (or lack of improvement) 
of the patient. So, a valid and reliable process measure can be shown 
to be predictive of patient outcomes, therefore, a quality indicator.
    The core standard assessment data set, described in detail 
elsewhere in today's issue of the Federal Register, contains tested and 
validated indices of functional status over time and satisfaction of 
patients that have been shown to reflect quality of care. Once we have 
completed the rulemaking necessary to implement the use of this data 
set, each HHA will collect and evaluate these standard data as a part 
of providing care and managing the quality assessment and improvement 
program, but will not be required to report it. This information will 
help the HHA to improve its services and the outcomes and satisfaction 
that patients experience. Later, when we subsequently implement the 
requirement to begin reporting the quality indicator data, the HHA will 
be able to receive the aggregated and analyzed data from the universe 
of HHAs to compare its performance with others.
    (2) Current clinical practice guidelines and professional practice 
standards applicable to home care. Contemporary care practices in an 
increasingly complex and fragmented

[[Page 11014]]

health care environment are rapidly changing. Home care is now provided 
routinely to very ill persons and persons with severe physical, 
medical, and other challenges. We expect an HHA to pursue the latest 
clinical practice guidelines and professional standards for use in its 
quality assessment and performance improvement program. Continuous 
improvement is only possible through the identification and use of 
continuously improved information, techniques, and practices. Much of 
this information also can be used by patients and their families to 
enable them to be more independent and play a more effective role in 
the home care process. While HCFA is not imposing any specific 
standards of practice, this proposed requirement establishes the 
expectation that the HHA will seek and utilize the latest standards as 
a routine part of its daily business.
    (3) Utilization data, as appropriate. HHAs currently collect and 
monitor utilization data in order to evaluate their fiscal and 
competitive well-being. This information can also be used to evaluate 
the quality of care, as HHAs become aware of how their performance 
compares with other HHAs. Eventually, we intend that the HHA will use 
the utilization data from its own practices to compare with other HHAs 
across the nation. The purpose of including utilization data in the 
HHA's quality assessment and performance improvement program is to help 
the HHA ensure the patient receives only the number of visits that are 
necessary to achieve needed and desired outcomes. Utilization data will 
also be used as part of HCFA's external quality assurance monitoring, 
enabling the agency to target reviews of HHAs whose utilization data 
suggest, for example, that patients may be receiving fewer (or more) 
visits than necessary to achieve expected outcomes.
    (4) Patient satisfaction measures. Beneficiary satisfaction with 
home health services is an important element of a quality assessment 
and performance improvement program. Under our proposal, an HHA would 
develop and implement specific measures on an ongoing basis to 
determine from patients and their families whether they are satisfied 
with services provided and outcomes achieved and the extent to which 
the HHA respected their rights. We expect that an HHA would use this 
information to search for opportunities to improve services and patient 
satisfaction. We do not intend to prescribe to specific tools for 
measuring patient and family's views, but we do intend to ask the HHA 
during a survey to demonstrate its patient rights and satisfaction 
measurement system and how it is used as part of the overall internal 
quality assessment and performance improvement program.
    (5) Effectiveness and safety of services (including complex high 
technology services, if provided), including competency of clinical 
staff, promptness of services, and whether patients are achieving 
treatment goals and measurable outcomes. For patients to experience the 
needed and desired outcomes that the Medicare home health benefit is 
intended to achieve, staff must be able to demonstrate the skills and 
competencies necessary to enable patients to achieve needed and desired 
outcomes. The HHA is expected to include data-based, criterion-
referenced performance measures of staff skills, to utilize that data 
to ensure that staff maintain skills, and to provide training as new 
techniques and technologies are introduced and as new staff arrive. We 
intend that the HHA would be able to demonstrate that it has a system 
of appropriate complexity for keeping track of the skills and 
competencies of the staff and that effectively identifies and addresses 
training needs. These ``data'' should be an integral part of the HHA's 
internal quality assessment and performance improvement program, 
providing continuous feedback on staff performance. The physicians and 
other staff are in a unique position to provide the HHA's management 
with structured feedback on the performance of the HHA and ways in 
which the performance can be improved. The physicians and other staff 
are customers also, whose needs and contributions to quality 
improvements are significant. The HHA's internal quality assessment and 
performance improvement program is expected to view staff as full 
partners in quality improvement, and we expect the HHA to demonstrate 
how physicians and staff contribute to the internal quality improvement 
of the HHA. This proposed requirement is linked directly to the 
proposed requirement that the HHA include in its quality assessment and 
performance improvement program current clinical practice guidelines 
and standards of practice.
    Thus, we expect that the HHA will immediately correct problems that 
are identified through the quality assessment and performance 
improvement program that actually or potentially affect the health and 
safety of patients. For example, if the quality assessment and 
performance improvement program identifies problems with the accuracy 
of medication administration, it is not enough for the HHA to consider 
this area as a candidate for an improvement program that may or may not 
be chosen from a list of potential projects. Rather, since the accuracy 
of medication administration is critical to the health and safety of 
patients, the HHA must intervene with a correction and improvement 
approach immediately.
    When we use the word ``measure,'' we mean that the HHA must use 
objective means of tracking performance that enable both the HHA and 
the survey agency to identify the differences in performance between 
two, points in time. For example, a measure that states an HHA is 
``doing better'' as a result of an improvement approach would be 
unacceptable. There must be identifiable units of measure that any 
reasonably knowledgeable person would be able to distinguish as 
evidence of change. Not all objective measures must have been shown to 
be valid and reliable (that is, subjected to scientific development), 
to be useable in improvement approaches, but they must at least 
identify a start point and end point stated in objective terms that 
actually relate directly to the objectives and expected/desired 
outcomes of the improvement program.
    Under the second standard at Sec. 484.65(b), we are proposing that 
the HHA must take actions that result in performance improvements and 
must track performance to assure that improvements are sustained over 
time. This requirement links the quality assessment and performance 
improvement program to a pattern of actions over time. The focus is on 
the pattern of behavior recognized by the HHA and how the HHA used its 
own experience to continuously strive for improvements.
    The third standard under the Quality Assessment and Performance 
Improvement Program at proposed Sec. 484.65(c) states that the HHA must 
set priorities for performance improvement, considering prevalence and 
severity of identified problems, and giving priority to improvement 
activities that affect clinical outcomes. However, any identified 
problems that directly or potentially threaten the health and safety of 
patients must be corrected immediately. Prioritizing areas of 
improvement is essential for the HHA to gain a strategic view of its 
operating environment and to ensure the consistent quality of care 
provided over time. Overall, an HHA would be expected to give priority 
to improvement activities that most affect clinical outcomes. 
Conditions that may threaten the health and safety of patients must be 
immediately and

[[Page 11015]]

directly addressed when they are identified.
    The fourth standard under the Quality Assessment and Performance 
Improvement COP, at proposed Sec. 484.65(d), would require the HHA to 
participate in periodic, external quality improvement reporting 
requirements as may be specified by HCFA. An example of participation 
in an external quality improvement activity would be the future 
requirement for the HHA to report quality indicator data (as discussed 
elsewhere in today's issue of the Federal Register). Participation in 
the survey process is another example. A different example might be 
that the Secretary, reviewing the quality indicator data (or other 
information), decides to embark on a national project to improve the 
management of multiple medications from multiple doctors of HHA 
patients. This proposal would require the HHA to participate in this 
external quality improvement project. Another example might be a 
national effort to increase the number of HHA patients who receive flu 
shots each year. This proposed requirement is entirely consistent with 
HCFA's strategic plan to improve the health status of Medicare and 
Medicaid beneficiaries, and many of these projects will reach 
beneficiaries well beyond individuals being served under specific 
benefit programs such as home health.
    Development of the revised COPs is part of the Administration's 
reinventing government initiative. The COPs were revised to emphasize a 
focus on outcomes of health care rather than process and procedural 
requirements. Our revitalized approach reflecting the use of quality 
indicators and outcome measures as part of future external quality 
improvement reporting requirements as specified by the Secretary stem 
from the statutory authority governing the HHA COPs. Section 1891(b) of 
the Act states, ``It is the duty and responsibility of the Secretary to 
assure that the conditions of participation * * * and the enforcement 
of such conditions * * * are adequate to protect the health and safety 
of individuals under the care of a home health agency and to promote 
the effective and efficient use of public moneys.'' Congress mandated 
broad authority to allow the Secretary to keep up with the myriad of 
changes in quality health care delivery that reflect the state of the 
art. The use of outcome measures is a significant feature of 
accreditation for organizations such as the Joint Commission on 
Accreditation of Healthcare Organizations' (JCAHO) Agenda for Change 
and Community Health Accreditation Program's (CHAP) Benchmarks for 
Excellence in Home Care.
    The use of quality indicators and outcome measures as part of 
external quality improvement reporting requirements stems, in part, 
from the statutory requirement that surveys of HHAs employ quality 
indicator data. Specifically, section 1891(c)(2)(C)(i)(II) of the Act 
states, ``A standard survey conducted under this paragraph with respect 
to an HHA shall include (to the extent practicable), for a case-mix 
stratified sample of individuals furnished items or services by the 
agency * * * a survey of the quality of care and services furnished by 
the agency as measured by indicators of medical, nursing, and 
rehabilitative care.''
    Looking beyond the actual service delivered toward the outcome 
resulting from that service allows the HHA the opportunity to 
incorporate that information to change patterns of behavior or policies 
and continually improve future performance. Although reaching the 
desired outcome is beneficial, the revised approach focuses on 
continuous change in an HHA's behavior over time. The regulatory 
approach to outcome measures is not predicated on punishing those who 
do not reach desired outcomes, but on examining how the HHA used its 
own experience to change behavior and ultimately improve performance 
over time.
    Finally, this condition includes a standard about infection control 
at proposed Sec. 484.75(e). We expect the HHA to maintain an effective 
infection control program as part of its overall quality assessment and 
performance improvement program. We recognize that an HHA cannot be 
directly responsible for the maintenance of an infection free home 
environment, especially since the HHA cannot be physically present in 
the home at all times. However, it can be responsible for (1) ensuring 
that all staff know and use current best practices themselves to ensure 
they are not the source of the spread of infection in the course of 
providing home health services, and (2) on educating families and other 
caregivers on best practices for the control of the spread of 
infections within the home during the course of the family/caregivers'' 
interactions with the patients. One example of the use of ``current 
best practices'' is the universal precaution of the use of gloves when 
handling blood or blood products. HCFA is not proposing any specific 
approaches to meeting this requirement, but would expect to see clear 
evidence that the HHA aggressively seeks to minimize the spread of 
infection through the use of infection control techniques by its staff 
and through the efforts made to help families and caregivers to 
minimize the spread of infection.
5. Skilled Professional Services (Proposed Section 484.70)
    Existing regulations at Secs. 484.16, 484.30, 484.32, and 484.36 
specify standards that identify detailed tasks that must be performed 
by agency staff in the provision of skilled nursing services, therapy 
services, and medical social services respectively.
    We propose to delete Secs. 484.16, 484.30, 484.32, and 484.36 and 
replace them with a more simplified new condition on skilled 
professional services. Instead of specifically identifying tasks, we 
are broadly describing the expectations of the skilled professionals 
who participate in the interdisciplinary team approach to home health 
care delivery.
    We would specify that skilled professionals who provide services to 
HHA patients directly or under arrangement must participate in all 
aspects of care, including an ongoing interdisciplinary evaluation and 
development of the plan of care, and be actively involved in the HHA's 
quality assessment and performance improvement plan. We are reducing 
the concentration on process requirements and shifting the focus to 
outcomes. The expected outcome is the coordinated, comprehensive, 
interdisciplinary delivery of appropriate and effective skilled 
professional services delivered and supervised by health care 
professionals who practice under State licensure requirements and the 
HHA's policies and procedures. Skilled professional services for 
purposes of this section include: skilled nursing care, physical 
therapy, speech language pathology, occupational therapy (as defined in 
Sec. 409.44) and medical social services and home health aide services 
(as defined in Sec. 409.45).
    At proposed Sec. 484.70(a), we provide that skilled professional 
services are authorized, delivered, and supervised (that is, given 
authoritative procedural guidance) only by health care professionals 
who meet the appropriate qualifications specified under Sec. 484.115 
and who practice under the HHA's policies and procedures. We believe 
that this approach to supervision provides clarity to the current 
definition.
    We are proposing to require that an HHA ensure that a majority of 
at least 50 percent of the total skilled professional services are 
routinely provided directly by the HHA. We are

[[Page 11016]]

proposing to phase in this new approach over 3 years. In the first 
year, HHAs would be required to ensure that at least 30 percent of the 
skilled professional services are provided directly. In the second 
year, HHAs would be required to ensure that at least 40 percent of 
skilled professional services are provided directly. By the third year 
of enactment, HHAs would be required to ensure that at least 50 percent 
of the skilled professional services are provided directly.
    We are requesting comments on the use of a standard that would 
limit the use of contract care by Medicare certified HHAs. We believe 
such limits may be needed as a means of preventing the establishment of 
``shell'' HHAs that are merely a fax machine and a nurse used as a 
billing system. Further, we believe that this type of standard would 
protect against provider fraud and abuse. Mass delegation of care has 
led to problems in evaluating the accountability of providers. This is 
a program integrity approach that seeks to ensure continuity of care 
via the significant use of contractual care in the decentralized 
environment of home health delivery.
    Medicare makes a distinction between providing services directly, 
as opposed to providing services under arrangement. The most common way 
services are provided directly is through the use of employees. The 
common law definition of ``employee'' fundamentally relates to whether 
a person is under control by the entity or individual providing the 
services, so by and large producing a W-2 form would constitute 
providing the services directly. The ``Stark Provisions'' at section 
1877(h)(2) of the Act references the IRS ``employee'' definition. 
Section 1877(h)(2) provides that--
    An individual is considered to be ``employed by'' or an ``employee 
of'' an entity if the individual would be considered to be an employee 
of the entity under the usual common law rules applicable in 
determining the employer-employee relationship (as applied for purposes 
of section 3121(d)(2) of the Internal Revenue Code of 1986).
    We are exploring a more concise method of defining the provision of 
direct services as opposed to services provided under arrangement.
    We believe that the excessive use of contracting could be an 
indication that an HHA may be exceeding its patient capacity, leading 
to possible instability that can result in disruptions to patient care. 
Excessive contracting is also a potential indication that the HHA may 
not be exercising full control over quality of care. This performance 
safeguard seeks to ensure continuity and quality of care through the 
restriction of the significant use of contracted care in home care.
    A major home health care association has supported the 
establishment of limits on Medicare certified HHAs' use of contracted 
care as a way to establish performance expectations for the quality of 
care provided. The proposed direct services requirement is an attempt 
to address our concerns with the growth in ``shell'' operations and 
provider accountability. It is important to note that HHAs currently 
report employment data on their cost reports. We welcome comments on 
the percentage approach to the proposed direct services standard to 
control the excessive use of the contracting of services. We welcome 
comments on this shift in our approach and on any concerns HHAs may 
have regarding their ability, both operationally and financially, to 
undertake this new approach.
6. Home Health Aide Services (Proposed Section 484.75)
    Section 1891(a) of the Act requires the Secretary to establish 
minimum standards for home health aide training and competency 
evaluation programs. Section 1861(m)(4) of the Act requires Medicare 
covered home health aide services to be furnished by an individual who 
has successfully completed a training and/or competency evaluation 
program that meets the requirements established by the Secretary.
    Currently, the condition of participation concerning home health 
aide services is set forth at Sec. 484.36, (Condition of Participation: 
Home health aide services). For the most part, we would retain the 
existing requirements although in some cases we have made 
organizational or editorial changes in the interest of brevity or 
clarity. In addition, we are soliciting comments on some possible 
alternatives for future revisions. Under our reorganization scheme, 
this condition would be located at proposed Sec. 484.75.

Standard: Home Health Aide Qualifications

    Currently, provisions concerning the qualifications for home health 
aides are set forth at Sec. 484.4, Personnel Qualifications. As 
discussed in detail below, we are proposing substantial revisions to 
the personnel qualifications section. In light of our proposed 
revisions and our reorganization of part 484, we believe that the 
qualifications for home health aides would be more appropriately 
located in this section. Thus, at proposed Sec. 484.75(a) we would 
provide that a qualified home health aide is an individual who has 
successfully completed a State-established or other training program 
that meets the requirements of proposed Sec. 484.75(b) and a competency 
evaluation program or State licensure program that meets the 
requirements of proposed Sec. 484.75(c), or a competency evaluation 
program or State licensure program that meets the requirements of 
proposed Sec. 484.75(c), or has completed a nurse aide training and/or 
competency evaluation program approved by the State as meeting the 
requirements of existing Secs. 483.151 through 483.154 and is currently 
listed in good standing on the State nurse aide registry. We are 
soliciting comments on our proposed change to the home health aide 
personnel qualification, which would include the interchangeable 
paraprofessional training and/or competency standards for home health 
aides and nurse aide requirements at requirements at existing 
Secs. 483.151 through 483.154 (part of the Long-Term Care Facilities 
Requirements for Participation). The home health aide workforce is 
ridden with high turnover rates. We believe that the proposed changes 
to the home health aide personnel qualifications yield flexibility to 
HHAs in their ability to retain equally competent paraprofessionals 
from a wider pool of employment prospects.
    Under proposed Sec. 484.75(a)(2), we would retain (with 
clarification) the current personnel qualification requirements 
governing home health aide employment status during a continuous period 
of 24 consecutive months. An individual is not considered to have 
completed a training and competency evaluation program or a competency 
evaluation program if, since the individual's most recent completion of 
this program(s), there has been a continuous period of 24 consecutive 
months during none of which the individual furnished services described 
in Sec. 409.40 of this chapter for compensation. If an individual has 
not furnished services described in Sec. 409.40 for compensation during 
a continuous period of 24 consecutive months, then the individual must 
complete another training and competency evaluation program or 
competency evaluation program as described in paragraph (a)(1) of this 
section.

Standard: Home Health Aide Training

    We propose to retain the same requirements for content and duration 
of training as those under the current requirements at 
Sec. 484.36(a)(1). However, we propose more concise language.

[[Page 11017]]

Specifically, at proposed Sec. 484.75(b)(1), we would provide that the 
home health aide training must include classroom and supervised 
practical training that totals at least 75 hours. A minimum of 16 hours 
of classroom training must precede a minimum of 16 hours of supervised 
practical training.
    Proposed Sec. 484.75(b)(1)(i) would clarify provisions regarding 
communication skills currently located at Sec. 484.36(a)(1)(i) 
(Standard: Home health aide training-(1) Content and duration of 
training). We would provide that communication skills include the 
ability to read, write, and make brief and accurate oral and written 
presentations to patients, caregivers, and other HHA staff. We propose 
to retain current requirements under Sec. 484.36(a)(1) (ii) through 
(xii) at proposed Sec. 484.75(b)(1) (ii) through (xii) (Standard: 
Content and duration of training). We propose to retain current 
Sec. 484.36(a)(1)(xiii) with clarification at proposed 
Sec. 484.75(b)(1)(xiii). We propose to modify the current language, 
``Any other task that the HHA may choose to have the home health aide 
perform'' by adding the following: ``The HHA is responsible for 
training the home health aide, as needed, for skills not covered in the 
basic checklist.''
    At proposed Sec. 484.75(b)(2) and (3), we would essentially retain 
the provisions governing conduct of training by organizations and 
qualifications of instructors under existing Secs. 484.36(a)(2) (i) and 
(ii).
    At proposed Sec. 484.75(b)(4), we would essentially retain the 
documentation of training requirement under existing Sec. 484.36(a)(3) 
to include State approved nurse aide training and competency evaluation 
as reflected in the definition of the personnel qualifications for home 
health aides.
    We propose to separate existing Sec. 484.36(b)(Standard: Competency 
evaluation and inservice training) into two separate standards, 
Competency Evaluation and Inservice Training. These standards would be 
set forth at proposed Sec. 484.75(c) and (d) respectively.

Standard: Competency Evaluation

    In order to simplify this standard, at proposed Sec. 484.75(c) we 
would combine the current requirements for an HHA's responsibility for 
the applicability of the competency evaluation requirements under 
existing Sec. 484.36(b)(1) and the limitations on the applicability of 
the competency evaluation requirements for personal care attendants 
under a State Medicaid Personal Care benefit under existing 
Sec. 484.36(e)(2). An individual may furnish home health services on 
behalf of an HHA only after that individual has successfully completed 
a competency evaluation program as described in this section. We 
propose that the HHA must ensure that all individuals who furnish home 
health aide services to patients meet the competency evaluation 
requirements of this section. The only exception would be for personnel 
care aides who exclusively provide personal care services to Medicaid 
patients under a State Personal Care benefit.
    We propose to combine the requirements for competency evaluation 
under existing Sec. 484.36(b)(2) with the subject area requirements 
under existing Sec. 484.36(b)(3)(iii). We propose the competency 
evaluation must address each of the subjects listed in 
Sec. 484.36(a)(1) (ii) through (xiii). Subject areas Sec. 484.36(a)(1) 
(iii), (ix), (x), and (xi) must be evaluated by observing the aide's 
performance with a patient. The remaining subject areas may be 
evaluated through written examination, oral examination or after 
observation of the home health aide with a patient. These provisions 
would be set forth at proposed Sec. 484.75(c)(2).
    At proposed Sec. 484.75(c)(3) we would to retain the current 
requirements for the conduct of competency evaluations by organizations 
under Sec. 484.36(b)(3)(i). A competency evaluation program may be 
offered by any organization except as specified in existing 
Sec. 484.36(a)(2)(i).
    At proposed Sec. 484.75(c)(4) we would retain the current 
requirement at Sec. 484.36(b)(3)(ii) that the competency evaluation 
must be performed by a registered nurse. However, we recognize the 
interdisciplinary approach to home health care and propose the 
requirement that the registered nurse should perform the competency 
evaluation in consultation with other skilled professionals, as 
appropriate. At proposed Sec. 484.75(c)(5), we would retain the current 
requirements for competency determinations under Sec. 484.36(b)(4).
    At proposed Sec. 484.75(c)(6), we propose to retain the current 
requirements for documentation of competency evaluation currently 
located at Sec. 484.36(b)(5). We propose to delete the effective date 
requirements under existing Sec. 484.36(b)(6) because they refer to a 
timeframe in 1990 and are no longer necessary.

Standard: Inservice Training

    At proposed Sec. 484.75(d) we would retain the requirements for the 
amount of in-service training located at existing Secs. 484.36(b)(2) 
(ii) and (iii). We propose to clarify the 12-month period to address 
calendar year and anniversary date issues. We would combine the current 
requirements to propose that the home health aide must receive at least 
12 hours of inservice training in a 12-month period. During the first 
12 months of employment, hours may be prorated based on the date of 
hire. The in-service training may occur while the aide is furnishing 
care to a patient.
    At proposed Sec. 484.75(d)(2) we would revise the current 
requirements for the conduct of inservice training by organizations 
under Sec. 484.36(b)(3)(i). We would provide that an inservice training 
program may be offered by any organization except as specified in 
Sec. 484.75(b)(2).
    We propose to revise the current requirement for instructors of 
inservice training under Sec. 484.36(b)(3)(ii). The current requirement 
states that inservice training generally must be supervised by a 
registered nurse with specific experience requirements. Thus, at 
proposed Sec. 484.75(d)(3), we would provide that the inservice 
training must be supervised by a registered nurse. The revised language 
does not include the current experience requirements because we believe 
it is appropriate to give the HHA flexibility to utilize qualified 
professionals to instruct and evaluate aides in an appropriate manner 
in order to meet the outcome which is ensuring that the individuals who 
furnish home health aide services on its behalf meet the competency 
evaluation requirements of this section.

Standard: Home Health Aide Assignments

    At proposed Sec. 484.75(e), we would retain the revisions to 
existing Sec. 484.36(c), Standard: Assignments and duties of the home 
health aide, published in December 1994 (59 FR 65482), with one 
additional requirement. Specifically, at proposed Sec. 484.75(e)(3), we 
propose to restore the requirement that home health aides must report 
changes in the patient's medical, nursing, rehabilitative, and social 
needs to the registered nurse or other appropriate skilled professional 
and complete appropriate records in compliance with the HHA policies 
and procedures. This requirement was inadvertently removed in the 
December 1994 final rule. Home health aides may observe changes in 
patient needs that are crucial to future treatment decisions and should 
be reported to the appropriate professional in order to implement 
effective and appropriate changes in care.

Standard: Supervision

    At proposed Sec. 484.75(f), we would retain the home health aide 
supervision

[[Page 11018]]

requirements under existing Secs. 484.36(d) (1), (2), (3), and (4).
    We have concerns about whether quality supervision can be done 
without the requirement of an aide's presence performing a direct 
patient service. We have discussed several alternatives, including a 
requirement that the registered nurse or appropriate skilled 
professional must make an onsite visit to the patient's home while the 
home health aide is providing patient care no less frequently than 
every 30 days. We welcome comments on changing the current indirect 
supervision requirement and will address the issue in the final rule.
    We are also soliciting comments on the idea of focusing aide 
supervision on individual aides rather than each patient. The purpose 
of the supervisory visit is to determine if services are being 
provided, to assess relationships with the patient, competency with 
tasks, and evaluation of the employee's contribution to the 
organization's goals to provide high quality care.
    Generally, assessing patient needs, developing a plan of care, care 
coordination, and other skilled visits are performed at a frequency 
that generally exceeds a biweekly aide supervision schedule. These 
visits traditionally encompass supervision functions by the nature of 
being home and ascertaining whether the patient's needs are being met. 
Therefore, the current supervisory requirements may not add the quality 
measure of care and may duplicate functions that are inherently 
provided by the interdisciplinary team. Aides who have performed well 
and have satisfactory ratings may not need to be supervised as often as 
new or unsatisfactory rated aides. Centering the supervisory visits on 
an individual aide rather than on a patient would allow aides to be 
included in the HHA's human resource management policies that apply to 
all staff within the organization, and encourage the employer-employee 
relationship to reflect quality of patient care.
    We welcome comments on the following draft standard and will 
address the issues in the final rule:

Standard: Paraprofessional Supervision

    (1) If the patient receives skilled care and paraprofessional 
services, or paraprofessional services without skilled care, the HHA 
must not only ensure that the aide is competent to perform the 
necessary skills (see competency evaluation), but also evaluate the 
aide's ability to perform such functions on a continual basis. 
Supervision must be provided by the appropriate professional to ensure 
the health and safety of the patient, especially when specialized tasks 
and delegated functions have been added to the competency subjects.
    (2) The frequency of routine supervision is established by the 
HHA's policies which promote high quality patient care through the 
employment evaluation processes. These evaluation tools should begin at 
the time of employment and are evaluated thereafter on a regular 
employment basis, allowing for variations to accommodate time in 
service with the hiring HHA and the employees' recorded evaluation 
ratings with that HHA. Employment status should be calculated by the 
most appropriate method for the organization to ensure regular 
evaluations. HHAs who arrange for aide services through a non-Medicare 
certified HHA must ensure equivalent supervision requirements in the 
arrangement contract with the primary HHA responsible for compliance 
with these requirements.
    (3) The evaluation process includes, but is not limited to, 
measuring the aide's continual ability to perform routine tasks, 
specialized tasks, reporting problems to the HHA with care plan tasks, 
recognizing and reporting barriers to the anticipated outcomes, and 
patient satisfaction issues.
    (4) Nonroutine supervision is also essential to monitor the need 
for paraprofessional care plan revisions. For example, HHAs could 
perform spot home visits (direct or indirect observation), telephone 
interviews, and other mechanisms to ensure protection of the health and 
safety of the patient and respect for patient's privacy and property. 
Nonroutine supervisory techniques provide a forum for open and frequent 
communication to obtain essential and timely feedback. Feedback can 
also be obtained from other care providers (formal and informal), 
significant family, and others deemed necessary to properly evaluate 
the paraprofessional.
    (5) In accordance with HHA policies, the aide should also provide 
feedback on his or her employment environment and the evaluation 
processes.
    Additionally, we welcome comments on the efficacy of using 
competent individuals other than a registered nurse to perform 
training, competency evaluation, and assignment or supervision 
functions for home health aides.

Standard: Medicaid Personal Care Aide Services--Medicaid Personal Care 
Benefit

    At proposed Sec. 484.75(g) we would retain the current requirements 
under Sec. 484.36(e) (1) and (2). A Medicare certified HHA that 
provides personal care aide services to Medicaid patients under a State 
Medicaid Personal Care Benefit must determine and ensure the competency 
of individuals who perform those Medicaid approved services.

Alternatives for Future Revisions

    Home care patients are a vulnerable and confined population. It is 
necessary to ensure the provision of safe quality care to patients in 
their homes. We are proposing one specific measure in this proposed 
rule--a criminal background check of home health aides as a condition 
of employment (Sec. 484.75(h)). In addition, we are considering the 
utility of several other process measures that could be included in 
this regulation that are predictive of the desired outcome of 
delivering safe quality care in the patient's home. One possibility 
would be to adopt the language that is currently used in the Conditions 
of Participation for Intermediate Care Facilities for the Mentally 
Retarded (ICF/MR) at Sec. 483.420, modified to reflect the HHA 
environment and population served. The ICF/MR provisions governing 
client protections at Secs. 483.420(d)(1)(iii), (2), (3), and (4) 
state:
     The facility must prohibit the employment of individuals 
with a conviction or prior employment history of child or client abuse, 
neglect or mistreatment.
     The facility must ensure that all allegations of 
mistreatment, neglect or abuse, as well as injuries of unknown source, 
are reported immediately to the administrator or to other officials in 
accordance with State law through established procedures.
     The facility must have evidence that all alleged 
violations are thoroughly investigated and must prevent further 
potential abuse while the investigation is in progress.
     The results of all investigations must be reported to the 
administrator or designated representative or to other officials in 
accordance with State law within 5 working days of the incident and, if 
the alleged violation is verified, appropriate corrective action must 
be taken.
    Proposing criminal background checks as a condition of employment 
for home health aides is one vehicle to guard beneficiaries from 
abusive practices in the sanctity of their homes.

[[Page 11019]]

We are soliciting comments on the costs and benefits of requiring 
criminal background checks for home health aides and the possible 
adoption of the additional patient safeguards modified to reflect the 
HHA environment.

D. Proposed Subpart C--Organizational Environment

1. Compliance with Federal, State, and Local Laws (Proposed Section 
484.100)
    Currently, provisions concerning compliance with Federal, State, 
and local laws are located at Sec. 484.12, Condition of Participation: 
Compliance with Federal, State, and local laws, disclosure of ownership 
information and accepted professional standards and principles. We 
would retain most of the provisions contained in this condition with 
minor changes, which are discussed in detail below. Under our proposed 
reorganization scheme, discussed above, this condition would be set 
forth at Sec. 484.100.
    Under the first standard, compliance with Federal, State, and local 
laws and regulations, at proposed Sec. 484.100(a), we would revise the 
language at existing Sec. 484.12(a). That is, we would require that the 
HHA and its staff must operate and furnish services in compliance with 
all Federal, State, and local laws and regulations applicable to home 
health agencies. If a State has established licensing requirements for 
HHAs, all HHAs must be approved by the State licensing authority as 
meeting those requirements whether or not they are required to be 
licensed by the State. The Secretary may find an HHA to be out of 
compliance with these conditions of participation if the HHA is found 
out of compliance with any Federal, State, or local law or regulation 
by the appropriate enforcement agency for that law or regulation and 
the Secretary determines that the law or regulation affects the HHA's 
ability to deliver home health services safely and effectively. When a 
facility is actually found out of compliance and is cited by that 
agency for a violation, HCFA will exercise discretion in determining 
whether that violation should be cited as a violation under these 
conditions. Clearly it is not in the interest of patients or providers 
to decertify facilities or to require corrective action plans for 
certain reasons (for example, a facility's failure to pay its local 
property taxes on time or building a fence 3 feet over the property 
line). We would not cite an agency whose problem was remedied (for 
example, the facility paid its taxes). However, HCFA intends to cite 
agencies when their violations of Federal, State, or local laws or 
regulations affect the health and safety of patients, the ability of 
HHAs to deliver quality services, the rights and well-being of 
patients, and/or the management of the agency and its ability to 
recruit qualified staff. We welcome comments on this interpretation.
    Similarly, in the second standard, Disclosure of ownership and 
management information, we propose to retain the requirements at 
existing Sec. 484.12(b). We would continue to require that the HHA 
comply with the requirements of Secs. 420.200 through 420.206 regarding 
disclosure of ownership and control information. Additionally, the 
second standard would continue to require that the HHA also disclose 
the following information to the State survey agency at the time of the 
HHA's initial request for certification, for each survey, and at the 
time of any change in ownership or management:
     The name and address of all persons with an ownership or 
control interest in the HHA as defined in Secs. 420.201, 420.202, and 
420.206.
     The name and address of each person who is an officer, a 
director, an agent, or a managing employee of the HHA as defined in 
Secs. 420.201, 420.202, and 420.206.
     The name and address of the corporation, association, or 
other company that is responsible for the management of the HHA, and 
the name and address of the chief executive officer and the chairperson 
of the board of directors of that corporation, association, or other 
company responsible for the management of the HHA.
    Existing Sec. 484.12(c) provides that an HHA must comply with 
accepted professional standards and principles. To reflect an emphasis 
on the importance of continuity of care and our focus on quality, 
regardless of the site of service, we propose to move the current 
provisions at Sec. 484.12(c) and incorporate the performance 
expectation of the provisions into the quality assessment and 
performance improvement program. HCFA has long used the term ``in 
accordance with accepted standards of practice'' in its various 
provider and supplier requirements both to set a performance 
expectation and to serve as an enforcement tool should grossly 
divergent practices be identified in the survey process.
    We believe that requiring an HHA to participate in a strong, 
quality assessment and performance improvement program would stimulate 
an aggressive effort to identify and use the best practices available 
for all care providers in the HHA. As discussed above, for the HHA to 
be successful in its quality assessment and performance improvement 
program, it will be obliged to seek out best practices continuously. 
HCFA's survey effort can then be devoted to assessing how the HHA has 
sought out and adopted best practices in the field as part of the 
surveyor's evaluation of the quality assessment and performance 
improvement requirements, rather than HCFA prescriptively defining 
``accepted professional standards''.
    At proposed Sec. 484.100(c), we would provide that the HHA and its 
branches must be licensed in accordance with State licensure laws, if 
applicable, prior to providing Medicare reimbursed services. This 
provision seeks to ensure that HHA patients receive the same level of 
quality care from the appropriate personnel at all sites of service. 
The requirement that HHAs comply with State licensure laws before 
providing services to Medicare beneficiaries would apply to the HHA as 
an entity as well as its staff furnishing services to HHA patients 
directly or under arrangements.
    Finally, we propose to move the current requirements at 
Sec. 484.14(j), Organization, services and administration, Standard: 
Laboratory services, to proposed Sec. 484.100(d). We believe that the 
laboratory services standard is a Federal requirement that is better 
suited under the revised condition of participation governing 
compliance with Federal, State, and local laws.
2. Organization and Administration of Services (Proposed Section 
484.105)
    The proposed COP on organization and administration of services 
would revise existing regulations at Sec. 484.14 (Condition of 
participation: organization, services and administration) and replace 
the existing regulations at Sec. 484.38 (Condition of participation: 
Qualifying to furnish outpatient physical therapy or speech-language 
pathology services). The proposed new condition simplifies the 
structure of the current requirements and provides flexibility to the 
HHA by replacing the current focus on organizational structures with 
new performance expectations for the administration of an HHA as an 
organizational entity. With the wide diffusion of home health 
organization and management structures, it is imperative to ensure 
accountability within HHAs by setting performance expectations for the 
clear, unambiguous, and accountable operation of all

[[Page 11020]]

services. The overall goal of the proposed condition is clear, 
accountable organization, management, and administration of an HHA's 
resources to attain and maintain the highest practicable functional 
capacity for each patient in terms of medical, nursing, and 
rehabilitative needs as indicated on the plan of care.
    One of the most critical responsibilities for the governing body of 
the HHA to meet is stated explicitly at the beginning of proposed 
Sec. 484.105: The HHA is expected to ``attain and maintain the highest 
practicable functional capacity for each patient * * *'' This language 
derives from section 1891(c)(2)(C)(i)(I) of the Act, which directs the 
Secretary to devise a survey process that includes home visits to a 
case-mix sample of patients ``for the purpose of evaluating * * * the 
extent to which the quality and scope of items and services furnished 
by the agency attained and maintained the highest practicable 
functional capacity of [E]ach such individual * * * '' Thus, the 
expectation for performance of the HHA, as stated throughout these 
proposed rules, especially in the comprehensive assessment, care 
planning and coordination, and quality assessment and performance 
improvement COPs, is to achieve outcomes of care that are commensurate 
with a patient's condition and expectations for returning to improved 
functional status as much as possible. The placement of this 
requirement in the COP that includes the governing body is intended to 
express clearly our intention that the responsibility for achieving the 
best outcomes possible for the patients served lies with the 
administration of the HHA, including its governing body and 
administrator.
    This requirement lends support to the importance of the HHA using 
current best practices within a strong quality assessment and 
performance improvement program. It promotes the HHA's seeking out and 
using comparative data where available and using its own data compared 
to previous points in time to demonstrate internal improvements in 
outcomes over time.
    We recognize that there is no single test of this requirement; each 
patient is unique and the expectations for outcomes vary in every case. 
Yet, we will expect surveyors to determine that the HHA, overall, has 
aggressively pursued this statutory expectation for outcomes for 
patients and either achieves it, or demonstrates its efforts to achieve 
it when desired outcomes are not successfully achieved.
    In the proposed organization and administration of services 
condition, we revise the current standard on governing body 
(Sec. 484.14(b)), retain, with only minor changes, the current standard 
on services furnished (Sec. 484.14(a)), retain, with only minor 
editorial changes, the requirements with respect to services under 
arrangements that are now stated in Sec. 484.14(h), delete the current 
standards on administrator (484.14(c)), delete the current standards on 
supervising physician or registered nurse (Sec. 484.14(d)), delete the 
current standards on personnel policies (Sec. 484.14(e)), delete the 
current standards on institutional planing (Sec. 484.14(i)), relocate 
the existing condition, qualifying to furnish outpatient physical 
therapy or speech-language (Sec. 484.38) under this condition, and 
relocate the current standard on laboratory services (Sec. 484.14(j)) 
under the compliance with Federal, State and local laws COP.
    In developing the proposed governing body standard, we emphasize 
the responsibility of the HHA governing body (or designated persons so 
functioning) for the management and provision of all home health 
services, fiscal operations, quality assessment, performance 
improvement, and the appointment of the administrator. We have retained 
the necessary administrative features that promote and protect patient 
health and safety from the current standard on governing body at 
Sec. 484.14(b) while providing flexibility in the actual approach to 
the performance expectation of the provision of quality care to all 
patients. Thus, in the proposed governing body standard, the actual 
approach to the administration of the HHA as an organization is left to 
the discretion of the governing body of each HHA. The proposed 
governing body standard reflects our goal of promoting the effective 
management and administration of the HHA as an organizational entity 
without dictating prescriptive requirements for how an HHA must meet 
that goal.
    In the proposed governing body standard, the HHA's governing body 
(or designated persons so functioning) must assume the full legal 
authority and responsibility to ensure the performance expectation of 
the sound fiscal operation of the HHA, appoint a qualified 
administrator who is responsible for the day-to-day operation of the 
program, and may appoint designated persons to carry out those 
functions. We believe the proposed standard on governing body 
encompasses the performance expectation of an HHA administrator and of 
organizational fiscal operations, and, therefore, propose to delete the 
current prescriptive standards on the administrator at Sec. 484.14(c) 
and on institutional planning at Sec. 484.14(i). We propose to replace 
the current process-ridden institutional planning standard at 
Sec. 484.14(i) with the performance expectation of the HHA governing 
body's responsibility for the fiscal operation of the HHA.
    We propose to remove the current statutorily based institutional 
planning requirements from the HHA conditions of participation. Because 
the HHA conditions of participation are primarily intended to reflect 
patient health and safety standards, we feel the COPs are an 
inappropriate location for the institutional planning provisions found 
under section 1861(z) of the Act. The proposed standard requires the 
governing body to assume full legal authority and responsibility for 
fiscal operations and appointment of an administrator who is 
responsible for the day-to-day operation of the program without 
specifying the means to achieve the goal. This outcome-oriented 
approach provides flexibility to the HHA in the administration of the 
HHA as an organizational entity. However, it is important to note that 
the statutory requirements of section 1861(z) of the Act continue to 
apply to an HHA's institutional planning and capital expenditure 
activities, even though we would not include them in the revised COPs.
    The second proposed standard under the organization and 
administration of services condition would specify that the HHA that 
accepts the patient is the primary HHA and has the responsibility to 
meet the care needs of the patient. Primary home health agency means 
the agency that accepts the patient becomes the primary HHA and assumes 
responsibility for the interdisciplinary coordination and provision of 
services and continuity of care, whether the services are provided 
directly or under arrangement. We are proposing the new primary HHA 
standard to ensure continuity of quality care. Mass delegation of care 
has led to problems in evaluating the accountability of providers and 
quality of care. This standard was proposed to address the problem of 
HHAs accepting patients for only specific services. For example, one 
HHA accepts a patient, treats the patient for a specific condition, and 
then refers the patient to several other agencies for the rest of his 
or her treatment. Under our proposal, the HHA that accepts a patient 
would become the primary HHA and would be held responsible for the 
interdisciplinary coordination and provision of services ordered under 
the patient's plan of care. We welcome

[[Page 11021]]

comments as to whether the primary HHA standard is an appropriate tool 
to address the problem of mass delegation and fragmentation of care.
    We are also proposing a new standard to address the parent/branch 
relationship. We want to establish clear requirements regarding the 
parent/branch relationship in order to protect patient health and 
safety and to ensure a consistent level of care throughout the HHA as 
an organizational entity. Although the existing regulations define 
``branch office'' and ``parent HHA'', we have found that some HHAs have 
several branch offices that are actually operating as full-fledged HHAs 
while the parent offices are used as billing shells for the branches. 
We have concerns about branches, which are not required to 
independently meet the conditions of participation, acting as an 
independent HHA and the effect on program integrity and the consistency 
of quality care provided. We do not anticipate that this standard will 
disrupt current business practice because the current definitions of 
parent and branch provide a performance expectation for HHAs as 
organizational entities as a condition of participation for Medicare 
certification.
    In the proposed rule, we have retained the current definitions, and 
we are also incorporating the previous definition material into the 
organization and administration of services COP in order to clarify 
that this is a management responsibility of the organization. The 
standard states that a parent home health agency provides direct 
support and administrative control of branches. The branch office is 
located sufficiently close to effectively share administration, 
supervision, and services in a manner that renders it unnecessary for 
the branch to separately meet the COPs as an HHA. We have added 
``teeth'' to the current definition of the parent and branch by making 
it a standard level requirement. This will enable surveyors to cite a 
deficiency when the performance by an HHA's branch does not ensure that 
the branch is meeting the HHA requirements applicable to its operation. 
Since the parent/branch reference in the current rule is only a 
definition, surveyors cannot presently cite a deficiency.
    We are proposing at Sec. 484.105(e) to revise the current services 
furnished requirement at existing Sec. 484.14(a). Specifically, we 
would retain the current requirement that part-time or intermittent 
skilled nursing services and at least one other therapeutic service 
(physical therapy, speech-language pathology, or occupational therapy; 
medical social services; or home health aide services) are made 
available on a visiting basis in a place of residence used as a 
patient's home. We would revise the second part of the standard to 
state that an HHA must provide at least one of the qualifying services 
directly, but may provide the second qualifying service and additional 
services under arrangements with another agency or organization. 
Medicare makes a distinction between services provided directly as 
opposed to under arrangement. As discussed above, the most common way 
services are provided directly is through the use of employees. The 
common law definition of ``employee'' fundamentally relates to whether 
a person is under control by the entity or individual providing the 
services, so by and large producing a W-2 form would constitute 
providing the services directly. We are exploring a straightforward way 
to define the provision of direct services as opposed to services 
provided under arrangement.
3. Clinical Records (Proposed section 484.110)
    We are proposing a new COP, clinical records, that embodies several 
of the requirements in existing Sec. 484.48, Condition of 
participation: Clinical records. In this condition we would retain only 
those process requirements that are essential to protect of patient 
health and safety.
    The primary requirement under the proposed clinical records 
condition of participation is that a clinical record containing 
pertinent past and current findings is maintained for every patient who 
is accepted by the HHA for home health services. We propose to add the 
requirement that the information contained in the clinical record must 
be accurate, made available to the physician and appropriate HHA staff 
and may be maintained electronically. The accuracy of the clinical 
record must exhibit consistency between the diagnosed condition and the 
actual experience of the patient. Accuracy can be reflected in the 
appropriate link between patient assessment information and the 
services and treatments ordered and furnished in the plan of care. In 
light of the decentralized nature of HHAs, that is, patient care is not 
furnished in a single location, we believe that members of the 
interdisciplinary team must have access to patient information in order 
to provide quality services. Many HHAs maintain electronic records and 
we recognize this technological change in the home health environment.
    The first standard of the condition, contents of the record, would 
include several elements that we currently require HHAs to include in 
the clinical record. We would retain the requirement that the record 
include clinical/progress notes, a discharge summary, and the plan of 
care. To give HHAs flexibility in maintaining clinical records, we 
would no longer specify that the record must include appropriate 
identifying information, name of physician, drug, dietary, treatment 
and activity orders, and copies of summary reports sent to the 
attending physician. Finally, we would add requirements to this 
standard that reflect our outcome oriented approach to patient care. 
Specifically at proposed Sec. 484.110(a), we would require that the 
clinical record include: (1) The patient's current comprehensive 
assessment, clinical/progress notes, and plan of care; (2) responses to 
medications, treatments, and services; (3) a description of measurable 
outcomes that have been achieved; and (4) a discharge summary that is 
available to physicians upon request. We believe that these 
requirements would give HHAs flexibility in maintaining clinical 
records as well as ensure that the records contain information 
necessary to provide high quality patient care.
    We propose to add a new standard at proposed Sec. 484.110(b) to 
provide for authentication of clinical records. We would require that 
all entries be clear, complete, and appropriately authenticated. 
Authentication must include signatures or a computer secure entry by a 
unique identifier of a primary author who has reviewed and approved the 
entry. The move to computerized records has resulted in transcription 
of doctor's orders and electronic signatures. This standard is 
currently in the COPs for hospitals, and addresses technological 
changes in information management.
    Under proposed Sec. 484.110(c) we would retain the current 
requirement under Sec. 484.48(a) (Standard: Retention of records). That 
is, we would continue to require that clinical records be retained for 
5 years after the month the cost report to which the records apply is 
filed with the intermediary, unless State law stipulates a longer 
period of time. HHA policies provide for retention of records even if 
the HHA discontinues operations. If the patient is transferred to 
another health facility, a copy of the record or an abstract is sent 
with the patient.
    We also propose to incorporate into this condition the first 
requirement under existing Sec. 484.48(b) (Standard: Protection of 
records). At proposed Sec. 484.110(d) we would provide that patient 
information and the record are safeguarded against loss or

[[Page 11022]]

unauthorized use. We believe the other requirements under existing 
Sec. 484.48(b) concerning the release of clinical record information 
are best incorporated into the new standard at proposed Sec. 484.50 
(Patient Rights: Confidentiality of clinical records).
4. Personnel Qualifications (Proposed section 484.115)
    Currently, provisions concerning the qualifications of HHA 
personnel are located at Sec. 484.4. This section now includes very 
specific credentialing requirements and provides that any staff 
required to meet the conditions of participation must meet our 
qualifications. In keeping with our goal of eliminating process 
requirements that are not predictive of good outcomes for patients or 
necessary to prevent harmful outcomes for patients, we are proposing 
significant revisions to the personnel qualifications COP. 
Specifically, we would provide that in cases where personnel 
requirements are not statutory, or do not relate to a specific payment 
provision we would apply State certification or State licensure 
requirements. Under our proposal, the personnel qualifications would 
fall into three basic categories, personnel for which there is a 
statutory set of qualifications, personnel for which we have specified 
requirements since all States do not have licensure or certification 
requirements, and personnel for which all States have licensure or 
certification requirements. Under our proposed reorganization of part 
484, the personnel qualifications would be located at proposed 
Sec. 484.115. We discuss the personnel qualifications in detail below.
    The first category of personnel qualifications are those in which 
we would defer to State law. At proposed Sec. 484.115(a), we would 
specify that skilled professionals who provide services directly by or 
under arrangements with the HHA must be legally authorized (licensed or 
if applicable, certified or registered) to practice by the State in 
which he or she performs, and must act only within the scope of his or 
her State license or State certification.
    The second category would consist of personnel for which there is a 
statutory set of qualifications. Section 1861(r) of the Act essentially 
defines a physician as a doctor of medicine, osteopathy, or podiatry 
legally authorized to practice medicine and/or surgery by the State in 
which such function or action is performed. We would refer to this 
definition at proposed Sec. 484.115(b). The Act also contains a 
definition of a speech language pathologist. Specifically, section 
1861(ll)(3)(A) defines a qualified speech language pathologist as an 
individual with a master's or doctoral degree in speech-language 
pathology who is licensed as a speech-language pathologist by the State 
in which the individual furnishes such services, or in the case of an 
individual who furnishes services in a State which does not license 
speech-language pathologists, has successfully completed 350 clock 
hours of supervised clinical practicum (or is in the process of 
accumulating such supervised clinical experience), performed not less 
than 9 months of supervised full-time speech-language pathology 
services after obtaining a master's or doctoral degree in speech-
language pathology or a related field, and successfully completed a 
national examination in speech-language pathology approved by the 
Secretary. The Act also defines the qualifications for home health 
aides at section 1891(a). We believe that the description of 
qualifications for home health aides would be more appropriately 
located under the home health aide services COP. Thus, the requirement 
will be cross-referenced at proposed Sec. 484.75(a).
    The third category of personnel qualifications would include those 
persons for whom all States do not currently have a licensing or 
certification requirement. If a State has licensing or certification 
requirements for a professional included in this section, then the 
State qualifications would apply. If a State does not have licensing or 
certification requirements, then the HHA would apply the qualifications 
specified below. This category would consist of all current personnel 
qualifications found under Sec. 484.4 with the exception of 
audiologists and practical (vocational) nurses. We propose to delete 
the current requirements for audiologists and practical (vocational) 
nurses. The existing requirement for practical (vocational) nurses is 
State licensure in the State practicing; thus it is self-explanatory in 
our deference to State law. We believe the audiologist requirement is 
no longer relevant to the home care environment.
    We contemplated changing the current requirements for social 
workers consistent with our approach to deferring to State licensing 
laws, when applicable, but have not done so in this rule because of the 
absence of data and outcome measures. We are requesting comments on 
alternative approaches to personnel qualifications for social workers 
and the submission of data that would support the retention or change 
to the current personnel qualifications for social workers in this 
rule.
    We propose to revise the existing personnel qualifications for HHA 
administrators. An administrator is a person who is licensed as a 
physician; or holds an undergraduate degree and is a registered nurse; 
or has education and experience in health service administration, with 
at least one year of supervisory or administrative experience in home 
health care or a related health care program and in financial 
management.
    We propose to revise the definition of administrator to provide 
that an administrator who is a registered nurse must possess a 
bachelor's degree. Additionally, we would specify the type of education 
or experience that an administrator who is not a physician or a 
registered nurse must have. Specifically, as stated above, such a 
person would need education or experience in home health care or a 
related health care program and in monitoring the financial aspects of 
program management. In light of the fact that many HHAs experience 
financial difficulties as a result of poor or inefficient management, 
we believe that our proposed requirement that the administrator have 
education or experience in financial management would be beneficial. 
Additionally, we believe that this proposed requirement is necessary 
since inefficient financial management of an HHA can ultimately lead to 
low quality patient care. We note that States do not have licensing 
requirements for HHA administrators; thus, as in the past, HHAs would 
continue to apply our requirements.
    In addition, in the event that a State does not have any licensure 
or certification for the following professions, the HHA would apply the 
qualifications specified below:
    Occupational Therapist--A person who: (a) Is a graduate of an 
occupational therapy curriculum accredited jointly by the Committee on 
Allied Health Education and Accreditation of the American Medical 
Association and the American Occupational Therapy Association; or (b) 
is eligible for the National Registration Examination of the American 
Occupational Therapy Association; or (c) has 2 years of appropriate 
experience as an occupational therapist, and has achieved a 
satisfactory grade on a proficiency examination conducted, approved, or 
sponsored by the U.S. Public Health Service, except that such 
determinations of proficiency do not apply with respect to persons 
initially licensed by a State or seeking initial

[[Page 11023]]

qualification as an occupational therapist after December 31, 1977.
    Occupational therapy assistant--A person who: (a) Meets the 
requirements for certification as an occupational therapy assistant 
established by the American Occupational Therapy Association; or (b) 
has 2 years appropriate experience as an occupational therapy 
assistant, and has achieved a satisfactory grade on a proficiency 
examination conducted, approved, or sponsored by the U.S. Public Health 
Service, except that such determinations of proficiency do not apply 
with respect to persons initially licensed by a State or seeking 
initial qualification as an occupational therapy assistant after 
December 31, 1977.
    Physical therapist--A person who: (a) Has graduated from a physical 
therapy curriculum approved by: (1) The American Physical Therapy 
Association; or (2) The Committee on Allied Health Education and 
Accreditation of the American Medical Association; or (3) The Council 
on Medical Education of the American Medical Association and the 
American Physical Therapy Association; or (b) Prior to January 1, 1966 
(1) Was admitted to membership by the American Physical Therapy 
Association, or (2) was admitted to registration by the American 
Registry of Physical Therapist, or (3) has graduated from a physical 
therapy curriculum in a 4-year college or university approved by a 
State department of education; or (c) has 2 years of appropriate 
experience as a physical therapist, and has achieved a satisfactory 
grade on a proficiency examination conducted, approved, or sponsored by 
the U.S. Public Health Service except that such determinations of 
proficiency do not apply with respect to persons initially licensed by 
a State or seeking qualifications as a physical therapist after 
December 31, 1977; or (d) was licensed or registered prior to January 
1, 1966, and prior to January 1, 1970, had 15 years of full-time 
experience in the treatment of illness or injury through the practice 
of physical therapy in which the services were rendered under the order 
and direction of attending and referring doctors of medicine or 
osteopathy; or (e) if trained outside of the United States (1) Was 
graduated since 1928 from a physical therapy curriculum approved in the 
country in which the curriculum was located and in which there is a 
member organization of the World Confederation for Physical Therapy; 
(2) meets the requirements for membership in a member organization of 
the World Confederation for Physical Therapy.
    Physical therapy assistant--A person who: (1) Has graduated from a 
2-year college-level program approved by the American Physical Therapy 
Association; or (2) has 2 years of appropriate experience as a physical 
therapy assistant, and has achieved a satisfactory grade on a 
proficiency examination conducted, approved or sponsored by the U.S. 
Public Health Service, except that these determinations of proficiency 
do not apply to persons initially licensed by a State or seeking 
initial qualification as a physical therapy assistant after December 
31, 1977.
    Public health nurse--A registered nurse who has completed a 
baccalaureate degree program approved by the National League for 
Nursing for public health nursing preparation or postregistered nurse 
study that includes content approved by the National League for Nursing 
for public health nursing preparation.
    Registered nurse--A licensed graduate of an approved school of 
professional nursing.
    Social worker assistant--A person who: (1) Has a baccalaureate 
degree in social work, psychology, sociology, or other field related to 
social work, and has had at least 1 year of social work experience in a 
health care setting; or (2) has 2 years of appropriate experience as a 
social work assistant, and has achieved a satisfactory grade on a 
proficiency examination conducted, approved, or sponsored by the U.S. 
Public Health Service, except that these determinations of proficiency 
do not apply with respect to persons initially licensed by a State or 
seeking initial qualifications as a social work assistant after 
December 31, 1977.
    Social worker--A person who has a master's degree from a school of 
social work accredited by the Council on Social Work Education, and has 
1 year of social work experience in a health care setting.
    Our approach to personnel credentialing would be as flexible as 
possible. Our objective is to rely upon State licensure to the extent 
that States license practitioners required under these conditions of 
participation. However, the diverse nature of State licensure 
provisions make it necessary for us to continue to write and apply 
requirements in some cases. For example, where a State does not license 
a type of practitioner required in these conditions of participation, a 
Federal definition is needed to enable HHAs and surveyors to define and 
meet the requirement. An example of this situation would be a State 
that does not license occupational therapists. There are also instances 
when the specific credential applicable to a practitioner is specified 
in the law. An example of this is a physician, which is defined in 
section 1861(r) of the Act. Finally, the credentialing philosophy that 
we have described here would not apply under Medicare Part B, when a 
specific level or education or training is specified as a pre-condition 
for reimbursement. Thus, the definitions contained in this section 
generally apply for HHA certification purposes only in States where 
there are no State licensure or certification requirements.

IV. Impact Statement

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612) unless we certify that a proposed rule such as this would 
not have a significant economic impact on a substantial number of small 
entities. For purposes of the RFA, all home health agencies are 
considered small entities. States and individuals are not considered 
small entities.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis for any proposed rule that may 
have a significant impact on the operation of a substantial number of 
small rural hospitals. Such an analysis must conform to the provisions 
of section 604 of the RFA. For purposes of section 1102(b) of the Act, 
we define a small rural hospital as a hospital that is located outside 
of a Metropolitan Statistical Area and has fewer than 50 beds. We are 
not preparing a rural impact statement since we have determined, and 
certify, that this proposed rule would not have a significant impact on 
the operations of a substantial number of small rural hospitals.
    Although the provisions proposed in this rule do not lend 
themselves to a quantitative impact estimate, we do not anticipate that 
they would have a substantial economic impact on home health agencies. 
However, to the extent that our proposals may have significant effects 
on providers or beneficiaries, be viewed as controversial, or be 
mandated by statute, we believe it is desirable to inform the public of 
our projections of the likely effects of the proposals.
    As discussed in detail above, this proposed rule sets forth new HHA 
COPs that revise or eliminate many existing requirements and 
incorporate critical requirements into four ``core conditions.'' These 
four COPs--Patient Rights, Patient Assessment, Care Planning and 
Coordination of Services,

[[Page 11024]]

and Quality Assessment and Performance Improvement would focus both 
provider and surveyor efforts on the actual care delivered to the 
patient, the performance of the HHA as an organization, and the impact 
of the treatment furnished by the HHA on the health status of its 
patients. The impact of the proposed rule to incorporate OASIS into the 
HHA COPs is separately detailed in that proposed rule (which is set 
forth elsewhere in today's issue of the Federal Register). In 
developing these proposed COPs, we have retained structure and process-
oriented requirements only where we believe they are essential to 
achieving desired patient outcomes or preventing harmful outcomes (for 
example, home health aide competency and supervision, timeliness of 
patient assessment).
    Under the proposed Comprehensive Assessment COP, we are proposing 
specific timeframes for the initial assessment, completion of the 
assessment, and interim updates to the patient assessment. We believe 
that these requirements, though process-oriented, are predictive of 
good patient care and safety, as well as necessary to prevent harm to 
the patient. Our rationale for these timeframes is that by definition, 
a new patient being referred to a home health agency for initiation of 
services is at a point of immediate and serious need, especially as 
patients are returned home from hospital care sooner than ever before. 
Likewise, as the complexity of the care needs of patients increases, so 
does the need for comprehensive assessment of the patient. The 
importance of coming to closure and implementing an effective care plan 
becomes paramount.
    We believe that these timeframe requirements pose little or no 
burden for the HHA since they would in all likelihood be performed in 
the absence of regulations. However, the proposed timeframes serve as a 
strong performance expectation for HHAs that may not have adequate 
resources (financial and human resources) by setting the outside 
acceptable time for these activities to occur. If too many patient 
referrals occur together, effective service delivery to some patients 
might be delayed by the HHA's inability to see the patient quickly or 
to conduct and complete the needed comprehensive assessment. Thus, if 
an HHA recognizes that its workload is such that it is not capable of 
beginning work with a patient virtually immediately upon referral, the 
patient should not be accepted for care.
    We welcome comments to address whether the specific proposed 
timeframes in the regulation text are reasonable and consistent with 
current medical practice, and whether the timeframes should be used as 
benchmarks to reflect patient health and safety concerns involving the 
timeliness of the assessment components.
    Provision of an assessment would be necessary to provide the 
appropriate information for compliance with the current plan of care 
requirements. The existing COPs contain several requirements that 
address the need for patient assessment, including most notably a long 
and detailed list of items under existing Sec. 484.18(a) that are 
required to be covered in a plan of care, such as pertinent diagnoses, 
mental status, and functional limitations. In place of this 
requirement, we would emphasize the importance of the comprehensive 
assessment by establishing patient assessment as a separate COP, 
specifying the desired outcome of the assessment (that is, the 
identification of a patient's care needs), and then allowing HHAs the 
flexibility to determine how best to achieve this outcome. We believe 
that this approach is consistent with current accepted practices in 
HHAs and that most HHAs now perform a comprehensive assessment for most 
of their patients. We need to balance the possible short-term increase 
in costs or other administrative burden, if any, on the HHA with the 
long-term fundamental positive effect on patient health resulting from 
an organized and timely comprehensive assessment. As stated above, we 
are soliciting comments on the utility of specific timeframes for the 
comprehensive assessment.
    We are proposing to require that HHAs ensure a majority of at least 
50 percent of the total skilled professional services are provided 
directly. We are proposing to phase in this new approach over 3 years. 
In the first year, HHAs would be required to ensure that at least 30 
percent of the skilled professional services are provided directly. In 
the second year, HHAs would be required to ensure that at least 40 
percent of the skilled professional services are provided directly. By 
the third year of enactment, HHAs would be required to ensure that at 
least 50 percent of the skilled professional services are provided 
directly.
    Currently, an HHA must provide at least one of the qualifying 
services directly, but may provide the second qualifying service and 
additional services under arrangements with another agency or 
organization. We believe that the excessive use of contracting could be 
an indication that an HHA may be exceeding its patient capacity, 
leading to possible instability that can result in disruptions to 
patient care. Excessive contracting is also a potential indication that 
the HHA may not be exercising full control over the provision of 
quality care. Participants in a series of home health initiative 
meetings agreed that this process requirement is a strong predictor of 
appropriate management and in proposing this approach we are relying on 
the judgement of the industry. This is a performance safeguard that 
seeks to ensure continuity and quality of care through the restriction 
of contracted care in the home care environment.
    It is important to note that HHAs currently report employment data 
on their cost reports (freestanding HHAs: Form-HCFA-1728-S-3 and 
hospital-based HHAs: Form-HCFA-2552-H-S-4). We invite comment on this 
shift in our approach and on any concerns HHAs may have regarding their 
ability, both operationally and financially, to undertake this new 
approach. We also invite comment on any other creative approaches that 
could be used to limit the use of contracted care in the home care 
industry.
    We are proposing that HHAs conduct criminal background checks of 
home health aides as a condition of employment to safeguard 
beneficiaries from abusive practices in their home. This proposed 
requirement may have some impact though not significant, on HHAs, which 
are considered small entities. We already have similar patient 
protection requirements in other rules governing other Medicare-
participating providers. These protections are especially necessary in 
the decentralized environment of home health delivery. We are 
soliciting comments on the impact on the HHA to operationally comply 
with this requirement.
    We are proposing a new standard to address the parent/branch 
relationship to ensure a consistent level of care throughout the HHA as 
an organizational entity. We added strength to the current definitions 
by raising them to standard level requirements. This will enable 
surveyors to cite a deficiency when the performance by an HHA's branch 
does not ensure that the branch is meeting the HHA requirements 
applicable to its operation. HCFA has concern about branches that are 
not required to independently meet the conditions of participation, but 
act as an independent HHA and the affect of that situation on the 
consistency and quality of care provided. We estimate that this 
standard will not disrupt current business practice because the current 
definitions of parent and branch office provide a performance

[[Page 11025]]

expectation for the HHA as an organizational entity as a condition of 
participation for Medicare certification. The current definitions 
provide a clear expectation that the parent office develops and 
maintains administrative controls of branches; and the branch office is 
location or site from which a home health agency provides services 
within a portion of the total geographic area served by the parent 
agency and is part of the HHA and is located sufficiently close to 
share administration, supervision and services in a manner that renders 
it unnecessary for the branch to independently meet these conditions of 
participation as a home health agency.
    More often though, we have eliminated structural or process-
oriented requirements that we no longer believe are necessary (such as 
personnel policies or the prescriptive details concerning the duties of 
a registered nurse versus those of a licensed practical nurse), in 
favor of an approach that, through the proposed core COP on quality 
assessment and performance improvement, invests HHAs with internal 
responsibility for improving their performance. This approach is 
intended to incorporate into our regulations current best practices in 
well-managed HHAs, relying on the HHA to identify and resolve its 
performance problems in the most effective and efficient manner 
possible.
    We believe that the proposed COPs would decrease the administrative 
burden on HHAs to comply with detailed Federal requirements, thus 
reducing the costs incurred by the typical HHA in meeting the Medicare 
conditions of participation. (See the information collection section 
below for examples of specific changes in the recordkeeping and 
paperwork burden of HHAs that would be associated with this proposed 
rule.) Instead, the proposed COPs would provide HHAs with much more 
flexibility to determine how best to pursue our shared quality of care 
objectives in the most cost-effective manner. We expect HHAs to develop 
different approaches to compliance based on their varying resources and 
patient populations, differences in laws in various localities (such as 
those concerning personnel standards), and other factors. Given the 
uncertainties over the behavior of individual HHAs under the proposed 
new COPs, quantitative analysis of the effects of these proposed 
changes is not possible. However, even in situations where the proposed 
requirements could result in some immediate costs to an individual HHA 
(for example, for an HHA that would need to upgrade its existing 
performance evaluation program), we believe that the changes that the 
HHA would make would produce real but difficult to estimate long-term 
economic benefits (such as more cost-effective performance practices or 
higher patient satisfaction that could lead to increased business for 
the HHA.)
    We believe that the proposed COPs would decrease the regulatory 
burden on HHAs and provide them with greatly enhanced flexibility. At 
the same time, the proposed requirement for a program of continuous 
quality assessment and performance improvement would increase 
performance expectations for HHAs in terms of achieving needed and 
desired outcomes for patients and increasing patient satisfaction with 
services provided. This patient-centered, outcome oriented change in 
approach to the regulation will also likely fundamentally change our 
approach to the survey process. For example, since the proposed 
regulation sets performance expectations for the HHA to constantly 
improve, it may be possible to alter significantly, or possibly 
eliminate altogether the current Functional Assessment Instrument 
(FAI), which surveyors use to assess the outcomes of care through home 
visits and some record review. In an expanded review of the agency's 
approach to quality assessment and performance improvement, we may 
approach this task differently, with greater flexibility than the 
current FAI affords. We invite comment on this fundamental shift in our 
regulatory approach and on any concerns HHAs may have regarding their 
ability, both operationally and financially, to undertake this new 
approach. We are especially interested in comments that address how 
HCFA could improve this approach, what additional flexibility could be 
provided, what (if any) process requirements that are critical to 
patient care and safety should be added, and how well HCFA's investment 
in the HHA's participation in a strong continuous quality assessment 
and performance improvement program of their own design will achieve 
our stated and intended goal of improving the efficiency, effectiveness 
and quality of patient outcomes and satisfaction. We are especially 
interested in comments that address how HCFA could improve this 
approach, what additional flexibility could be provided, what (if any) 
process requirements that are critical to patient care and safety 
should be added, and how well HCFA's investment in the HHA's 
participation in a strong continuous quality assessment and performance 
improvement program of its own design will achieve our stated and 
intended goal of improving the efficiency, effectiveness, and quality 
of patient outcomes and satisfaction.
    For the reasons given above, we certify that the proposed rule will 
not have a significant effect on a substantial number of small entities 
and that a regulatory flexibility analysis is not needed.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, agencies are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     Whether the information collection is necessary and useful 
to carry out the proper functions of the agency;
     The accuracy of the agency's estimate of the information 
collection burden;
     The quality, utility, and clarity of the information to be 
collected; and
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    Therefore, we are soliciting comment on each of these issues for 
the proposed information collection requirements discussed below.
    The title and description of the individual information collection 
requirements are shown below with an estimate of the annual reporting 
and recordkeeping burden. Included in the estimate is the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    As indicated earlier in this preamble, the current regulations 
dealing with the HHA conditions of participation are contained in part 
484 of the Code of Federal Regulations. The information collection 
requirements for this part are currently approved under OMB approval 
number 0983-0365 with an expiration date of May 31, 1998. Since we are 
proposing to revise or delete many of the information collection

[[Page 11026]]

requirements in the existing HHA conditions of participation, we will 
be seeking OMB approval for all of the information collection 
requirements contained in the proposed part 484, including those that 
are currently approved under OMB approval number 0983-0365. Many of 
these requirements are performed only once by each HHA (such as the 
development of a standard patient's right disclosure) or would normally 
be performed by an HHA in the normal course of responsible business 
practices in the absence of these requirements (such as the maintenance 
of patient's records) and therefore represent a minimal, if any, burden 
on HHAs. Following is a list of the specific information collection 
requirements contained in the proposed 42 CFR Part 484.

Section 484.50  Patient's Rights

    This section dealing with patient's rights mirrors those 
information collection requirements in section 4021 of OBRA '87, which 
specify the rights of patients receiving services from Medicare 
certified HHAs. These requirements are necessary to ensure compliance 
with statutory responsibilities at section 1891 of the Act. Current 
requirements at Sec. 484.10 that are retained in the proposed rule 
include:
    a. A HHA must provide the patient with a written notice of the 
patient's rights in advance of providing care and document that it has 
complied with this requirement.
    b. The HHA must document the existence and resolution of complaints 
about care furnished by the HHA that were made by the patient, the 
patient's family or guardian.
    c. The HHA must advise the patient in advance of the disciplines 
that will furnish the care, the plan of care, expected outcomes, 
barriers to treatment, and any changes in the care to be furnished.
    d. The HHA must advise the patient of the HHA's policies and 
procedures regarding disclosure of patient records.
    e. The HHA must advise the patient of his/her liability for 
payment.
    f. The HHA must advise the patient of the number, purpose, and 
hours of operation of the State home health hotline.
Burden Estimate
    We foresee that the HHAs will develop a standard notice of rights 
that will fulfill the requirements contained in this section. The 
standard notice will contain a checklist to be completed by the HHA in 
a manner appropriate to each patient being accepted. A carbon copy of 
the signed notice will serve as documentation of compliance. We 
estimate that the completion of this form will impose a burden of 
approximately 3 seconds per each current HHA patient for 1 year (3 
seconds  x  3.4 million patients) = 2,833 hours and each new admission 
in succeeding years (3 seconds  x  800,000 (approximate admission in 
1995) = 666 hours.
    In the rare circumstances to which paragraph (b) applies, it is 
already common practice to have this information retained in the HHA's 
record. Therefore, this requirement imposes no burden.

Section 484.55  Comprehensive Assessment

    This new section on comprehensive assessment of the patient would 
require HHAs to provide each patient with a comprehensive assessment 
(including drug regimen review) of his or her needs which would be used 
to develop expectations for treatment. We are proposing specific 
timeframes for the initial assessment visit and completion of the 
assessment of the patient because we believe that these requirements 
are predictive of good patient care and safety and as well as the 
prevention of harm to the patient. As many HHAs are already performing 
a standardized patient assessment within their own internal policies, 
we believe that these timeframes pose little or no burden since they 
would in all likelihood be performed in the absence of regulations. In 
addition, since HHAs already routinely obtain assessment information 
from patients upon initiation of care and on an ongoing basis during 
treatment, we believe this new requirement would not place an 
information collection or paperwork burden on HHAs. The proposed 
assessment timeframes serve as a strong performance expectation for 
HHAs.
    It is important to note that this proposed rule does not include 
the requirement that HHAs participate in an external quality 
improvement process incorporating the core standard assessment data 
set. As discussed above, HCFA is proposing to require use of a core 
standard assessment data set, as discussed elsewhere in today's issue 
of the Federal Register. Reporting requirements associated with that 
proposal are discussed separately in that Federal Register notice.

Section 484.60  Care Planning and Coordination of Services

    This new section reflects an interdisciplinary, coordinated 
approach to home health care delivery. The proposed new care planning 
and coordination of services section sets forth the requirement that 
each patient's written plan of care specifies the care and services 
necessary to meet the patient specific needs identified in the 
comprehensive assessment and the measurable outcomes that the HHA 
anticipates will occur as a result of implementing and coordinating the 
plan of care. This new section incorporates several of the existing 
requirements under current Sec. 484.18. Section 484.18 consists of 
longstanding requirements which implement statutory provisions found in 
sections 1835 and 1814 of the Act, as well as section 1891(a) as 
amended by OBRA `87 for non-Medicare patients. In addition, HCFA Forms 
485-488 are currently approved under OMB No. 0938-0357.
Burden Estimate
    We believe that these requirements are commonly accepted as good 
medical practice. Therefore, they would impose little or no burden on 
HHAs as they would in all likelihood be performed even in the absence 
of these regulations. The only anticipated burden associated with this 
requirement concerns the possible establishment and periodic review of 
plans of care by doctors of osteopathy or podiatry. We estimate that 
this will affect approximately 3 percent of home health patients, 
resulting in a burden of 24,000  x  5 minutes = 2,000 hours for new 
admissions and 102,000  x  3 minutes = 5,100 hours for existing 
patients.

Section 484.65  Quality Assessment and Performance Improvement

    This new section requires the HHA to develop, implement, maintain 
and evaluate an effective, data driven quality assessment and 
performance improvement program. Current requirements for HHAs do not 
provide for the operation of an internal quality assessment and 
performance improvement program, whereby the HHA examines its methods 
and practices of providing care, identifies the opportunities to 
improve its performance and then takes actions that result in higher 
quality of care for HHA patients. We have not prescribed the structures 
and methods for implementing this requirement and have focused the 
condition toward the expected results of the program. This provides 
flexibility to the HHA, as it is free to develop a creative program 
that meets the HHA's needs and reflects the scope of its services. This 
new provision would replace the current conditions at Sec. 484.16 Group 
of professional

[[Page 11027]]

personnel and Sec. 484.52 Evaluation of an agency's program.
Burden Estimate
    We believe the writing of internal policies governing the HHA's 
approach to the development, implementation, maintenance, and 
evaluation of the quality assessment and performance improvement 
program will impose a burden. We want HHAs to utilize maximum 
flexibility in their approach to quality assessment and performance 
improvement programs. Flexibility is provided to HHAs to ensure that 
each program reflects the scope of its services. We believe that this 
requirement provides a performance expectation that HHAs will set their 
own goals and use the information to continuously strive to improve 
their performance over time. Given the variability across HHAs and the 
flexibility provided, we believe that the burden associated with 
writing the internal policies governing the approach to the 
development, implementation, and evaluation of the quality assessment 
and performance improvement program will reflect that diversity. Given 
the variability, it is difficult to predict an exact burden. We want to 
provide flexibility and do not want to be prescriptive in defining 
hourly parameters. However, we need to quantify the burden associated 
with this requirement. We estimate that the burden associated with 
writing the internal policies would be an average of 4 hours annually 
(although this figure may be much lower, since many HHAs have existing 
internal quality improvement programs). We estimate on average:

4 hours  x  9,058 (total number of Medicare-certified HHAs in calendar 
year 1995) = 36,232 hours
4 hours  x  1,145 (total number of newly certified HHAs in calendar 
year 1995) = 4,580 hours

Section 484.70  Skilled Professional Services

    This new section would require skilled professionals who provide 
services to HHA patients as employees or under arrangement to 
participate in all aspects of care, including an ongoing 
interdisciplinary evaluation and development of the plan of care and be 
actively involved in the HHA's quality assessment and performance 
improvement program. In place of current provisions governing skilled 
nursing services Sec. 484.30, therapy services Sec. 484.32, and medical 
social services Sec. 484.34 we would consolidate all new requirements 
under one new condition, Skilled professional services. We are broadly 
describing the expectations of skilled professionals who participate in 
the interdisciplinary approach to home health care delivery. The 
current requirements are commonly accepted as good medical practice and 
therefore impose little or no burden on the HHAs as they would in all 
likelihood be performed in the absence of Federal regulations.
    We are proposing a new standard that the HHA must ensure that a 
majority of at least 50 percent of total skilled professional services 
are routinely provided directly. We are proposing to phase in this new 
approach over three years. In the first year, HHAs would be required to 
ensure at least 30 percent of the total skilled professional services 
are provided directly. In the second year, HHAs would be required to 
ensure at least 40 percent of the total skilled professional services 
are provided directly. In the third year, we would require at least 50 
percent of the total skilled professional services are provided 
directly. The requirement that the HHAs determine compliance with this 
standard imposes a one-time annual burden of 2 minutes on existing HHAs 
and any newly certified HHAs to determine the total number of skilled 
professional visits that are provided directly. HHAs currently report 
employment data (full-time equivalents) on their cost reports 
(freestanding HHAs: Form HCFA-1728-S-3 currently approved under OMB 
number 0938-0022 and hospital based HHAs: Form HCFA-2552-H-S-4 
currently approved under OMB number 0938-0050).
Burden Estimate
2 minutes  x  9,058 existing HHAs = 302 hours
2 minutes  x  1,145 newly certified HHAs = 39 hours

Section 484.75  Home Health Aide Services

    This section governs the requirements for home health aide 
services. Many requirements in this section directly mirror the 
statutory requirements of section 4021 of OBRA '87. The requirements 
are longstanding and implement sections 1891 and 1861 of the Act: (1) 
The HHA must maintain sufficient documentation to demonstrate that 
training requirements are met; (2) The HHA's competency evaluation must 
address all required subjects; (3) The HHA must maintain documentation 
that demonstrates that requirements of competency evaluation are met; 
and (4) A registered nurse or appropriate skilled professional prepares 
written instructions for care to be provided by the home health aide.
    In addition, this section requires the HHA to conduct criminal 
background checks of home health aides as a condition of employment.
Burden Estimate
    The first requirement imposes no additional burden as this 
documentation will be included in personnel records. The second 
requirement will impose a one time burden (to develop competency 
evaluation) on all existing agencies and any newly certified agencies 
in the future. We estimate that it will require approximately 2 hours 
for each HHA to formulate this evaluation (although this figure may be 
much lower in practice if agencies chose to adopt standardized 
evaluation forms).

2 hours  x  9,058 existing HHAs = 18,116 hours annually
2 hours  x  1,145 newly certified HHAs each year = 2,290 hours annually

    Maintaining documentation that demonstrates that each aide has met 
the evaluation requirements imposes no burden as this information will 
be retained in personnel records. The third requirement imposes a 
burden of approximately 3 minutes for each newly admitted patient that 
receives aide care, or 3 minutes  x  260,000 (estimated number of 
patients receiving aide care) = 13,000 hours.
    We are not able at this time to estimate the burden associated with 
the requirement that the HHA conduct criminal background checks of home 
health aides. We solicit comments on whether HHAs believe this 
requirement will impose an additional burden on them and what that 
burden would be.

Section 484.100  Compliance With Federal, State, and Local Laws

    Under this section, the HHA must disclose to the State Survey 
Agency at the time of the HHA's initial request for certification the 
name and address of all persons with an ownership or control interest 
in the HHA, the name and address of all officers, directors, agents, 
and managers of the HHA, as well as the name and address of the 
corporation or association responsible for the management of the HHA 
and the chief executive and chairman of that corporation or 
association. This requirement directly implements section 4021 of OBRA 
'87.
Burden Estimate
    This provision expands upon a similar requirement currently 
contained in Sec. 405.1221(b). It imposes a minimal burden of adding 
the necessary additional information to the current disclosure used by 
existing HHAs and

[[Page 11028]]

the creation of a new disclosure of ownership for newly certified HHAs. 
The burden for supplementing the existing disclosure with the required 
additional information is estimated at--

5 minutes  x  9,058 (total number of Medicare certified HHAs in 1995) = 
755 hours
5 minutes  x  1,145 (number of newly certified HHAs in 1995) = 95 hours

Section 484.105  Organization and Administration of Services

    The revised organization and administration of services condition 
simplifies the structure of the current requirements and provides 
flexibility to the HHA by replacing the current focus on organizational 
structures with new performance expectations for the administration of 
the HHA as an organizational entity. In the proposed condition we 
revise the current standard on governing body Sec. 484.14(b), retain 
with only minor editorial changes the current standard on services 
furnished Sec. 484.12(a), retain with only minor editorial changes, the 
requirements with respect to services furnished under arrangements 
under existing Sec. 484.14(h), delete the current standards on the 
administrator Sec. 484.14(c), delete the current standards on 
supervising physician or registered nurse Sec. 484.14(d), delete the 
current standards on personnel policies Sec. 484.14(e), delete the 
current standards on institutional planning Sec. 484.14(i), relocate 
current condition Sec. 484.38 under this condition and relocate the 
current standard on laboratory services under the compliance with 
Federal, State and local laws condition.
    The current institutional planning requirements under 
Sec. 484.14(i) impose 5,474.5 hours of burden under the current HHA 
conditions of participation. We are proposing to delete that 
requirement from the HHA conditions of participation, therefore, 
reducing current burden associated with the institutional planning 
requirements.

Section 484.110  Clinical Records

    A clinical record containing pertinent past and current findings is 
maintained for every patient receiving home health services. Clinical 
records are retained for 5 years after the month the cost report to 
which the records is filed with the intermediary. Written procedures 
govern the use and removal of records and conditions for release of 
information. This section contains longstanding provisions which are 
specifically required in section 1861(o) of the Act and are necessary 
to the preservation of the patient's privacy and the quality of care. 
There is no burden associated with the retention of patient records as 
this merely entails the filing of a copy of the record.

Total Burden Estimate

    The total annual hourly burden for the information collection 
requirements under the revisions proposed to the HHA conditions of 
participation is estimated to be 86,008 hours. We estimate the annual 
hourly burden under the revised COPs to be 8.4 hours per Medicare-
certified HHA (86,008 total hours/10,203 (total number of Medicare-
certified HHAs and newly certified HHAs in calendar year 1995). The 
total annual hourly burden for the information collection requirements 
under OMB approval number 0938-0365 (current HHA conditions of 
participation) was estimated to be 7.7 hours per Medicare-certified HHA 
(69,499 total hours/9,009 (total number of Medicare-certified HHAs and 
newly certified HHAs as of November 1994).
    Again, we welcome comments on all aspects of the above material. 
Written comments on these information collection and recordkeeping 
requirements should be mailed directly to the following:
    Health Care Financing Administration, Office of Financial and Human 
Resources, Management Planning and Analysis Staff, Room C2-26-17, 7500 
Security Boulevard, Baltimore, Maryland 21244-1850; and Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Room 10235, New Executive Office Building Washington, DC 20503, 
Attention: Allison Herron Eydt, HCFA Desk Officer.
    Any comments submitted on these collection of information 
requirements must be received by these two offices on or before May 9, 
1997, to enable OMB to act promptly on HCFA's information collection 
approval request.

VI. Crosswalk Current COPs/Revised COPs

------------------------------------------------------------------------
              Current COPs                         Revised COPs         
------------------------------------------------------------------------
Patient Rights 484.10:                                                  
    484.10(a)..........................  Intact 484.50(a).              
    484.10(b)..........................  Revised 484.50(b).             
    484.10(c)..........................  Revised 484.50(c).             
    484.10(d)..........................  Revised 484.50(d).             
    484.10(e)..........................  Intact 484.50(e).              
    484.10(f)..........................  Intact 484.50(f).              
Compliance with Federal, State and                                      
 local laws, disclosure of ownership                                    
 information 484.12:                                                    
    484.12(a)..........................  Intact with minor revisions    
                                          484.100(a).                   
    484.12(b)..........................  Intact 484.100(b).             
    484.12(c)..........................  Incorporated into QAPI 484.65. 
Organization, Services and                                              
 Administration 484.14:                                                 
    484.14(a)..........................  Revised 484.105(e).            
    484.14(b)..........................  Revised 484.105(a).            
    484.14(c)..........................  Revised 484.105(a).            
    484.14(d)..........................  Deleted.                       
    484.14(e)..........................  Incorporated into QAPI 484.65. 
    484.14(f)..........................  Deleted.                       
    484.14(g)..........................  Revised 484.60(d).             
    484.14(h)..........................  Revised 484.105(d).            
    484.14(i)..........................  Deleted.                       
    484.14(j)..........................  Intact 484.100(d).             
Group of Professional Personnel 484.16.  Deleted--QAPI approach 484.65. 
Acceptance of patients, plan of care                                    
 and medical supervision 484.18:                                        
    484.18(a)..........................  Revised 484.60(a).             
    484.18(b)..........................  Revised 484.60(b).             
    484.18(c)..........................  Revised 484.60(c) and          
                                          484.55(a).                    

[[Page 11029]]

                                                                        
Skilled Nursing Services 484.30........  Deleted--combined aspects      
                                          484.70.                       
Therapy Services 484.32................  Deleted--combined aspects      
                                          484.70.                       
Medical Social Services 484.34.........  Deleted--combined aspects      
                                          484.70.                       
Home Health Aide Services 484.36:                                       
    484.36(a)..........................  Intact 484.75(b).              
    484.36(a)(1)(i)....................  Revised 484.75(b)(1)(i).       
    484.36(a)(1) (ii)-(xii)............  Intact 484.75(b)(1) (ii)-(xii).
    484.36(a)(1)(xiii).................  Revised 484.75(b)(1)(xiii).    
    484.36(a)(2)(i)....................  Intact 484.75(b)(2).           
    484.36(a)(2)(ii)...................  Revised 484.75(b)(3).          
    484.36(a)(3).......................  Revised 484.75(b)(4).          
    484.36(b)(1).......................  Revised 484.75(c)(1).          
    484.36(b)(2)(i)....................  Intact 484.75(c)(2).           
    484.36(b)(2)(ii)...................  Deleted.                       
    484.36(b)(2)(iii)..................  Revised 484.75(d)(1).          
    484.36(b)(3)(i)....................  Revised 484.75 (c)(3) and      
                                          (d)(2).                       
    484.36(b)(3)(ii)...................  Revised 484.75(c)(4).          
    484.36(b)(3)(iii)..................  Revised 484.75(c)(2).          
    484.36(b)(4)(i)....................  Intact 484.75(c)(5).           
    484.36(b)(4)(ii)...................  Deleted.                       
    484.36(b)(5).......................  Intact 484.75(c)(6).           
    484.36(b)(6).......................  Deleted.                       
    484.36(c)..........................  Revised 484.75(e).             
    484.36(d)..........................  Revised 484.75(f).             
    484.36(e)..........................  Intact 484.75(g).              
Qualifying to furnish outpatient PT or   Intact 484.105(f).             
 Speech language pathology 484.38.                                      
Clinical Records 484.48................  Revised 484.110.               
Evaluation of Agency's Program 484.52..  Deleted QAPI approach 484.65.  
Definitions 484.2......................  Revised 484.2.                 
Personnel Qualifications 484.4.........  Revised Approach 484.115.      
------------------------------------------------------------------------

VII. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this preamble, and, if we proceed with a subsequent 
document, we will respond to the comments in the preamble to that 
document.
    HCFA proposes to amend 42 CFR chapter IV as follows:

PART 484--CONDITIONS OF PARTICIPATION: HOME HEALTH AGENCIES

    1. The authority citation for part 484 continues to read as 
follows:

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

    2. Part 484 is revised to read as follows:

PART 484--CONDITIONS OF PARTICIPATION: HOME HEALTH AGENCIES

Subpart A--General Provisions

Sec.
484.1  Basis and scope.
484.2  Definitions.

Subpart B--Patient Care

484.50  Condition of participation: Patient rights.
484.55  Condition of participation: Comprehensive assessment of 
patients.
484.60  Condition of participation: Care planning and coordination 
of services.
484.65  Condition of participation: Quality assessment and 
performance improvement.
484.70  Condition of participation: Skilled professional services.
484.75  Condition of participation: Home health aide services.

Subpart C--Organizational Environment

484.100  Condition of participation: Compliance with Federal, State, 
and local laws.
484.105  Condition of participation: Organization and administration 
of services.
484.110  Condition of participation: Clinical records.
484.115  Condition of participation: Personnel qualifications for 
skilled professionals.

Subpart A--General Provisions


Sec. 484.1  Basis and scope.

    (a) Basis. This part is based on sections 1861(o) and 1891 of the 
Act, which establish the conditions that an HHA must meet in order to 
participate in Medicare, and specify that the Secretary may impose 
additional requirements that are considered necessary to ensure the 
health and safety of patients.
    (b) Scope. The provisions of this part serve as the basis for 
survey activities for the purpose of determining whether an agency 
meets the requirements for participation in Medicare.


Sec. 484.2  Definitions.

    As used in this part--
    Branch office means a location or site from which a home health 
agency provides services within a portion of the total geographic area 
served by the parent agency. The branch office is part of the home 
health agency and is located sufficiently close to share 
administration, supervision, and services in a manner that renders it 
unnecessary for the branch independently to meet the conditions of 
participation as a home health agency.
    Parent home health agency means the agency that develops and 
maintains administrative control of branches.
    Quality indicator means a specific, valid, and reliable measure of 
access, care outcomes, or satisfaction, or a measure of a process of 
care that has been empirically shown to be predictive of access, care 
outcomes, or satisfaction.

[[Page 11030]]

Subpart B--Patient Care


Sec. 484.50  Condition of participation: Patient rights.

    The patient has the right to be informed of his or her rights. The 
HHA must protect and promote the exercise of these rights.
    (a) Standard: Notice of rights.
    (1) The HHA must provide the patient with a written notice of the 
patient's rights in advance of furnishing care to the patient or during 
the initial evaluation visit before the initiation of treatment.
    (2) The HHA must maintain documentation showing that it has 
complied with the requirements of this section.
    (b) Standard: Exercise of rights and respect for property and 
person.
    (1) The patient has the right to exercise his or her rights as a 
patient of the HHA.
    (2) The patient's family or guardian may exercise the patient's 
rights when the patient has been judged incompetent.
    (3) The patient has the right to have his or her property treated 
with respect.
    (4) The patient has the right to voice grievances regarding 
treatment or care that is (or fails to be) furnished, or regarding the 
lack of respect for property by anyone who is furnishing services on 
behalf of the HHA and must not be subjected to discrimination or 
reprisal for doing so.
    (5) The HHA must investigate complaints made by a patient or the 
patient's family or guardian regarding treatment or care that is (or 
fails to be) furnished, or regarding the lack of respect for the 
patient or the patient's property by anyone furnishing services on 
behalf of the HHA, and must document both the existence of the 
complaint and the resolution of the complaint.
    (c) Standard: Right to be informed and to participate in planning 
care and treatment.
    (1) The patient has the right to be informed, in advance, about the 
care to be furnished, the plan of care, expected outcomes, barriers to 
treatment, and of any changes in the care to be furnished.
    (i) The HHA must advise the patient in advance of the disciplines 
that will furnish care, and the frequency of visits proposed to be 
furnished.
    (ii) The HHA must advise the patient in advance of any change in 
the plan of care before the change is made.
    (2) The patient has the right to participate in the planning of the 
care.
    (i) The HHA must advise the patient in advance of the right to 
participate in planning the care or treatment and in planning changes 
in the care or treatment.
    (ii) The HHA must comply with the requirements of subpart I of part 
489 of this chapter relating to maintaining written policies and 
procedures regarding advance directives. The HHA must inform and 
distribute written information to the patient, in advance, concerning 
its policies on advance directives, including a description of 
applicable State law.
    (d) Standard: Confidentiality of medical clinical records. The 
patient has the right to confidentiality of the clinical records 
maintained by the HHA. The HHA must advise the patient of the agency's 
policies and procedures regarding disclosure of clinical records.
    (e) Standard: Patient liability for payment.
    (1) The patient has the right to be advised, before care is 
initiated, of the extent to which payment for the HHA services may be 
expected from Medicare or other sources, and the extent to which 
payment may be required from the patient. Before the plan of care is 
initiated, the HHA must inform the patient orally and in writing of:
    (i) The extent to which payment may be expected from Medicare, 
Medicaid, or any other Federally funded or aided program known to the 
HHA;
    (ii) The charges for services that will not be covered by Medicare; 
and
    (iii) The charges that the individual may have to pay.
    (2) The patient has the right to be advised orally and in writing 
of any changes in the information provided in accordance with paragraph 
(e)(1) of this section when they occur. The HHA must advise the patient 
of these changes orally and in writing as soon as possible, but no 
later than 30 calendar days from the date that the HHA becomes aware of 
a change.
    (f) Standard: Home health hotline. The patient has the right to be 
advised of the availability of the toll-free home health hotline in the 
State. When the agency accepts the patient for treatment or care, the 
HHA must advise the patient in writing of the telephone number of the 
home health hotline established by the State, the hours of its 
operation, and that the purpose of the hotline is to receive complaints 
or questions about local HHAs.


Sec. 484.55  Condition of participation: Comprehensive assessment of 
patients.

    Each patient must receive, and an HHA must provide, a patient-
specific, comprehensive assessment that identifies the patient's need 
for home care and that meets the patient's medical, nursing, 
rehabilitative, social, and discharge planning needs.
    (a) Standard: Drug regimen review. The comprehensive assessment 
must include a review of the patient's drug regimen in order to 
identify any potential adverse effects and drug reactions, including 
ineffective drug therapy, significant side effects, significant drug 
interactions, duplicate drug therapy, and noncompliance with drug 
therapy.
    (b) Standard: Initial assessment visit.
    (1) Based on physician's orders, a registered nurse must perform an 
initial assessment visit to determine the immediate care and support 
needs of the patient. The initial assessment visit must be held either 
within 48 hours of referral, or within 48 hours of the patient's return 
home, or within 48 hours of the physician-ordered start of care date, 
if that is later.
    (2) When rehabilitation therapy service (speech language pathology 
services, physical therapy, or occupational therapy) is the only 
service ordered by the physician, the initial assessment visit may be 
made by the appropriate rehabilitation skilled professional.
    (c) Standard: Timeframe for completion of the comprehensive 
assessment. The HHA must complete the comprehensive assessment in a 
timely manner consistent with the patient's immediate needs, but no 
later than 5 working days after the start of care.
    (d) Standard: Update of comprehensive assessment. The comprehensive 
assessment must include information on the patient's progress toward 
clinical outcomes, and must be updated and revised--
    (1) As frequently as the condition of the patient requires, but not 
less frequently than every 62 days beginning with the start of care 
date;
    (2) When the plan of care is revised for physician review; and
    (3) At discharge.


Sec. 484.60  Condition of participation: Care planning and coordination 
of services.

    Each patient must have a written plan of care that must specify the 
care and services necessary to meet the patient-specific needs 
identified by the physician or in the comprehensive assessment, or 
both, and the measurable outcomes that the HHA anticipates will occur 
as a result of implementing and coordinating the plan of care. Patients 
are accepted for treatment on the basis of a reasonable expectation 
that the patient's medical, nursing, and social needs can be met 
adequately by the

[[Page 11031]]

agency in the patient's place of residence.
    (a) Standard: Plan of care. All home health services furnished to 
patients must follow a written plan of care established and 
periodically reviewed by a doctor of medicine, osteopathy, or podiatric 
in accordance with Sec. 409.42 of this chapter. All patient care orders 
must be included in the plan of care.
    (b) Standards: Review and revision of the plan of care.
    (1) The plan of care must be reviewed and revised by the physician 
and the HHA as frequently as the patient's condition requires, but no 
less frequently than once every 62 days, beginning with the date of 
start of care. The HHA must promptly alert the physician to any changes 
in the patient's condition that suggest a need to alter the plan of 
care or that suggest that measurable outcomes are not being achieved.
    (2) A revised plan of care must include current information from 
the patient's comprehensive assessment and information concerning the 
patient's progress toward outcomes specified in the plan of care.
    (c) Standard: Conformance with physician orders.
    (1) Services and treatments must be administered by agency staff 
only as ordered by the physician.
    (2) Oral orders must be accepted only by personnel authorized to do 
so by applicable State and Federal laws and regulations as well as by 
the HHA's internal policies.
    (3) When services are provided on the basis of a physician's oral 
orders, a registered nurse or qualified therapist responsible for 
furnishing or supervising the ordered services must put the orders in 
writing and sign and date the orders with the date of receipt. Oral 
orders must also be countersigned and dated by the physician.
    (d) Standard: Coordination of care.
    (l) The HHA must maintain a system of communication and integration 
of services, whether provided directly or under arrangement, that 
ensures the identification of patient needs and barriers to care, the 
ongoing liaison of all disciplines providing care, and the contact of 
the physician for relevant medical issues.
    (2) The HHA identifies the level of coordination necessary to 
deliver care to the patient and involves the patient and care giver in 
coordination of care efforts.


Sec. 484.65  Condition of participation: Quality assessment and 
performance improvement.

    The HHA must develop, implement, maintain, and evaluate an 
effective, data-driven quality assessment and performance improvement 
program. The program must reflect the complexity of the HHA's 
organization and services (including those services provided directly 
or under arrangement). The HHA must take actions that result in 
improvements in the HHA's performance across the spectrum of care.
    (a) Standard: Components of quality assessment and performance 
improvement program. The HHA's quality assessment and performance 
improvement program must include, but not be limited to, the use of 
objective measures to demonstrate improved performance with regard to:
    (1) Quality indicator data (derived from patient assessments) to 
determine if individual and aggregate measurable outcomes are achieved 
compared to a specified previous time period.
    (2) Current clinical practice guidelines and professional practice 
standards applicable to home care.
    (3) Utilization data, as appropriate (for example, numbers of 
staff, types of visits, hours of services, etc.).
    (4) Patient satisfaction measures.
    (5) Effectiveness and safety of services (including complex high 
technology services, if provided), including competency of clinical 
staff, promptness of service delivery, and whether patients are 
achieving treatment goals and measurable outcomes.
    (b) Standard: Monitoring performance improvement. The HHA must take 
actions that result in performance improvements and must track 
performance to assure that improvements are sustained over time.
    (c) Standard: Prioritizing improvement activities. The HHA must set 
priorities for performance improvement, considering prevalence and 
severity of identified problems and giving priority to improvement 
activities that affect clinical outcomes. The HHA must immediately 
correct any identified problems that directly or potentially threaten 
the health and safety of patients.
    (d) Standard: External quality assessment and performance 
improvement program. The HHA must meet periodic external quality 
assessment and performance improvement reporting requirements as 
specified by HCFA.
    (e) Standard: Infection control. The HHA must maintain an effective 
infection control program in accordance with the policies and 
procedures of the HHA and Federal and State requirements.


Sec. 484.70  Condition of participation: Skilled professional services.

    Skilled professionals who provide services to HHA patients directly 
or under arrangement must participate in all aspects of care, including 
an ongoing multidisciplinary evaluation and development of the plan of 
care, and be actively involved in the HHA's quality assessment and 
performance improvement program. For purposes of this section, skilled 
professional services include skilled nursing services, physical 
therapy, speech language pathology services, and occupational therapy 
as specified in Sec. 409.44, and medical social worker and home health 
aide services as specified in Sec. 409.45.
    (a) Standard: Services of skilled professionals. Skilled 
professional services are authorized, delivered, and supervised (that 
is, given authoritative procedural guidance) only by health care 
professionals who meet the appropriate qualifications specified under 
Sec. 484.115 and who practice under the HHA's policies and procedures.
    (b) Standard: Provision of services. The HHA must ensure that a 
majority, at least 50 percent, of total skilled professional services 
are routinely provided directly by the HHA. An HHA may provide other 
skilled professional visits under arrangement as needed.


Sec. 484.75  Condition of participation: Home health aide services.

    All home health aide services must be provided by individuals who 
meet the personnel requirements specified in paragraph (a) of this 
section.
    (a) Standard: Home health aide qualifications. A qualified home 
health aide is a person who--
    (1) Has successfully completed a State-established or other 
training program that meets the requirements of paragraph (b) of this 
section and a competency evaluation program or State licensure program 
that meets the requirements of paragraph (c) of this section, or a 
competency evaluation program or State licensure program that meets the 
requirements of paragraph (c) of this section; or has completed a nurse 
aide training or competency evaluation program approved by the State as 
meeting the requirements of Secs. 483.151 through 483.154 of this 
chapter and is currently listed in good standing on the State nurse 
aide registry;
    (2) Under paragraph (a)(1) of this section, an individual is not 
considered to have completed a training and competency evaluation 
program, or a competency evaluation program if, since the individual's 
most recent completion of this program(s), there has been a

[[Page 11032]]

continuous period of 24 consecutive months during none of which the 
individual furnished services described in Sec. 409.40 of this chapter 
for compensation. If a 24-month lapse in furnishing services has 
occurred, the individual must complete another training and competency 
evaluation program or a competency evaluation program, as specified in 
paragraph (a)(1) of this section, before providing services.
    (b) Standard: Home health aide training.--(l) Content and duration 
of training. The home health aide training must include classroom and 
supervised practical training that totals at least 75 hours. A minimum 
of 16 hours of classroom training must precede a minimum of l6 hours of 
supervised practical training. ``Supervised practical training'' means 
training in a practicum laboratory or other setting in which the 
trainee demonstrates knowledge while performing tasks on an individual 
under the direct supervision of a registered nurse or licensed 
practical nurse. The home health aide training program must address 
each of the following subject areas:
    (i) Communication skills, including the ability to read, write, and 
make brief and accurate oral and written presentations to patients, 
care givers, and other HHA staff.
    (ii) Observation, reporting, and documentation of patient status 
and the care or service furnished.
    (iii) Reading and recording temperature, pulse, and respiration.
    (iv) Basic infection control procedures.
    (v) Basic elements of body functioning and changes in body function 
that must be reported to an aide's supervisor.
    (vi) Maintenance of a clean, safe, and healthy environment.
    (vii) Recognizing emergencies and knowledge of emergency 
procedures. (viii) The physical, emotional, and developmental needs of 
and ways to work with the populations served by the HHA, including the 
need for respect for the patient, his or her privacy, and his or her 
property.
    (ix) Appropriate and safe techniques in personal hygiene and 
grooming that include--
    (A) Bed bath.
    (B) Sponge, tub, or shower bath.
    (C) Hair shampoo (sink, tub, or bed).
    (D) Nail and skin care.
    (E) Oral hygiene.
    (F) Toileting and elimination.
    (x) Safe transfer techniques and ambulation.
    (xi) Normal range of motion and positioning.
    (xii) Adequate nutrition and fluid intake.
    (xiii) Any other task that the HHA may choose to have the home 
health aide perform. The HHA is responsible for training the home 
health aide, as needed, for skills not covered in this basic checklist.
    (2) Conduct of training: Eligible training organizations. A home 
health aide training program may be offered by any organization except 
an HHA that, within the previous 2 years, has been found----
    (i) Out of compliance with the requirements of paragraphs (b) or 
(c) of this section;
    (ii) To permit an individual that does not meet the definition of 
``home health aide'' as specified in paragraph (a) of this section to 
furnish home health aide services (with the exception of licensed 
health professionals and volunteers);
    (iii) Has been subject to an extended (or partial extended) survey 
as a result of having been found to have furnished substandard care (or 
for other reasons at the discretion of HCFA or the State);
    (iv) Has been assessed a civil monetary penalty of not less than 
$5,000 as an intermediate sanction;
    (v) Has been found to have compliance deficiencies that endanger 
the health and safety of the HHA's patients and has had a temporary 
management appointed to oversee the management of the HHA;
    (vi) Has had all or part of its Medicare payments suspended; or
    (vii) Under any Federal or State law
    (A) Has had its participation in the Medicare program terminated;
    (B) Has been assessed a penalty of not less than $5,000 for 
deficiencies in Federal or State standards for HHAs;
    (C) Was subject to a suspension of Medicare payments to which it 
otherwise would have been entitled;
    (D) Had operated under a temporary management that was appointed to 
oversee the operation of the HHA and to ensure the health and safety of 
the HHA's patients; or
    (E) Was closed or had its residents transferred by the State.
    (3) Conduct of training: Qualifications for instructors. The 
training of home health aides must be performed by or under the 
supervision of a registered nurse. Other individuals may be used to 
provide instruction under the general supervision of the registered 
nurse.
    (4) Documentation of training. The HHA must maintain documentation 
of the aide's successful completion of a home health aide training and 
competency evaluation program or competency evaluation program or State 
approved nurse aide training and competency evaluation to demonstrate 
that the requirements of this standard are met.
    (c) Standard: Competency evaluation. An individual may furnish home 
health services on behalf of an HHA only after that individual has 
successfully completed a competency evaluation program as described in 
this section.
    (l) The HHA must ensure that all individuals who furnish home 
health aide services to patients meet the competency evaluation 
requirements of this section. Personal care aides who exclusively 
provide personal care services to Medicaid patients under a State 
Medicaid personal care benefit must meet the requirements specified in 
paragraph (g) of this section.
    (2) The competency evaluation must address each of the subjects 
listed in paragraphs (b)(l)(ii) through (xiii) of this section. Subject 
areas specified under paragraphs (b)(l)(iii), (ix), (x), and (xi) of 
this section must be evaluated by observing the aide's performance of 
the task with a patient. The remaining subject areas may be evaluated 
through written examination, oral examination, or after observation of 
the home health aide with a patient.
    (3) A home health aide competency evaluation program may be offered 
by any organization, except as specified in paragraph (b)(2) of this 
section.
    (4) The competency evaluation must be performed by a registered 
nurse in consultation with other skilled professionals, as appropriate.
    (5) A home health aide is not considered competent in any task for 
which he or she is evaluated as ``unsatisfactory.'' The aide must not 
perform that task without direct supervision by a licensed nurse until 
after he or she received training in the task for which he or she was 
evaluated as ``unsatisfactory'' and passes a subsequent evaluation with 
``satisfactory.''
    (6) The HHA must maintain documentation that demonstrates the 
requirements of this standard are met.
    (d) Standard: Inservice training.
    (l) The home health aide must receive at least l2 hours of 
inservice training in a l2-month period. During the first l2 months of 
employment, hours may be prorated based on the date of hire. The in-
service training may occur while the aide is furnishing care to a 
patient.
    (2) Inservice training may be offered by any organization except 
one that is excluded under paragraph (b)(2) of this section.
    (3) The inservice training must be supervised by a registered 
nurse.
    (e) Standard: Home health aide assignments.

[[Page 11033]]

    (l) The home health aide is assigned to a specific patient by the 
registered nurse. Written patient care instructions for the home health 
aide must be prepared by the registered nurse or other appropriate 
skilled professional (that is, physical therapist, speech language 
pathologist, or occupational therapist) who is responsible for the 
supervision of the home health aide as specified under paragraph (f) of 
this section.
    (2) The home health aide provides services that are ordered by the 
physician in the plan of care and that the aide is permitted to perform 
under State law. The duties of a home health aide include the provision 
of hands-on personal care, performance of simple procedures as an 
extension of therapy or nursing services, assistance in ambulation or 
exercises, and assistance in administering medications that are 
ordinarily self-administered.
    (3) Home health aides must report changes in the patient's medical, 
nursing, rehabilitative, and social needs to the registered nurse or 
other appropriate skilled professional, and complete appropriate 
records in compliance with the HHA policies and procedures.
    (f) Supervision.
    (l) If the patient receives skilled nursing care, the registered 
nurse must perform the supervisory visit required under paragraph 
(f)(2) of this section. If the patient is not receiving skilled nursing 
care, but is receiving another skilled service (that is, physical 
therapy, occupational therapy, or speech-language pathology services), 
supervision may be provided by the appropriate skilled professional. 
Documentation of the supervisory visit must be made in the patient's 
record.
    (2) The registered nurse (or another professional described in 
paragraph (f)(l) of this section) must make an onsite visit to the 
patient's home no less frequently than every 2 weeks.
    (3) If home health aide services are provided to a patient who is 
not receiving skilled nursing care, physical or occupational therapy, 
or speech-language pathology services, the registered nurse must make a 
supervisory visit to the patient's home no less frequently than every 
62 days. In these cases, each supervisory visit must occur while the 
home health aide is providing patient care to ensure that the aide is 
properly caring for the patient.
    (4) If home health aide services are provided by an individual who 
is not employed directly by the HHA, the services of the home health 
aide must be provided under arrangement as defined in section 
l86l(w)(l) of the Act (42 U.S.C. 1395 x(w)). If the HHA chooses to 
provide home health aide services under arrangement with another 
organization, the HHA's responsibilities include, but are not limited 
to--
    (i) Ensuring the overall quality of care provided by the aide;
    (ii) Supervision of the aide's services as described in paragraphs 
(f)(l) and (2) of this section; and
    (iii) Ensuring that home health aides providing services under 
arrangement have met the training or competency evaluation 
requirements, or both, of this condition.
    (g) Standard: Medicaid personal care aide services--Medicaid 
personal care benefit.
    (l) Applicability. This paragraph applies to individuals who are 
employed by HHAs exclusively to furnish personal care attendant 
services under a Medicaid personal care benefit.
    (2) Rule. An individual may furnish personal care services, as 
defined in Sec. 440.170 of this chapter, on behalf of an HHA after the 
individual has been found competent by the State to furnish those 
services for which a competency evaluation is required by this section 
and which the individual is required to perform. The individual need 
not be determined competent in those services listed in this section 
that the individual is not required to furnish.

Subpart C--Organizational Environment


Sec. 484.100  Condition of participation: Compliance with Federal, 
State, and local laws.

    (a) Standard: Compliance with Federal, State, and local laws and 
regulations. The HHA and its staff must operate and furnish services in 
compliance with all Federal, State, and local laws and regulations 
applicable to HHAs. If a State has established licensing requirements 
for HHAs, all HHAs must be approved by the State licensing authority as 
meeting those requirements whether or not they are required to be 
licensed by the State.
    (b) Standard: Disclosure of ownership and management information. 
The HHA must comply with the requirements of part 420, subpart C of 
this chapter. The HHA also must disclose the following information to 
the State survey agency at the time of the HHA's initial request for 
certification, for each survey, and at the time of any change in 
ownership or management:
    (l) The name and address of all persons with an ownership or 
control interest in the HHA as defined in Secs. 420.20l, 420.202, and 
420.206 of this chapter.
    (2) The name and address of each person who is an officer, a 
director, an agent, or a managing employee of the HHA as defined in 
Secs. 420.20l, 420.202, and 420.206 of this chapter.
    (3) The name and address of the corporation, association, or other 
company that is responsible for the management of the HHA, and the name 
and address of the chief executive officer and the chairperson of the 
board of directors of that corporation, association, or other company 
responsible for the management of the HHA.
    (c) Standard: Licensing. The HHA and its branches must be licensed 
in accordance with State licensure laws, if applicable, prior to 
providing Medicare reimbursed services.
    (d) Standard: Laboratory services.
    (l) If the HHA engaged in laboratory testing outside of the context 
of assisting an individual in self-administering a test with an 
appliance that has been cleared for the purpose by the Food and Drug 
Administration, such testing must be in compliance with all applicable 
requirements of part 493 of this chapter.
    (2) If the HHA chooses to refer specimens for laboratory testing to 
another laboratory, the referral laboratory must be certified in the 
appropriate specialties and subspecialties of services in accordance 
with the applicable requirements of part 493 of this chapter.


Sec. 484.105  Condition of participation: Organization and 
administration of services.

    The HHA must organize, manage, and administer its resources to 
attain and maintain the highest practicable functional capacity for 
each patient regarding medical, nursing, and rehabilitative needs as 
indicated by the plan of care.
    (a) Standard: Governing body. A governing body (or designated 
persons so functioning) must assume full legal authority and 
responsibility for the management and provision of all home health 
services, fiscal operations, quality assessment and performance 
improvement, and appoints a qualified administrator who is responsible 
for the day-to-day operation designated persons to carry out these 
functions.
    (b) Standard: Primary HHA. The HHA that accepts the patient becomes 
the primary HHA and assumes responsibility for the interdisciplinary 
coordination and provision of services ordered on the patient's plan of 
care, and continuity of care, whether the services are provided 
directly or under arrangement.

[[Page 11034]]

    (c) Standard: Parent-branch relationship.
    (1) The parent home health agency provides direct support and 
administrative control of its branches.
    (2) The branch office is located sufficiently close to the parent 
home health agency to effectively share administration, supervision, 
and services in a manner that renders it unnecessary for the branch 
separately to meet the conditions of participation as an HHA.
    (d) Standard: Services under arrangement.
    (1) The HHA must ensure that all arranged services provided by 
other entities or individuals meet the requirements of this part and 
the requirements of section 1861(w) of the Act (42 U.S.C. 1395x(w)).
    (2) An HHA that has a written agreement with another agency or 
organization to furnish services to the HHA's patients maintains 
overall responsibility for those services.
    (e) Standard: Services furnished. Part-time or intermittent skilled 
nursing services and at least one other therapeutic service (physical, 
speech, or occupational therapy; medical social services; or home 
health aide services) are made available on a visiting basis, in a 
place of residence used as a patient's home. An HHA must provide at 
least one of the qualifying services directly, but may provide the 
second qualifying service and additional services under arrangement 
with another agency or organization.
    (f) Standard: Physical therapy or speech-language pathology 
services. An HHA that furnishes outpatient physical therapy or speech 
language pathology services must meet all of the applicable conditions 
of this part and the additional health and safety requirements set 
forth in Secs. 485.711, 485.713, 485.715, 485.719. 485.723, and 485.727 
of this chapter.


Sec. 484.110  Condition of participation: Clinical records.

    A clinical record containing past and current findings is 
maintained for every patient who is accepted by the HHA for home health 
service. Information contained in the clinical record must be accurate, 
available to the patient's physician and appropriate HHA staff, and may 
be maintained electronically.
    (a) Standard: Contents of clinical record. The record must include:
    (1) The patient's current comprehensive assessment, clinical/
progress notes, and plan of care;
    (2) Responses to medications, treatments and services;
    (3) A description of measurable outcomes relative to goals in the 
patient's plan of care that have been achieved; and
    (4) A discharge summary that is available to physicians upon 
request.
    (b) Standard: Authentication. All entries must be legible, clear, 
complete, and appropriately authenticated and dated. Authentication 
must include signatures or a secured computer entry by a unique 
identifier of a primary author who has reviewed and approved the entry.
    (c) Standard: Retention of records. Clinical records must be 
retained for 5 years after the month the cost report to which the 
records apply is filed with the intermediary, unless State law 
stipulates a longer period of time. The HHA's internal policies must 
provide for retention of the clinical records even if the HHA 
discontinues operations. If a patient is transferred to another health 
facility, a copy of the records or discharge summary must be sent with 
the patient.
    (d) Standard: Protection of records. Patient information and the 
record must be safeguarded against loss or unauthorized use.


Sec. 484.115  Personnel qualifications for skilled professionals.

    (a) General qualification requirements. Except as specified in 
paragraphs (b) and (c) of this section, all skilled professionals who 
provide services directly by or under arrangements with an HHA must be 
legally authorized (licensed or, if applicable, certified or 
registered) to practice by the State in which he or she performs the 
functions or actions, and must act only within the scope of his or her 
State license or State certification or registration.
    (b) Exception for Federally defined qualifications. The following 
Federally defined qualifications must be met:
    (1) For physicians, the qualifications and conditions as defined in 
section 1861(r) of the Act and implemented at Sec. 410.20 of this 
chapter).
    (2) For speech language pathologists, the qualifications specified 
in section 1861(ll)(1) of the Act.
    (3) For home health aides, the qualifications required by section 
1891(a)(3) of the Act and implemented at Sec. 484.75.
    (c) Exceptions when no State licensing laws or State certification 
or registration requirements exist. If no State licensing laws or State 
certification or registration requirements exist for the profession, 
the following requirements must be met:
    (1) The administrator of a home health agency must--
    (i) Be a licensed physician; or
    (ii) Hold an undergraduate degree and--
    (A) Be a registered nurse; or
    (B) Have education and experience in health service administration, 
with at least one year of supervisory or administrative experience in 
home health care or a related health care program, and in financial 
management.
    (2) An occupational therapist must--
    (i) Be a graduate of an occupational therapy curriculum accredited 
jointly by the Committee on Allied Health Education and Accreditation 
of the American Medical Association and the American Occupational 
Therapy Association; or
    (ii) Be eligible for the National Registration Examination of the 
American Occupational Therapy Association; or
    (iii) Have 2 years of appropriate experience as an occupational 
therapist, and have achieved a satisfactory grade on a proficiency 
examination conducted, approved, or sponsored by the U.S. Public Health 
Service, except that such determinations of proficiency do not apply 
with respect to persons initially licensed by a State or seeking 
initial qualification as an occupational therapist after December 31, 
1977.
    (3) An occupational therapy assistant must--
    (i) Meet the requirements for certification as an occupational 
therapy assistant established by the American Occupational Therapy 
Association; or
    (ii) Have 2 years of appropriate experience as an occupational 
therapy assistant, and have achieved a satisfactory grade on a 
proficiency examination conducted, approved, or sponsored by the U.S. 
Public Health Service, except that such determinations of proficiency 
do not apply with respect to persons initially licensed by a State or 
seeking initial qualification as an occupational therapy assistant 
after December 31, 1977.
    (4) Physical therapist. A person who--
    (i) Has graduated from a physical therapy curriculum approved by--
    (A) The American Physical Therapy Association;
    (B) The Committee on Allied Health Education and Accreditation of 
the American Medical Association; or
    (C) The Council on Medical Education of the American Medical 
Association and the American Physical Therapy Association; or
    (ii) Prior to January 1, 1966--
    (A) Was admitted to membership by the American Physical Therapy 
Association;
    (B) Was admitted to registration by the American Registry of 
Physical Therapist; or
    (C) Has graduated from a physical therapy curriculum in a 4-year 
college

[[Page 11035]]

or university approved by a State department of education; or
    (iii) Has 2 years of appropriate experience as a physical 
therapist, and has achieved a satisfactory grade on a proficiency 
examination conducted, approved, or sponsored by the U.S. Public Health 
Service except that such determinations of proficiency do not apply 
with respect to persons initially licensed by a State or seeking 
qualification as a physical therapist after December 31, 1977; or
    (iv) Was licensed or registered prior to January 1, 1966, and prior 
to January 1, 1970, had 15 years of full-time experience in the 
treatment of illness or injury through the practice of physical therapy 
in which services were rendered under the order and direction of 
attending and referring doctors of medicine or osteopathy; or
    (v) If trained outside the United States--
    (A) Was graduated since 1928 from a physical therapy curriculum 
approved in the country in which the curriculum was located and in 
which there is a member organization of the World Confederation for 
Physical Therapy;
    (B) Meets the requirements for membership in a member organization 
of the World Confederation for Physical Therapy,
    (5) Physical therapist assistant. A person who--
    (i) Has graduated from a 2-year college-level program approved by 
the American Physical Therapy Association; or
    (ii) Has 2 years of appropriate experience as a physical therapy 
assistant, and has achieved a satisfactory grade on a proficiency 
examination conducted, approved, or sponsored by the U.S. Public Health 
Service, except that these determinations of proficiency do not apply 
with respect to persons initially licensed by a State or seeking 
initial qualification as a physical therapy assistant after December 
31, 1977.
    (6) Public health nurse. A registered nurse who has completed a 
baccalaureate degree program approved by the National League for 
Nursing for public health nursing preparation or postregistered nurse 
study that includes content approved by the National League for Nursing 
for public health nursing preparation.
    (7) Registered nurse. A graduate of a school of professional 
nursing.
    (8) Social work assistant. A person who--
    (i) Has a baccalaureate degree in social work, psychology, 
sociology, or other field related to social work, and has had at least 
1 year of social work experience in a health care setting; or
    (ii) Has 2 years of appropriate experience as a social work 
assistant, and has achieved a satisfactory grade on a proficiency 
examination conducted, approved, or sponsored by the U.S. Public Health 
Service, except that these determinations of proficiency do not apply 
with respect to persons initially licensed by a State or seeking 
initial qualification as a social work assistant after December 31, 
1977.
    (9) Social worker. A person who has a master's degree from a school 
of social work accredited by the Council on Social Work Education, and 
has 1 year of social work experience in a health care setting.

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

    Dated: July 15, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
    Dated: August 16, 1996.
Donna E. Shalala,
Secretary.
[FR Doc. 97-5316 Filed 3-5-97; 9:45 am]
BILLING CODE 4120-01-P`