Proposed Rule2024-02137
Medicare Program; Strengthening Oversight of Accrediting Organizations (AOs) and Preventing AO Conflict of Interest, and Related Provisions
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Published
February 15, 2024
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This proposed rule would set forth a number of provisions to strengthen the oversight of accrediting organizations (AOs) by addressing conflicts of interest, establishing consistent standards, processes and definitions, and updating the validation and performance standards systems. Additionally, this proposed rule would revise the psychiatric hospital survey process, add a limitation on terminated deemed providers and suppliers when reentering the program, and provides technical corrections for End-Stage Renal Disease facilities and Kidney Transplant Programs. This proposed rule also solicits comments from stakeholders and AOs to refine and revise the AO oversight standards and processes. In addition, this proposed rule includes a request for information on the timeframes and expectations for the submission of AO applications.
Full Text
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[Federal Register Volume 89, Number 32 (Thursday, February 15, 2024)]
[Proposed Rules]
[Pages 11996-12064]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-02137]
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Vol. 89
Thursday,
No. 32
February 15, 2024
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 488 and 489
Medicare Program; Strengthening Oversight of Accrediting Organizations
(AOs) and Preventing AO Conflict of Interest, and Related Provisions;
Proposed Rule
Federal Register / Vol. 89, No. 32 / Thursday, February 15, 2024 /
Proposed Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 488 and 489
[CMS-3367-P]
RIN 0938-AU88
Medicare Program; Strengthening Oversight of Accrediting
Organizations (AOs) and Preventing AO Conflict of Interest, and Related
Provisions
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would set forth a number of provisions to
strengthen the oversight of accrediting organizations (AOs) by
addressing conflicts of interest, establishing consistent standards,
processes and definitions, and updating the validation and performance
standards systems. Additionally, this proposed rule would revise the
psychiatric hospital survey process, add a limitation on terminated
deemed providers and suppliers when reentering the program, and
provides technical corrections for End-Stage Renal Disease facilities
and Kidney Transplant Programs. This proposed rule also solicits
comments from stakeholders and AOs to refine and revise the AO
oversight standards and processes. In addition, this proposed rule
includes a request for information on the timeframes and expectations
for the submission of AO applications.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on April 15, 2024.
ADDRESSES: In commenting, refer to file code CMS-3367-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-3367-P, P.O. Box 8010,
Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-3367-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Caroline Gallaher, (410) 786-8705 or
Beth Chalick-Kaplan, (410) 786-6550.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the search instructions on that website to
view public comments. CMS will not post on <a href="http://Regulations.gov">Regulations.gov</a> public
comments that make threats to individuals or institutions or suggest
that the commenter will take actions to harm an individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this rule may be found at <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>.
Severability of Provisions
To the extent a court may enjoin any part of the rule as finalized,
the Department intends that other provisions or parts of provisions
should remain in effect. Any provision of the rule as finalized held to
be invalid or unenforceable by its terms, or as applied to any person
or circumstance, shall be construed so as to continue to give maximum
effect to the provision permitted by law, unless such holding shall be
one of utter invalidity or unenforceability, in which event the
provision shall be severable from this section and shall not affect the
remainder thereof or the application of the provision to persons not
similarly situated or to dissimilar circumstances.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
II. Background
A. Legislative History
B. Regulatory Overview of CMS's Rules Regarding AO Programs
C. Congressional Report on the Oversight of National AOs and CMS
Approved Accreditation Programs
D. CMS Validation Survey Pilot
E. Overview of Transparency and Oversight of Accrediting
Organizations
F. Prior Rulemaking--Accrediting Organizations Conflict of
Interest Request for Information (RFI)
G. Conflict of Interest--The AO Owner's, Surveyor's and Other
Employee's Interest in or Relationship With a Health Care Facility
That the AO Accredits
III. Request for Public Comment on Whether It Is a Conflict of
Interest for AO Board Members or Advisors To Have an Interest in or
Relationship With a Health Care Facility That the AO Accredits
IV. Provisions of the Proposed Rule
A. Proposal To Add Definition of ``Unannounced Surveys'' to
Sec. 488.1
B. Conflict of Interest
C. Proposal To Require the AOs That Accredit Medicare-Certified
Providers and Suppliers To Use the Medicare Conditions; and
Strengthened Survey Process Comparability (Proposed Sec.
488.4(a)(1) and (2))
D. Proposal To Revise the AO Crosswalk Requirements at Sec.
488.5(a)(3)
E. Proposal To Strengthen the Comparability of the Survey
Process Between the AOs and the States
F. Proposal To Revise the AO Application Documentation
Requirements Related to the Survey Processes (Sec. 488.5(a)(4);
Sec. 488.5(a)(4)(iii); Sec. 488.5(a)(4)(v); Sec.
488.5(a)(4)(vii); Sec. 488.5(a)(4)(xi); Sec. 488.5(a)(5); Sec.
488.5(a)(6); Sec. 488.5(a)(12); Sec. 488.5(a)(13))
G. Proposal To Require AOs To Provide CMS With Survey Findings
(Sec. 488.5(a)(4)(viii))
H. Proposal To Require That AO Surveyors Must Take the CMS
Online Surveyor Basic Training
(Sec. 488.5(a)(8)(ii)
I. Proposal To Establish Criteria for ``National in Scope'' to
Sec. 488.1
J. Proposal To Revise the Definition of ``Rate of Disparity''
and To Use the Process and Outcome Disparity Rates as Performance
Measures (Sec. 488.1)
K. Proposal To Require AOs To Submit a Publicly Reportable Plan
of Correction for Unacceptable Performance Measure Scores (Sec.
488.8(a)(2))
L. Proposal To Revise the AO Survey Validation Program (Sec.
489.9)
M. Proposal To Revise the Psychiatric Hospital Survey Process
N. Limitation on Terminated Deemed Providers/Suppliers Seeking
Re-Entry Into Medicare/Medicaid (Sec. 489.57, Sec. 488.4(b) &
Sec. 488.5(a)(21))
O. Proposal for Technical Correction for End-Stage Renal Disease
(ESRD) Facilities and Kidney Transplant Programs (Sec. 488.4(a)(4))
V. Request for Information Regarding Timeframes and Expectation for
the Submission of AO Applications
VI. Collection of Information Requirements
[[Page 11997]]
A. ICR Related to Conflict of Interest Proposals
B. ICRs Associated With the Requirement That AOs Incorporate the
Medicare Conditions
C. ICRs Associated With the Requirement That AOs Use Survey
Processes That Are Comparable to That Used by CMS and the SAs
D. ICR Related to Requirement That the AO Surveyors Take the CMS
Online Surveyor Training
E. ICR Associated With the Establishment of a Definition for
``National in Scope''
F. ICR Associated With the Proposed Revision of the AO
Performance Measures and To Require a Publically Reportable Plan of
Correction
G. ICR Associated With the Revision of the Definition of
``Disparity Rate
H. Burden Reduction Associated With the Revision of the AO
Validation Program
I. ICR Associated With the Revision of the Psychiatric Hospital
Accreditation Process
J. Burden Associated With Limitations to Terminated Deemed
Providers Seeking Re-Enrollment and Certification in Medicare/
Medicaid Programs
K. Summary of Estimated Burden
VII. Response to Comments
VIII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Detailed Economic Analysis
D. Alternatives Considered
E. Regulatory Flexibility Act (RFA)
F. Unfunded Mandates Reform Act (UMRA)
G. Federalism
Regulations Text
I. Executive Summary
A. Purpose
The Centers for Medicare & Medicaid Services (CMS) seeks to protect
the health and safety of patients that receive services from Medicare
and Medicaid-participating providers that are accredited by CMS-
approved accrediting organizations (AOs). We continue to review and
revise our health and safety requirements and survey processes to
ensure that they are effective in driving quality of care for
beneficiaries receiving services from these accredited providers and
suppliers.
In 2015, we published a final rule in the Federal Register
entitled, ``Medicare and Medicaid Programs: Revisions to Deeming
Authority Survey, Certification, and Enforcement Procedures'' (80 FR
29795), hereinafter referred to as the ``2015 AO final rule'' to
clarify and strengthen the oversight of AOs, specifically to provide
additional criteria for AOs that apply for, and are granted,
recognition and approval of an accreditation program (see section II
``Background'' of this proposed rule for additional background
information). Over the past 5 years, CMS has continued to evaluate the
effectiveness of these regulatory changes and the performance of AOs.
This proposed rule proposes multiple provisions to further strengthen
our oversight and enforcement capabilities of the AOs. The need for
these provisions is based on multiple factors, which include: (1)
direct observation and review of the AOs' accreditation programs for
those AOs with CMS-approved deeming programs; (2) media reports and
complaints against facilities that are deemed; (3) the CMS validation
program and analysis of disparity rates between state survey agency
(SAs) and the AOs; and (4) our performance evaluations of AOs. The
preamble discusses each of the proposed provisions (see section IV
``Provisions of the Proposed Rule'') in this proposed rule. More
specifically, the preamble provides background and analysis of why CMS
is proposing additional provisions and revisions to existing
requirements. CMS is responsible for the oversight of the national AOs'
Medicare accreditation programs, and for ensuring that providers or
suppliers under CMS-approved deeming programs by the AOs meet the
minimum quality and patient safety standards required by the Medicare
conditions (refer to section II of this proposed rule for additional
information). Based on several years' experience and data analysis, we
are proposing the following provisions as described in the preamble to
strengthen our oversight of AOs.
B. Summary of the Major Provisions
<bullet> We propose at Sec. 488.1 to add the definitions of
``geographic regions'', ``national in scope,'' ``outcome disparity
rate,'' ``process disparity rate,'' and ``unannounced survey''. In
addition, we propose to revise the definition of ``national accrediting
organization,'' and remove the definition of ``rate of disparity.''
<bullet> We propose to establish a new requirement at Sec.
488.4(a)(1) that would require the AOs that accredit Medicare-certified
providers and suppliers to incorporate the language of the applicable
Medicare Conditions of Participation (CoPs), Conditions for Coverage
(CfCs), conditions for certification, or requirements (collectively
referred to as ``Medicare conditions'') set forth in the applicable CMS
regulations for each provider and supplier type as their minimum
accreditation requirements. However, the AOs would be free to establish
additional accreditation requirements that exceed Medicare conditions,
as permitted by section 1865(a)(1) of the Social Security Act (the
Act).
<bullet> We propose to add language at Sec. 488.4(a)(2) regarding
use of a comparable survey process approved by CMS, as outlined and
contemplated in Sec. 488.5.
<bullet> We propose to add a new regulation at Sec. 488.4(b) that
would state that if Medicare terminates the participation agreement of
a Medicare-certified provider or supplier, then CMS would no longer
recognize the facility's AO accreditation for deemed compliance. At
proposed Sec. 488.4(b)(2), we would require a terminated provider or
supplier to meet all requirements set forth at Sec. 489.57 before
their new agreement for participation in the Medicare/Medicaid program
can be approved.
<bullet> We propose to require AOs to develop a crosswalk between
their accreditation standards and the Medicare conditions, at proposed
Sec. 488.5(a)(3).
<bullet> We propose to revise the existing language at Sec.
488.4(a)(4) to strengthen our process of evaluating the comparability
of survey processes of AOs that accredit Medicare-certified providers
and suppliers with the SAs' survey processes.
<bullet> We propose to strengthen the requirements at Sec.
488.5(a)(4), Sec. 488.5(a)(4)(iii), Sec. 488.5(a)(4)(v), Sec.
488.5(a)(4)(vii), Sec. 488.5(a)(4)(xi), Sec. 488.5(a)(5) and Sec.
488.5(a)(6) related to the comparability of survey processes as
mentioned above. We also propose changes under Sec. 488.5(a)(5)(viii)
related to survey reports. These strengthened requirements would be
applicable to their initial and renewal applications provided to CMS
one year after the effective date of the rule.
<bullet> We propose at Sec. 488.5(a)(8)(i) through Sec.
488.5(a)(8)(iv) to require AOs that accredit Medicare-certified
providers and suppliers have their surveyors complete the CMS online
surveyor training.
<bullet> We propose to add a requirement at Sec. 488.5(a)(10) that
the AOs must provide, as part of their initial and renewal
applications, specific policies and procedures that would address how
the AOs prevent and address conflicts of interest. We propose that AOs
provide information on a number of specific policies and procedures.
<bullet> We propose to also revise requirements under Sec.
488.5(a)(12) related to the AO procedures for investigating and
responding to complaints against accredited facilities.
<bullet> We propose revisions to Sec. 488.5(a)(13) related to the
AO's accreditation status decision-making
[[Page 11998]]
process, in order to strengthen the comparability of the survey
processes.
<bullet> We propose to add a new requirement at Sec. 488.5(a)(21)
that would require the AOs to submit a statement with its initial or
renewal application certifying that, in response to a written notice
from CMS notifying the AO that one of its accredited providers or
suppliers has been involuntarily terminated from the Medicare/Medicaid
program, the AO agrees to terminate or revoke its accreditation of the
terminated provider or supplier within 5-business days from receipt of
said written notice.
<bullet> We propose at Sec. 488.5(a)(22) to require the AOs to
submit a declaration from each surveyor disclosing any interests or
relationships the surveyor may have in or with another survey agency or
health care facility the AO accredits (as defined in Sec.
488.5(a)(10)).
<bullet> We propose at Sec. 488.8(a)(2) to expand the types of
validation activities included in the performance review.
<bullet> We propose at Sec. 488.8(a)(4) to require AOs to submit a
plan of correction that would be subject to a public reporting
requirement, when the AO's performance on survey activities identify
disparity concerns, either through the outcome disparity rates or
process disparity rates.
<bullet> We propose at new subsection Sec. 488.8(i) to place
restrictions on the fee-based consulting services provided by AOs to
the health care providers and suppliers they accredit. At Sec.
488.8(i)(1), we propose that an accrediting organization or its
associated fee-based consulting division or company may not provide
fee-based consulting services to any health care provider or supplier
prior to an initial accreditation survey. At Sec. 488.5(i)(2), we
propose to prohibit AOs from providing fee-based consulting services to
health care providers and suppliers they accredit within 12 months
prior to the next scheduled re-accreditation survey of that provider or
supplier. At Sec. 488.5(i)(3), we propose that AOs may not provide
fee-based consulting services to a health care provider or supplier in
response to a complaint received by the AO regarding that provider or
supplier.
<bullet> At Sec. 488.8(i)(4), we set forth circumstances in which
the restrictions to the provision of AO fee-based consulting services
would not apply.
<bullet> We propose at Sec. 488.8(i)(5) to require AOs to provide
specific information to CMS on a bi-annual basis about the fee-based
consulting services they provide.
<bullet> We propose at Sec. 488.8(i)(6) to impose penalties on AOs
for the provision of prohibited fee-based consulting services.
<bullet> We propose at Sec. 488.8(k) that when an AO owner,
surveyor, or other employee, currently or within the previous 2 years,
has an interest in or relationship with a health care facility that the
AO accredits, the AO would be required to take steps to prevent the
surveyor from having any involvement with the survey of that facility,
having input into the results of the survey and accreditation for that
facility; having involvement with the pre and post survey activities
for that facility; or having contact with or access to the records for
the survey of that health care facility.
<bullet> We propose at Sec. 488.9(b) to revise the types of
validation programs by adding a new type of validation survey to be
conducted by SA or CMS surveyors.
<bullet> We propose a new paragraph (z) at Sec. 489.20 to require
as a basic commitment of the provider if they are terminated and then
seek a new provider agreement, they would follow the terms of proposed
new Sec. 489.57(b) noted below.
<bullet> We propose to add a new paragraph (b) at Sec. 489.57, to
require that Medicare-certified providers or suppliers that have been
involuntarily terminated from the Medicare and/or Medicaid program must
meet several requirements before their new agreement for Medicare
participation will be approved. Proposed Sec. 489.57(b)(1) would
require the terminated provider or supplier to be under the oversight
of the SA for a reasonable assurance period for a length of time to be
determined by CMS for the purpose of demonstrating compliance with the
Medicare conditions. Proposed Sec. 489.57(b)(2) would require the
provider or supplier to remain under the exclusive oversight of the SA
until the SA has certified and/or CMS has determined its full
compliance with all Medicare conditions and the new agreement for
participation in the Medicare/Medicaid program has been approved.
Proposed Sec. 489.57(b)(3) would require that during the time period
in which a provider or supplier is terminated from the Medicare
program, is under the oversight of the SA, and during the time the new
agreement for Medicare participation is pending, CMS will not accept or
recognize deeming accreditation from a CMS-approved accrediting
organization.
<bullet> We also propose to remove the reference at Sec.
488.4(a)(4) that currently excludes ESRD facilities from the
opportunity for accreditation, to reflect a change included in the
Bipartisan Budget Act of 2018 (Pub. L. 115-123). Consistent with this
same provision, we also propose to remove the reference restricting
transplant programs from an accreditation option.
<bullet> We are soliciting comments on whether CMS should limit the
number of times an AO can submit an incomplete initial application for
a new accreditation program. We seek comment on this question because
we recently received several incomplete applications which required
multiple pass backs due to the applicant's failure to provide
information about issues, such as their financial viability, survey
processes which appeared not to be operationalized, or similar
concerns.
II. Background
A. Legislative History
To participate in the Medicare program, providers and suppliers of
health care services must, among other things, be in substantial
compliance with the applicable statutory requirements of the Social
Security Act (the Act), as well as CMS' regulatory requirements related
to the health and safety of patients. These health and safety
requirements are generally called Conditions of Participation (CoPs)
for most providers; Requirements for Participation for skilled nursing
facilities (SNFs) and Medicaid Nursing Facilities (NFs) (collectively,
long-term care facilities); and Conditions for Coverage or Conditions
for Certification (CfCs) for Ambulatory Surgical Centers (ASCs), Rural
Health Clinics (RHCs), Federally Qualified Health Centers (FQHCs),
dialysis facilities (or End-Stage Renal Disease [ESRD] facilities), and
some types of suppliers (collectively referred herein as Medicare
conditions). A Medicare-certified provider or supplier that does not
comply with the Medicare conditions risks having its Medicare provider
or supplier agreement terminated. Medicaid service providers or
suppliers that are required by CMS or the State to have Medicare
approval would also be affected.
In accordance with section 1864 of the Act, the SAs or other
appropriate local agencies, under an agreement with the Secretary of
the Department of Health and Human Services (the Secretary), perform
surveys of health care providers and suppliers to assess their
compliance with the applicable Medicare conditions for the purpose of
certification for participation in the Medicare/Medicaid program. There
are several types of surveys conducted, including initial
certification, recertification, and complaint surveys. The SAs and CMS
also perform surveys
[[Page 11999]]
in certain circumstances for the providers and suppliers that are
accredited by an AO and deemed to meet Medicare requirements. For
example, the SA performs complaint surveys for health care providers
that are accredited by an AO, if the complaint was received by the SA
directly. The SA also performs surveys of AO-accredited health care
providers that have had their participation in the Medicare program
terminated, that wish to be surveyed by the SA instead of an AO, and
for the purpose of validation of the results of an AO's surveys. Rules,
regulations, and guidance for the certification process performed by
the Sas are discussed in the CMS State Operations Manual (SOM) \1\ or
communicated via Quality, Safety & Oversight (QSO) policy
memorandums.\2\
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\1\ CMS Internet Only Manual, Pub. 100-07, available at <a href="https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS1201984">https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS1201984</a>.
\2\ <a href="https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Policy-and-Memos-to-States-and-Regions">https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Policy-and-Memos-to-States-and-Regions</a>.
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Some provider types may only be surveyed by the SA and cannot use
AOs while others cannot be surveyed by SAs pursuant to statute but can
only be accredited by a CMS-approved AO. We refer readers to section
IV, ``Provisions of this Proposed Rule'' for additional information.
Based on the SA's certification of a provider's compliance or
noncompliance and recommendation, CMS determines whether the provider
or supplier qualifies, or continues to qualify, for participation in
the Medicare program. Additionally, section 1865(a) of the Act allows
most health care facilities to demonstrate their compliance with the
Medicare conditions through accreditation by a CMS-approved program of
an AO, in lieu of being surveyed by SAs for certification. This is
referred to as ``deeming'' accreditation. This is because CMS-approved
AOs are recognized by the Secretary as having accreditation programs
with accreditation standards that meet or exceed those of Medicare.
Therefore, any provider or supplier that is accredited by an AO under a
CMS approved accreditation program is deemed by CMS to have also
complied with the applicable Medicare conditions or requirements. The
AOs perform initial, re-accreditation, follow-up, and certain complaint
surveys.
In December, 2020, Division CC, section 407 of the Consolidated
Appropriations Act of 2021 (CAA 2021), amended Part A of Title XVIII of
Act to add a new section 1822 to the Act, and amended sections 1864(a)
and 1865(b) of the Act, establishing new hospice program survey and
enforcement requirements. CMS issued implementing regulations for SAs
and AOs in the CY 2022 Home Health Prospective Payment System Rate
Update (HH PPS) final rule (86 FR 62240). The HH PPS rule finalized
changes to increase and improve transparency, oversight, and
enforcement for hospice programs under SA and AO oversight.
Additionally, the HH PPS final rule in part requires hospice programs
to measure and reduce inconsistency in the application of survey
results among all surveyors. The HH PPS final rule requires: (1) AOs
with CMS-approved hospice programs to use the same survey deficiency
reports as the SAs (Form CMS-2567, ``Statement of Deficiencies'' or a
successor form) to report survey findings; (2) comprehensive training
and testing of SA and AO hospice program surveyors; and (3) prohibits
SA and AO surveyors from surveying hospice programs for which they have
worked in the last 2 years from which they would have a perceived or
actual conflict of interest.
CMS is responsible for: (1) providing ongoing oversight of the AOs'
accreditation programs to ensure that providers or suppliers accredited
by the AOs meet the required Medicare conditions; (2) ensuring that the
AOs have formalized procedures to determine whether the health care
facilities deemed under their accreditation programs meet the AO's
accreditation standards (which must meet or exceed the applicable
Medicare program requirements); and (3) ensuring that the AO's
accreditation standards and practices for surveying providers and
suppliers meet or exceed the Medicare conditions and practices for
granting approval.
For some provider and supplier types, accreditation is voluntary
and seeking deemed status through an accreditation organization is an
option, not a requirement for these Medicare-certified providers and
suppliers. A provider or supplier has the choice to seek deeming status
and accreditation from an AO with a CMS-approved program or
certification through the SA survey process. A nationally-recognized AO
may have accreditation services which are not specifically related to
Medicare-participation or Medicare conditions and an AO may offer
accreditation services to a provider or supplier which Medicare does
not recognize for deeming status, such as long-term care facilities.
The AO may also provide accreditation with a deeming option, which is
that their deemed program is recognized and approved by CMS to meet or
exceed the Medicare program requirements. We refer readers to section
IV.C ``Proposal to Require the AOs that Accredit Medicare-Certified
Providers and Suppliers to Use Medicare Conditions; and Strengthened
Survey Process Comparability'' of this proposed rule for additional
context.
AOs typically charge health care facilities a fee for the
accreditation services they provide. AOs generally offer at least two
accreditation options, which include non-CMS approved accreditation,
and accreditation for the purpose of participating in the Medicare
program. By ``non-CMS approved accreditation'' we mean accreditation
that is offered by the AOs with an accreditation program that is not
approved by Medicare and which is not used for Medicare purposes. Such
accreditation could be used for individual State accreditation purposes
or additional professional accreditations that a provider or supplier
seeks for business purposes, such as the Joint Commission's (TJC's)
Nursing Care Center accreditation for skilled nursing facilities, which
is not recognized by CMS as an option for deemed status.
This proposed rule would apply only to the AOs with CMS-approved
programs that accredit Medicare-certified providers and suppliers and
those entities they accredit. The provisions of this proposed rule
would not apply to the following parties: (1) health care providers and
suppliers that are not accredited by AOs, such as but not limited to,
nursing homes and comprehensive outpatient rehabilitation facilities
(CORFs); (2) health care providers and suppliers that are certified by
the SAs, such as those who elect not to be deemed through an AO; (3)
AOs that accredit non-certified suppliers; (4) non-certified suppliers;
and (5) AOs that accredit laboratories (under the Clinical Laboratory
Improvement Amendments of 1988 (CLIA)).
B. Regulatory Overview of CMS's Rules Regarding AO Programs
The current regulations at 42 CFR 488.4 set forth the general
provisions for CMS approved accreditation programs for Medicare-
certified providers and suppliers. Section 488.5 sets out application
and re-application procedures for national AOs that seek to obtain CMS
approval of their accreditation programs, often called ``deeming
authority.''
The AO application and re-application procedures set forth at Sec.
488.5 for Medicare-certified providers and suppliers task CMS with the
[[Page 12000]]
responsibilities of approval and oversight of the AOs' accreditation
programs while ensuring that the accredited providers and suppliers
meet or exceed the Medicare conditions.
CMS conducts a thorough review of each accreditation program
application that is submitted by an AO for CMS approval. This review
establishes the ``comparability'' of the AOs accreditation standards
with Medicare, to determine whether the AO's standards meet or exceed
the Medicare conditions. The application review process also includes a
review of the AO's survey processes and procedures, the AO's surveyor
training, and their policies and procedures for the oversight and
enforcement of provider or supplier entities they accredit. The
application review team also reviews the qualifications of the AO
surveyor staff. In addition, CMS reviews the AO's financial status, to
determine their solvency and potential for longevity of operations.
Section 488.5(e)(1) requires that we publish a notice in the
Federal Register when we receive a complete initial or renewal
application from a national AO seeking CMS approval of its
accreditation program. The Federal Register notice identifies the
organization and the type of providers or suppliers to be covered by
the accreditation program and provides a 30-day public comment period.
CMS has 210 days from the receipt of a complete application to publish
notice of approval or denial of the application. Upon approval, any
provider or supplier subsequently accredited by the AO's approved
program would be deemed by CMS to have met the applicable Medicare
conditions and would be referred to as having ``deemed status.''
C. Congressional Report on the Oversight of National AOs and CMS
Approved Accreditation Programs
We are required by section 1875(b) of the Act to submit an annual
Report to Congress \3\ on CMS' oversight of national AOs and their CMS-
approved accreditation programs. This report contains information
related to the AOs' activities in a fiscal year (FY) and provides a
comparison of these activities to the activities of previous years.
Within this report, we also measure the ``disparity rate,'' which is a
comparison rate based on AO findings of non-compliance during an
accreditation survey and the SA findings of non-compliance for the same
facilities found during a look-back validation survey.
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\3\ The most recent Report to Congress may be accessed at:
<a href="https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf">https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf</a>.
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There are three levels of adverse findings on a SA survey, which
include immediate jeopardy (IJ), condition-level and standard-level
deficiencies. Sections 488.1 and 489.3 define immediate jeopardy as a
situation in which the provider's or supplier's non-compliance with one
or more of Medicare requirements, conditions of participation,
conditions of coverage or certification ``has caused or is likely to
cause, serious injury, harm, impairment, or death to a resident or
patient.'' When investigating a potential immediate jeopardy situation,
surveyors must find that there is non-compliance by the provider or
supplier, that serious harm has occurred or is likely to occur, and
that immediate action needs to be taken by the provider/supplier. (See
Appendix Q of the SOM for additional guidance.) A condition-level
deficiency means that for that particular Medicare condition of
participation, also known as a CoP, the facility's noncompliance is
such that it substantially limits the provider or supplier's capacity
to furnish adequate care or which adversely affects the health and
safety of patients (Sec. 488.24). There can be noncompliance with a
Medicare condition at a regulatory standard level that does not rise to
the level of noncompliance with the condition. For example, a hospital
may fail to have written policies and procedures regarding the
evacuation of patients during an emergency (as required at Sec.
482.15(b)(3)) but complies with the remaining standards set forth at
Sec. 482.15 (a) through (f) such as having policies and procedures for
alternate source power, provisions, tracking of patients and staff and
has a communication plan and training and testing program. In this
situation, the hospital generally would not be cited at a condition-
level deficiency for the entire Emergency Preparedness Medicare
condition (at Sec. 482.15). The manner and degree of the noncompliance
is considered to determine whether there is substantial compliance or
not. A standard-level deficiency means that the provider may be out of
compliance with one or more aspects of a regulatory condition or
requirement, but is considered less severe than a condition-level
deficiency. A condition-level deficiency, however, is considered more
serious in nature and could lead to a facility being terminated from
the Medicare and Medicaid programs for non-compliance. Immediate
jeopardy citations are condition-level deficiencies that pose immediate
jeopardy to patient health and safety.
On a validation survey, when the SA cites a condition-level
deficiency for which the AO has not cited a comparable deficiency, the
deficiency is considered by CMS to have been missed by the AO and is a
factor in determining the AO's ``disparity rate'' for each facility
type. The identification of one missed condition-level deficiency by
the AO results in the entire survey being counted toward the disparity
rate. The number of disparate surveys is divided by the total number of
validation surveys performed with respect to that AO by various States'
SAs, in order to determine the AO's disparity rate.
According to the most recent report, the FY 2020 Report to
Congress,\4\ disparity rates for all CMS approved AO programs for the
following facility types for the most recent year in the report (FY
2019) are: Hospitals (42 percent); Psychiatric hospitals (45 percent);
Critical Access Hospitals (46 percent); Home Health Agencies (8
percent); Hospices (19 percent) and Ambulatory Surgical Centers (34
percent). From FY 2018 to FY 2019, hospitals, HHAs and ASCs had the
only decreases in disparity rates, with a decrease of 5-percentage
points, 11-percentage points, and 7-percentage points, respectively.
The disparity rates for psychiatric hospitals increased by seven
percentage points from FY 2018 to FY 2019. The disparity rates for CAHs
and hospices increased by five percentage points and three percentage
points respectively from FY 2018 to FY 2019. The findings and other
information are consistent with previous reports, and no notable
changes were observed in the FY 2020 RTC covering the FY 2019 period of
activities.
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\4\ <a href="https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/QSO-19-17-AO-CLIA.pdf">https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/QSO-19-17-AO-CLIA.pdf</a>.
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D. CMS Validation Survey Pilot
As part of our ongoing efforts to enhance transparency and our
oversight of the AOs, in 2018, CMS began a pilot for integrated
validation surveys for accredited hospitals, known as the Validation
Redesign Program (VRP) pilot. In a VRP pilot survey, the SA teams
accompany the AO survey teams on a reaccreditation survey for an
accredited facility for the purpose of evaluating the AO surveyors'
competency at performing surveys and overall effectiveness during the
survey process. The initial findings of the VRP pilot will be discussed
further later in this preamble at sections IV.J and IV.L.3. CMS plans
to continue to refine the
[[Page 12001]]
validation process over the next several years in an effort to enhance
AO oversight, and verify that providers/suppliers under deemed status
are in compliance with the Medicare conditions, and focus surveys on
key quality concerns while reducing provider burden.
A national AO seeking approval of its accreditation programs in
accordance with section 1865(a) of the Act must apply for and be
approved by CMS for a period not to exceed 6 years. (See Sec.
488.5(e)(2)(i)). An AO must submit a renewal application seeking re-
approval of its accreditation program(s) before the expiration date of
its current CMS approval. Review of the AO's renewal application in a
timely manner allows CMS to ensure that there would not be a lapse in
accreditation for the providers and suppliers accredited by the AO.
Requiring the AO to submit a renewal application periodically allows
CMS to ensure that the accreditation provided by the AO continues to
ensure that the providers or suppliers accredited by that AO meet or
exceed the Medicare conditions.
E. Overview of Transparency and Oversight of Accrediting Organizations
In September 2017, an article in the Wall Street Journal \5\ raised
concerns regarding the performance and transparency of AO surveys, and
noted potential conflicts of interest between an AO's accreditation
services and its consulting services. As a result of this article, CMS
initiated an investigation into these allegations.
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\5\ The Wall Street Journal, ``Watchdog Awards Hospitals Seal of
Approval Even After Problems Emerge'' Stephanie Armour (September 8,
2017) <a href="https://www.wsj.com/articles/watchdog-awards-hospitals-seal-of-approval-even-after-problems-emerge-1504889146">https://www.wsj.com/articles/watchdog-awards-hospitals-seal-of-approval-even-after-problems-emerge-1504889146</a>.
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F. Prior Rulemaking--Accrediting Organizations Conflict of Interest
Request for Information (RFI)
CMS is aware, from the information submitted with their
applications, that some AOs with CMS-approved accreditation programs
are also providing fee-based consultative services to Medicare-
participating health care facilities. Our understanding is that typical
AO fee-based consultative services include, but are not limited to the
following:
<bullet> Assistance for clinical and non-clinical leaders
(including administrators) in understanding the AO and Medicare
conditions for compliance;
<bullet> Review of facility standards and promised early
intervention and action through simulation of a real survey, such as a
mock survey with comprehensive written reports of findings;
<bullet> Review of a facility's processes, policies and functions;
<bullet> Identification of and technical assistance for changing
and sustaining areas in need of improvement; and,
<bullet> Educational consultative services.
CMS acknowledges that independent fee-based consulting is a
valuable resource that can help providers and suppliers improve the
quality and safety of the care they provide. This does not mean that
the providers or suppliers who elect not to receive fee-based
consulting from an AO that offers it, or that providers or suppliers
that are accredited by an AO that does not offer this service would not
provide safe, quality care.
There are many third-party consultants that offer fee-based
consulting across all provider and supplier types. The availability of
third-party fee-based consultants give providers and suppliers access
to this educational service, if their AO does not provide fee-based
consulting. If a provider's/supplier's AO already offers fee-based
consulting, third-party consultants can offer such providers and
suppliers, with an alternative, allowing providers and suppliers to
compare the effectiveness and quality of consultants to address their
needs within their cost limitations. The provider or supplier may also
be able to negotiate a price for educational services provided by a
third-party consultant, while this may not be an option with the AOs
that offer fee-based consulting. It is important to note there would be
no conflict of interest associated with the use of third-party fee-
based consultants because these consultants do not also make compliance
determinations about the provider or supplier.
Fee-based consulting services are not prohibited by law or
regulation. However, CMS is concerned that an AO's provision of such
fee-based consulting results in perceived or actual conflicts of
interests because of the contractual and financial relationship that
exists between the health care provider and the AO, which is a private
entity that profits from the performance of the inherently governmental
function of regulating health care providers through accreditation.
Because of this, on December 20, 2018, we published a Request for
Information (RFI) in the Federal Register entitled, ``Medicare Program:
Accrediting Organizations Conflict of Interest and Consulting Services;
Request for Information'' (83 FR 65331) hereinafter referred to as
``2018 AO Conflict of Interest RFI'', in response to increasing concern
about potential conflicts of interest created by the accreditation and
consultative activities of the AOs. Specifically, we solicited public
comments to determine whether offering consultative services to the
same entities an AO accredits may create actual or perceived conflicts
of interest between an AO's accreditation program and its consultative
program. We stated that this dual function may undermine, or appear to
undermine, the integrity of the accreditation programs and could erode
public trust in the safety of providers and suppliers that have been
accredited by CMS-approved AOs. We further acknowledged that certain
consulting services offered by some of the AOs, such as quality
improvement work and training of facility staff, may be beneficial to
some facilities and result in improvements in operations or the quality
of care furnished and may be provided with the best of intentions. We
stated that circumstances could arise where an AO has recommended a
facility for deemed status through their accreditation service, while
the consultancy service of the AO was generating revenue assisting the
same facility in passing the AO's own accreditation surveys. Some AOs
have indicated that they establish firewalls between the arms of their
businesses, but we stated that these firewalls may not be sufficient to
ensure that no conflicts of interest result from these activities.
We further stated that, similar to quality improvement organization
(QIO) and external quality review organization (EQRO) programs, any AO
with a Medicare-approved accreditation program has assumed a position
of public trust and is responsible for acting on behalf of the public,
because the AO is performing a function that assists in the federal
government's enforcement programs. We also expressed our view that AOs
voluntarily take on this position and responsibility when they seek
accreditation approval from CMS to accredit providers and suppliers for
participation in Medicare. Because of the responsibility to maintain
public trust and public health, we continually ensure that all entities
and programs, including AOs and their accreditation programs that
require CMS approval, be held to high standards of ethical conduct so
that everyone can have complete confidence in the integrity of federal
government certification. We stated that the AOs' decisions to accredit
facilities must be made without regard to any additional services that
a Medicare provider or supplier might
[[Page 12002]]
obtain through the AO or its subsidiaries. We stated that this policy
would ensure and maintain public trust in the Medicare certification
program.
In the 2018 AO Conflict of Interest RFI, we solicited public
comments to gather information for potential future rulemaking and to
obtain insight on mechanisms to address this potential conflict of
interest. We were specifically interested in ways to potentially modify
Sec. 488.5(a), which sets out the required information to be submitted
with an AO's application. For example, Sec. 488.5(a)(10) states that
the application information from the AO include the organization's
policies and procedures to avoid conflicts of interest, including the
appearance of conflicts of interest, involving individuals who conduct
surveys or participate in accreditation decisions.
We stated that potentially expanding Sec. 488.5(a)(10) by adding
provisions that would require the AOs to disclose information about any
consultative services they offer to facilities could further enhance
our oversight of AOs.
In addition, we solicited comments on the following issues:
<bullet> With respect to fee-based consultative services provided
by AOs to the facilities they accredit--
++ How are these services provided and communicated to the
facilities?
++ Are potential conflicts of interest disclosed?
<bullet> Are there other entities that could provide this training
besides the AOs?
<bullet> Whether commenters perceive a conflict of interest in AOs
providing fee-based consultative services to the facilities they
accredit.
<bullet> Whether the ability of an AO to collect fees for
consultation services from entities they accredit could degrade the
public trust inherent in an AO's CMS approved accreditation programs.
<bullet> What the appropriate consequences or impacts should be, if
a conflict does exist.
<bullet> What firewalls may exist within an AO between
accreditation and consultation services, or what firewalls would be
prudent, to avoid potential and actual conflicts of interest.
<bullet> Examples of positive and negative effects which may be as
a result of a conflict of interest.
<bullet> What the potential impact, financially and overall would
be if CMS were to finalize rulemaking which would restrict certain
activities that might give rise to a real or perceived conflict of
interest.
<bullet> When and/or under what circumstances it would be
appropriate for AOs to provide fee-based consultative services to the
facilities which they accredit.
<bullet> Whether, and if so, under what specific circumstances CMS
should review a potential conflict of interest, and what factors CMS
should look at to determine if a conflict of interest exists.
<bullet> A list describing under what circumstances the AOs or
stakeholders would believe there to be a conflict; and under which
circumstances conflict does not exist.
<bullet> The type of information which would be considered
necessary, useful and/or appropriate in proving or refuting our
hypothesis of a connection between the use of consultative services and
preferential treatment of accredited providers and suppliers. (See 83
FR 65336.)
We received approximately 128 public comments in response to the
2018 AO Conflict of Interest RFI. Approximately half of the commenters,
(consisting primarily of AOs and health care facilities that use
consulting services) supported the use of AO consulting services and
stated that there is no conflict of interest associated with fee-based
consulting. The other half of commenters (consisting of individuals,
provider associations, medical advocacy groups and one AO) stated that
the provision of fee-based consulting by the AOs creates a conflict of
interest.
Several commenters stated that the benefits derived from AO fee-
based consulting far outweighs any potential or actual conflict of
interest that may result. Many commenters believe that AO consulting
services allow the facility to seek information and guidance that helps
them understand, interpret and comply with the Medicare conditions and
regulatory requirements. These commenters stated that use of the AO's
fee-based consulting services helped to improve the safety and quality
of the care provided by the health care facility.
Many commenters stated that there are already-implemented checks
and balances between CMS and the AOs that are sufficient to ensure that
no conflicts of interest occur between the AOs and their accredited
facilities. These commenters stated that the AOs have robust firewall
policies and procedures in place to prevent conflicts of interest
related to fee-based consulting. Many commenters also stated that CMS
has a specific AO fee-based consulting firewall policy in place and
that this policy is adequate to prevent any conflicts of interest.
However, CMS does not currently have such a policy.\6\
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\6\ In section IV.B.6 of this rule, we propose to require any AO
that provides fee-based consulting services or its associated fee-
based consulting division or company to have written fee-based
consulting ``firewall'' policies and procedures.
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Several commenters stated that AOs are commissioned to ensure
compliance with the Medicare conditions. These commenters stated that a
big part of compliance is not only being punitive but informational/
educational. One commenter suggested that AOs are in a unique position
to provide this education and technical assistance because they
understand the complexity of the Medicare conditions. One commenter
stated that if AO fee-based consulting services were not provided,
facilities could see additional deficiencies cited due to
misinterpretation of requirements and multiple rounds of surveys,
generating still more cost to the facility.
Several commenters stated that the financial benefit derived by the
AOs from providing fee-based education is not significant. Some of
these commenters also stated that the AOs gained no benefit from the
success or results of accreditation whether they had assisted the
provider to deliver better services or not.
One commenter stated that they were are not aware of other
organizations who would be capable of educating and advising health
care providers in a similar fashion as the AOs' consulting services.
Several other commenters expressed concern about having fee-based
consulting services provided by an independent third-party. These
commenters stated that, while there are other entities beside the AOs,
such as QIOs that could provide training, the focus would solely be on
quality rather than the outcome of an accreditation.
Many commenters stated that the integrity of the accreditation
process is of utmost concern for regulators, providers and patients
alike and that AOs should position themselves to be above reproach in
regard to overseeing patient care and quality of services that health
care facilities provide, so as to retain the trust of patients and the
public. Several commenters suggested that anything that may undermine
the integrity of accreditation programs or the public trust in CMS
accredited providers and suppliers be considered and addressed. One
commenter stated that the ability of AOs to provide both survey
services and consulting services is a conflict of interest, which
results in a decreased level of trust among providers, Medicare, and
the public.
Many commenters expressed concern about the financial and
contractual relationship that exists between AOs and the health care
facilities they accredit. These commenters expressed
[[Page 12003]]
concern that the existence of a financial relationship between AOs and
health care providers casts a veil of doubt over the entire CMS
hospital accreditation process, eroding the public trust in CMS to
maintain the standard of care at our nation's hospitals and to ensure
that Medicare patients are receiving safe, therapeutic care. One
commenter stated the belief that the business connection between the
provider and the AO creates a relationship that the AO could have an
incentive to manipulate.
In addition, several commenters expressed concern about the
significant financial interest the AOs have in the provision of fee-
based consulting. One commenter stated that since AOs are being paid by
the health care facilities for both accreditation services as well as
consulting services, it is obviously in their financial interest to
keep the health care facilities accredited and not to create too much
dissatisfaction to incite the organization to seek another AO. Several
commenters expressed concern that this financial relationship might
provide the incentive for the AOs to ignore or downplay deficiencies
during the survey of a consultative client in order to increase the
apparent efficacy of its consulting services. Or, perhaps more
undetectably, an AO could exaggerate the deficiencies on surveys in
order to increase the apparent value of the consulting services to
providers. Because of the above-stated concerns, several commenters
suggested that CMS prohibit the AOs from providing fee-based consulting
to the health care providers and suppliers they accredit.
G. Conflict of Interest--The AO Owner's, Surveyor's and Other
Employee's Interest in or Relationship With a Health Care Facility That
the AO Accredits
It is typical for an individual health care professional, such as a
physician or nurse, to have concurrent employment relationships with
more than one health care provider. Many health care professionals,
such as physicians, physician assistants, and nurse practitioners have
multi-setting practices or are employed at more than one health care
facility. For example, a registered nurse (RN) may work on staff at a
hospital but also work at other hospitals through a medical staffing
agency. In addition, as employees of a health care facility, these
health care professionals could possibly gain a financial interest in
the health care facility through means such as being a contributor to
the construction costs of a new wing of the facility or buying stock in
the facility or its parent corporation. Management employees could be
awarded stock or stock options for the facility or its parent
corporation as part of their compensation and benefits package.
AOs frequently hire surveyors that are also employed at one or more
outside health care settings because the professional associations,
expertise, knowledge and skills held by these health care practitioners
make them an asset as a surveyor. This might include, for example, a RN
who is employed by a hospital and also works as a surveyor for an AO.
This employment scenario does not generally violate CMS policy or
regulations. Furthermore, an AO surveyor having other employment does
not, in and of itself, necessarily create a conflict of interest.
However, if the AO provides accreditation services to the health care
facility that employs the AO surveyor, this would cause a conflict of
interest if that surveyor is permitted to have any involvement in the
survey process for that health care facility.
CMS has recently encountered two situations in which an AO's
surveyor was also employed by the health care facility that was being
accredited by the AO. In one of these situations, an AO surveyor was
also employed in an administrative position at a rehabilitation
facility that was being surveyed by the AO. This situation was not
disclosed to CMS by the AO. Currently CMS has no specific regulations
that would prohibit a conflict of interest related to an AO surveyor's
relationship with a health care facility that the AO accredits, except
for home health agencies and hospice programs.
Section 488.5(a)(10) of our regulations requires that an AO
provide, with its application seeking CMS approval of its accreditation
program, ``the organization's policies and procedures to avoid
conflicts of interest, including the appearance of conflicts of
interest, involving individuals who conduct surveys or participate in
accreditation decisions.'' However, Sec. 488.5(a)(10) does not provide
requirements for specific types of information or requirements that
should be contained in the AO's conflict of interest policy and
procedures. This regulation does not specifically prohibit or define
conflicts of interest and, based on the comments to the 2018 AO
Conflict of Interest RFI, CMS proposes to revise this regulation to
more specifically address situations that should be included in the
AO's conflict of interest policy.
As noted above, the SAs and AOs perform similar work. Section 4008
of the SOM describes examples of scenarios that would be conflicts of
interest for SA surveyors who have an outside relationship with a
facility that is surveyed by the SA.\7\ Currently, section 4008 of the
SOM applies only to the SA surveyors and not AO surveyors.
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\7\ <a href="https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c04pdf.pdf">https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/som107c04pdf.pdf</a>.
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Scenarios in which an AO surveyor has a relationship with a health
care facility that their AO accredits could represent a conflict of
interest. As CMS has no specific regulations that would proactively
address such conflicts of interest for AOs that accredit healthcare
providers other than home health agencies and hospice programs, we
propose to establish several requirements to help mitigate such
conflicts of interest in section IV.B.7 of this proposed rule.
III. Request for Public Comment on Whether It Is a Conflict of Interest
for AO Board Members or Advisors To Have an Interest in or Relationship
With a Health Care Facility That the AO Accredits
As previously stated, it could be a conflict of interest when an AO
surveyor is involved with the survey of a facility with which that
surveyor has an employment, financial, business or other interest or
relationship. We note that in most cases, the AO board members do have
interests in or relationships with the health care facilities the AO
accredits. In many cases, the board members of the AOs frequently hold
upper management positions of a health care facility the AO accredits,
such as chief executive officer (CEO), director, or President. In an
article published in the Wall Street Journal on September 8, 2017,\8\
it was stated that ``[t]wenty of the Joint Commission's 32 board
members are executives at health systems it accredits or else work at
parent organizations of such health systems. Some other board members
are named by healthcare lobbying groups, such as the American Hospital
Association and the American Medical Association. This article compared
this situation to ``Big Pharma setting up its own accrediting
organization'' and stated that ``if you look beneath the surface, there
are conflicts and problems.''
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\8\ S. Armour, Hospital Watchdog Gives Seal of Approval, Even
After Problems Emerge, Wall Street Journal, September 8, 2017.
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We seek public comment as to whether it would be a conflict of
interest for an AO board member, AO advisor, or CEO or other executive
team members to also have a relationship with a health care
organization accredited by such AO. An AO advisor
[[Page 12004]]
would be an advisory committee member, advisor to the CEO, or an
advisor to the board of directors. We refer readers to proposals
related to an AO owner's, surveyor's, or other employee's interest in
or relationship with a health care facility the AO accredits in section
IV.B.7 of this proposed rule.
IV. Provisions of the Proposed Rule
We establish health and safety standards, known as the Conditions
of Participation, Conditions for Coverage, or Requirements for
Participation for different types of health care providers and
suppliers, and these standards are based on specific statutory
authorities for the different provider and supplier types. Pursuant to
such authorities, each specific type of Medicare-certified provider and
supplier must meet our health and safety standards. As part of the CMS
certification process, compliance with these standards is evaluated by
SAs under agreement at section 1864 of the Act, through the survey and
certification process. However, CMS makes the final Medicare
certification determination. In the alternative, we can deem these
providers and suppliers to have met those standards if they are
accredited by the CMS-approved AOs that are the subject of this
proposed rule.
CMS is using the authority established by Congress under section
1865 of the Act to establish certain requirements for AOs in this
proposed rule. Section 1865(a)(2) of the Act establishes a process for
the Secretary to make a finding with respect to approval of an
accrediting organization. In making this finding, the Secretary must
consider, among other factors, the AO's requirements for accreditation,
its survey procedures, its ability to provide adequate resources for
conducting required surveys and supplying information for use in
enforcement activities, its monitoring procedures for provider entities
found out of compliance with the conditions or requirements, and its
ability to provide the Secretary with necessary data for validation.
In addition, ``Non-certified'' suppliers are a statutory category
for which CMS does not set health and safety standards, even though
they must obtain accreditation in accordance with statute. Because we
have not set health and safety standards for these facility types, we
are not applying these provisions to non-certified supplier types at
this time. These suppliers include (1) Advanced Diagnostic Imaging
(ADI) suppliers; (2) home infusion therapy (HIT) suppliers; (3)
diabetes self-management training (DSMT) suppliers; and (4) durable
medical equipment prosthetics, orthotics supplies (DMEPOS). We are also
not proposing to extend any of the provisions set forth in this
proposed rule to AOs that accredit non-certified suppliers.
Non-certified suppliers are those suppliers that are required to be
accredited by a CMS-approved AO for Medicare payment, do not enter into
a Medicare agreement but are enrolled in the Medicare program, and do
not receive a CMS certification number (CCN). These non-certified
suppliers are a smaller, discrete group that are not under the
jurisdiction of the SAs and do not undergo validation surveys. For
example, there are no health and safety regulations for advanced
diagnostic imaging (ADI) suppliers and only minimal such standards for
DMST suppliers. Also, many ADI suppliers are physician's practices that
provide an ADI service, such as computerized tomography (CT) scans in
their office. CMS has not yet developed a survey process and health and
safety requirements for these supplier types, however we reserve the
right to do so in the future. CMS does a review of the applications for
AOs that accredit non-certified programs. The provisions proposed in
this rule would not align to these programs at this time.
As stated in section I ``Executive Summary'' and section II
``Background'' of this proposed rule, since issuing the 2015 AO final
rule, there are several provisions related to oversight of AOs that
require strengthening. Throughout the last several years, we have
worked closely with the AOs, provided guidance and instituted an AO
Liaison program in which CMS meets with each AO at least on a quarterly
basis. These meetings and discussions have provided an avenue for CMS
to also receive feedback on existing Medicare conditions, our
interpretive guidelines and allowed for an opportunity for CMS to
clarify expectations for the AOs. This experience has helped us to
identify areas of our regulations in need of revision to more clearly
articulate the requirements for all AOs with a CMS-approved
accreditation program. Furthermore, as we have taken actions to
exercise more oversight of existing CMS-approved AO programs, we have
become aware of the need to clarify, reorganize, and amend our
regulations to support a more efficient and effective oversight
process.
The below proposal outlines the background behind each proposal and
what led to CMS' development of this proposed rule.
A. Proposal To Add Definition of ``Unannounced Survey'' to Sec. 488.1
We propose to add a new definition of ``unannounced survey'' to
Sec. 488.1. The definition of ``unannounced survey'' would be
consistent with the definition of ``unannounced'' contained in the
Merriam-Webster dictionary, which is ``without previous notice or
arrangement and therefore unexpected.'' Adding this definition of
``unannounced survey'' would support the existing requirements set out
at Sec. 488.5(a)(4)(i) and in our sub-regulatory guidance. This
proposal clarifies and codifies existing requirements under Sec.
488.5(a)(4)(i), which requires that surveys must be unannounced, which
means that the facility must be unaware of the survey until the time
that the survey team arrives, and that the provider or supplier would
not receive notice of the survey until the survey team arrives at the
facility. Our long standing policy behind the term ``unannounced
survey'' has been within section 2700A, chapter 2 of the SOM, outlining
the expectation that all surveys of providers and suppliers (other than
clinical laboratories) must be unannounced to the provider or supplier
being surveyed. This means that the provider or supplier to be surveyed
would not receive notice of the survey until the survey team arrived at
the facility for the survey, as is also currently the AO's process for
complaint surveys. The proposed definition for ``unannounced survey''
would also state that unannounced surveys must be scheduled by the AO
in a manner so that their timing and occurance will not be predictable
to the healthcare facility being surveyed.
One of the primary reasons surveys conducted by either the SA or
the AO are required to be unannounced is to prevent the provider or
supplier from making unusual preparations for the survey that would not
represent the ongoing typical condition of the provider and true nature
and quality of care provided. Examples of these activities would
include unusual cleaning activities, painting, clearing obstructions
from halls and entrances, denying leave to staff during that time or
calling staff back to inflate staffing availability, and re-reviewing
medical records outside of what is normally done. If a provider or
supplier knows the exact time a surveyor will be onsite, it may
temporarily adjust its typical practices such as staffing, which would
provide an unrepresentative picture to surveyors of the quality of care
typically provided to patients or residents. A notice to facility
leadership via
[[Page 12005]]
organizational websites, emails, or phone calls prior to surveyors
arriving onsite is considered a violation with CMS regulations.
In 2009, CMS clarified this expectation in the Survey &
Certification Policy Memorandum 09-41,\9\ to advise that announcing of
surveys was in conflict with CMS regulations. In the effort to align AO
survey processes with CMS survey processes (which are followed by the
SA surveyors), as outlined in section IV.C of this proposed rule,
additional clarity regarding this prohibition is needed. Defining the
term ``unannounced survey'' within the regulation as opposed to our SOM
(subregulatory guidance) would provide clarity regarding our
expectations, and would mirror the processes used by our SAs, who do
not announce their surveys (except for clinical laboratories); as
noted, any AO practice of announcing surveys could undermine the
integrity of the survey process. While we recognize AOs may have
provided up to a 60-minute advance notice of the survey team arriving
onsite for initial and reaccreditation survey activities, this is
inconsistent with the processes followed by our SAs, and is
inconsistent with the AOs' own survey processes for complaint surveys
(which are always unannounced).
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\9\ <a href="https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Policy-and-Memos-to-States-and-Regions">https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Policy-and-Memos-to-States-and-Regions</a>-Items/CMS1223113.
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Therefore, in accordance with Sec. 488.5(a)(4)(i), which requires
unannounced surveys, as well as our long-standing policy in section
2700A, chapter 2 of the SOM, we propose that all surveys of providers
and suppliers (other than clinical laboratories) must be unannounced
and any advance notice to facilities would be prohibited. This proposed
requirement would apply to AOs as well as SAs and further support our
initiative to bring consistency to survey practices as outlined in
section IV.C of this proposed rule.
Furthermore, the definition of ``unannounced survey'' must ensure
that the recertification surveys are unpredictable. AOs generally
complete comprehensive re-accreditation surveys of their client
providers and suppliers every 32 to 36 months. However, some providers
or suppliers have informed us that they know when an AO is scheduled to
survey the facility--the AO may schedule the facility for survey within
the same week or month every survey cycle, or has narrowed its schedule
via the use of blackout days, or informed the facility close to the
time of the survey via administrative contact from the AO, such as
payment collection, confirmation or change of address notification or
other facility-AO specific information. All of these practices
undermine the integrity of the unannounced survey process.
B. Conflict of Interest
1. Proposal for Information To Be Submitted With the AOs' Conflict of
Interest Policies and Procedures (Proposed Revisions to Sec.
488.5(a)(10))
Section 488.5(a)(10) currently requires that the AO submit ``the
organization's policies and procedures to avoid conflicts of interest,
including the appearance of conflicts of interest, involving
individuals who conduct surveys or participate in decisions.'' This
requirement does not require the AO to address any specific areas or
issues in their conflict of interest policies and procedures. In
addition, the AOs only need to submit this information to CMS with
their initial and renewal applications, which is currently every 6
years or less, as established by CMS.
We propose to revise Sec. 488.5(a)(10) by adding a requirement
that AOs must provide CMS with more specific conflict of interest
policies and procedures. We propose at Sec. 488.5(a)(10)(i) to require
the AOs to provide CMS with their policies and procedures for
separation of their fee-based consulting services from their
accreditation services (that is, fee-based consulting ``firewall''
policies and procedures). We propose at Sec. 488.5(a)(10)(ii) to
require the AOs to provide their policies and procedures for protecting
the integrity of the AOs' accreditation program, including the
requirements of proposed Sec. 488.8(i) and (j) noted below. Section
488.8(i) pertains to restrictions on certain fee-based consulting
services provided by AOs, and Sec. 488.8(k) pertains to conflicts of
interest which arise due to AO owners, surveyors, and other employees
having a business, employment, financial or other type of relationship
with a health care facility accredited by the AO.
At Sec. 488.5(a)(10)(iii), we propose to require the AOs to
provide policies and procedures for the prevention and handling
potential or actual conflicts of interest that could arise from
situations in which an AO owner, surveyor, or other employee has a
business, employment or financial interest in or relationship with
another survey agency or health care facility to which the AO provides
accreditation services.
Proposed Sec. 488.5(a)(10)(iii) would further state that such
interests or relationships would include but not be limited to: (1)
being employed as a SA surveyor; (2) being employed in a health care
facility that is accredited by the AO; (3) having an ownership,
financial or investment interest in a health care facility that is
accredited by the AO; (4) serving as a director of or trustee for a
health care facility that is accredited by the AO; (5) serving on a
utilization review committee of a health care facility that is
accredited by the AO; (6) accepting fees or payments from a health
facility or group of health facilities that is/are accredited by the
AO; (7) accepting fees for personal services, contract services,
referral services, or for furnishing supplies to a health care facility
that is accredited by the AO; (8) providing consulting services to a
health care facility that the AO accredits; (9) having members of their
immediate family engaged in any of the stated activities, other than
being a non-managerial employee of a health facility that is accredited
by the AO; and (10) engaging in any activities during the course of the
survey of the facility that would be or cause a conflict of interest.
In proposed Sec. 488.5(a)(10)(iii)(I), we have defined the term
``immediate family member'' as a husband or wife, birth or adoptive
parent, child, or sibling; stepparent, stepchild, stepbrother, or
stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law; grandparent or grandchild; and spouse
of a grandparent or grandchild. This is also consistent with the
definition of ``immediate family member'' used for the hospice program
conflict of interest regulations at Sec. 488.1115.
We further propose at Sec. 488.5(a)(10)(iv) to require AOs to
provide policies and procedures for providing notification to CMS when
such a conflict of interest is discovered.
We propose at Sec. 488.5(a)(10)(v) to define ``conflict of
interest'' as a situation in which an AO, its owner(s), surveyors, or
other employees, or the AO's successors, transferees, or assigns, or
the immediate family members of the AO owners(s), surveyors and other
employees have an employment, business, financial or other type of
interest in or relationship with a health care facility the AO
accredits. We would deem a conflict of interest to have occurred if one
of the above-stated parties either knowingly or unknowingly exploited
their interest in or relationship with that provider or supplier. We
remind readers that in the CY 2022 Home Health Prospective Payment
System Rate Update (86 FR 62368) that we finalized similar conflict of
interest regulations for hospice
[[Page 12006]]
programs at Sec. 488.1115(b). The proposed requirements of this rule
for accrediting organizations are consistent with, and build upon, the
current conflict of interest regulation for hospice programs at Sec.
488.1115(b). For additional discussion on the Hospice final rule see 86
FR 62368.
We are proposing changes to Sec. 488.5(a)(10) to require the AO to
have policies and procedures for the prevention, handling of and
notification of CMS when conflicts of interest arise, because on
several occasions, AOs have failed to notify CMS of such conflicts of
interest. These changes would broaden our oversight of the AOs'
handling and reporting of conflicts of interests. Additionally, by
requiring the AOs to provide CMS with more specific information about
their conflict-of-interest policies and procedures, CMS would be
afforded a more comprehensive look at how the AOs plan to handle
specific scenarios that CMS would deem to be conflicts of interest.
These proposed requirements would require those AOs that did not have
policies and procedures to prevent, address and handle conflicts of
interests to develop and use them.
The proposed requirements at Sec. 488.5(a)(10)(iii), for the
conflict of interest and information that must be submitted with the
AOs' conflict of interest policies and procedures, are more detailed
than the requirements currently set forth in section 4008 of the SOM,
which provide examples of possible scenarios that could be conflicts of
interest for the SA surveyors. Section 4008 of the SOM leaves it to the
discretion of the SA management to decide how to identify and address
these conflicts of interest.
A more detailed conflict of interest requirement is not necessary
for the SA surveyors because SA surveyors, who are state employees, are
generally required to report incidences of conflicts of interest to the
SA management, who is tasked with taking the appropriate action.
Unlike the SAs, the AOs are more likely to encounter scenarios with
conflicts of interest. For example, AO owners, board members, surveyors
and other employees might also be employed by health care facilities
that are surveyed and accredited by that AO. Therefore, the proposed
requirements for AOs must be more detailed and prescriptive than SAs
because of the likelihood of them encountering conflicts of interest.
2. Proposal To Require AOs To Obtain and Submit Surveyor Declarations
of Any Interest in and Relationships With Health Care Providers the AO
Accredits to CMS on an Annual Basis (Proposed Sec. 488.5(a)(22))
A conflict of interest may exist when an AO surveyor has
interest(s) in or relationship(s) with a health care facility the AO
accredits. Requiring AOs to obtain and submit declarations detailing
such interests and relationships would ensure that CMS is notified of
potential or actual conflicts of interest AO surveyors might have with
the providers and suppliers the AO accredits. Such notice would allow
CMS to be aware of the existence of these potential or actual conflicts
of interest, some of which would preclude a surveyor from participating
in survey activities (see Sec. 488.8(j) discussion at section IV.B.6
of this proposed rule) and some of which would not.
We propose to add a new provision at Sec. 488.5(a)(22) that would
require the AO to obtain declarations from all surveyors employed or
contracted to the AO regarding any employment, business, financial or
other interests in or relationships they have with the health care
facilities the AO accredits. We propose that AOs would initially be
required to submit the surveyor declarations with their initial
application for CMS approval of their accreditation programs. We
further propose to require the AOs to update the surveyor declarations
on an annual basis, and that the information from the annual updated
surveyor declarations be submitted to CMS no later than December 31st
each year. Annual updates would be necessary because a surveyor's
interests in and relationships with health care facilities the AO
accredits could change over time. This requirement would ensure that
the information contained in the surveyor declarations remains up-to-
date and accurate. This provision at paragraph (a)(22) would be
implemented 1 year after the effective date of the final rule (which
would be 60 days after publication of the final rule). We further
propose to require the AOs to begin submitting their surveyor
declaration information on or before the December 31st that occurs
after the implementation date of this requirement.
3. Proposal To Place Restrictions on Fee-Based Consulting Services
Provided by AOs to the Medicare-Certified Providers and Suppliers They
Accredit (Proposed Sec. 488.8(i))
CMS recognizes the value of fee-based consulting by independent,
third-party consultants who provide insight or expertise to assist
facilities in achieving or maintaining compliance with AO and/or
Medicare's health and safety standards. These interventions are
beneficial and often tailored to meet a facility's specific compliance
needs. Consulting services also may assist a provider or supplier in
identifying quality concerns, whether based on a Medicare requirement
or standards of practice, and therefore these services may improve the
safety of patient care. AO fee-based consulting activities are not
prohibited by federal law and there are no current CMS regulations
prohibiting AOs from providing fee-based consulting services.
However, AOs assume a public trust role when voluntarily applying
to CMS for deeming authority. This authority, once granted, conveys
Medicare certification for those entities accredited by the AO and it
is essential that the integrity of their oversight process be above
question. A number of AOs with CMS-approved accreditation programs
currently provide AO fee-based consulting services to the Medicare-
participating health care facilities they accredit. When an AO provides
fee-based consulting services to a provider or supplier it accredits it
could create a conflict of interest for several reasons.
First, AOs provide deeming surveys to providers or suppliers on
behalf of CMS. AOs are required to use accreditation standards that are
comparable to or exceed the Medicare standards and survey processes in
the performance of deeming surveys. A potential or actual conflict of
interest arises from allowing a CMS-approved AO with deeming authority,
the ability to charge a provider or supplier to conduct a deeming
survey to identify non-compliance (for Medicare participation), and
also charge for providing AO fee-based consulting services to help the
provider meet Medicare requirements.
Second, providers and suppliers often choose AO fee-based
consulting specifically for the additional resources and assistance
provided. Some AOs publicly advertise the ability of their fee-based
consulting to simulate what to expect from the actual AO survey. It is
possible that Providers and suppliers found to be non-compliant by
their AO may assume that the most direct path to compliance is to hire
the AO's fee-based
[[Page 12007]]
consulting services. Such an assumption would provide AOs with fee-
based consulting services with an unfair advantage over other, third-
party consulting services.
Finally, by charging for accreditation services (for example,
deeming surveys) and also for the subsequent fee-based consulting
services, for the purpose of remediating deficiencies identified by the
same AO, there may be an expectation from providers and suppliers that
the AO demonstrate the effectiveness their consulting services on
subsequent compliance surveys. In other words, the provider or supplier
may expect to receive a favorable survey report because they have paid
the AO not only for accreditation but also for fee-based consulting
services which are promoted by the AOs to help the provider or supplier
do well on their survey. In addition, this expectation may push AOs to
ignore significant deficiencies found during survey of its fee-based
consulting clients in order to demonstrate the efficacy of its fee-
based consulting and promote these services.
In short, an AO's business model is geared toward retention of its
accredited providers and suppliers. AOs that provide both regulatory
oversight through Medicare deeming surveys and also fee-based
consulting services, which are geared towards assisting clients comply
with the requirements required to pass the surveys, invites concerns
about the integrity of their final compliance determinations.
CMS issued an AO Conflict of Interest RFI (83 FR 65331) in 2018 to
gather feedback related to AO conflict of interest practices. We
received 128 public comments in response to the RFI. Many commenters
stated that fee-based consulting provided by an AO or its associated
consulting division or company to the health care facilities it
accredits is a conflict of interest. These commenters stated that this
conflict of interest arises from granting the inherently governmental
function of monitoring patient safety, by regulating health care
providers through accreditation, to a private entity, especially when
that private entity profits from those who are regulated.
Several commenters alleged that AOs that provide fee-based
consulting may have the incentive to ignore deficiencies detected
during the accreditation survey, in order to provide a ``good'' survey
report to demonstrate the apparent efficacy of their AO fee-based
consulting services and also to keep the paying customer(s) happy. Many
commenters also suggested that if an AO provides poor survey results to
a health care facility that has paid a significant fee for
accreditation, it is unlikely that the facility would continue to
retain that AO as a service provider.
After careful review and analysis of the public comments received
in response to the RFI, we agree that a conflict of interest arises
from the contractual and financial relationship between the health care
provider and the AO, which is a private entity that profits from the
performance of regulating health care providers through accreditation.
AOs that provide fee-based consulting services generate additional
revenue beyond the fees realized for accreditation services by
providing fee-based consulting services to the same facilities they
accredit.
We propose at Sec. 488.8(i) several restrictions on fee-based
consulting provided by these AOs, their consulting divisions, or
separate business entities. By ``fee-based consulting division,'' we
mean a separate division within the AO that provides fee-based
consulting services. This division of the AO would have a separate
manager and staff. By ``separate business entity,'' we mean a business
entity, such as a company or corporation, that is separate and apart
from the AO and that has been established by the AO, either under a
similar or different name, for the purpose of the providing fee-based
consulting services.
The proposed regulation at Sec. 488.5(i) would still allow AOs to
provide fee-based consulting services to the providers and suppliers
they accredit with restrictions that address the conflict of interest
issues associated with this service.
We propose at Sec. 488.8(i)(1) that, unless excepted under
proposed Sec. 488.8(i)(4), AOs and their associated consulting
divisions or companies would be prohibited from providing fee-based
consulting services to any health care provider or supplier to which
the AO provides accreditation services prior to an initial
accreditation survey. However, the health care provider or supplier may
seek fee-based consulting services from an entity entirely uninvolved
in that provider or supplier's accreditation process. This option
allows these providers and suppliers support they may believe necessary
to meet Medicare standards and requirements prior to serving patients
while eliminating any conflict of interest for their AO.
For purposes of proposed Sec. 488.8(i)(1), the term ``initial
survey'' would mean the first accreditation survey of a health care
provider or supplier performed by an AO. The term ``prior to the
initial accreditation survey'' would mean the time period beginning on
the day the provider or supplier enters into a contract with the AO to
provide accreditation services and continuing until the date that the
initial accreditation survey is completed. The survey completion date
would include the completion of any required plans of correction by the
provider or supplier. In addition, if a health care provider or
supplier was terminated or withdrew from the AO's accreditation and
later retained the services of that AO, the first survey of the
returning health care provider or supplier performed by the AO would be
considered an initial accreditation survey.
The requirement of proposed Sec. 488.8(i)(1), which would prohibit
an AO from providing fee-based consulting or coaching to a health care
provider or supplier prior to the initial accreditation survey, would
provide a more accurate assessment of the provider's or supplier's
baseline operating conditions and deficiencies on the initial survey.
Such a raw assessment would not be possible if the provider or supplier
receives AO fee-based consulting prior to the initial accreditation
survey.
In addition, such a baseline assessment of deficiencies would be
useful to the AO in assessing areas needing improvement, developing a
plan of correction and areas of focus for the fee-based consulting.
This proposed restriction would also remove the financial incentive on
the part of the AO to ignore deficiencies during the initial survey of
providers and suppliers that paid for fee-based consulting prior to an
initial survey.
We note that this proposal only restricts an AO with deeming
authority and a fee-based consulting practice from providing fee-based
consulting services to its accredited providers and suppliers prior to
the initial accreditation survey. It does not prohibit providers and
suppliers from hiring third-party fee-based consulting services prior
to their initial AO survey, in other words, this proposal does not
prohibit other consulting services from being used during this period.
We do not anticipate that this proposal would cause a negative
impact on the patient care provided by the provider or supplier for
several reasons. First, providers or suppliers would be able to obtain
AO fee-based consulting during the first 24 months of the 36-month
reaccreditation cycle which occurs after the initial survey. This
education could be tailored to address the deficiencies found during
the initial survey. If the AO were to provide fee-based consulting
prior to the initial survey, the AO would not know what
[[Page 12008]]
deficiencies exist and would only be able to provide generalized fee-
based education to the provider or supplier. Second, the provider and
supplier could always seek fee-based education prior to the initial
survey from a third -party consultant. The purpose of our proposal to
prohibit AO fee-based consulting prior to the initial survey and during
the 12-month period prior to each reaccreditation survey is to reduce
or remove any potential or actual conflict of interest. However, if a
provider or supplier were to seek fee-based consulting from a third-
party consultant, that has no relationship to the AO that accredits
that provider or supplier, no conflict of interest would exist.
We also propose at Sec. 488.8(i)(2) to prohibit AOs from providing
fee-based consulting services to a health care provider or supplier it
accredits within 12 months prior to the next scheduled re-accreditation
survey of that provider or supplier. For purposes of proposed Sec.
488.8(i)(2), the term ``re-accreditation survey'' would mean any
subsequent accreditation surveys performed by the AO after the initial
survey.
The accreditation cycle for most Medicare-certified providers and
suppliers is 36 months (3 years), which means that the AOs perform an
accreditation survey of these providers and suppliers no less than
every 36 months. The proposed language at Sec. 488.8(i)(2) would allow
AOs to provide fee-based consulting during the first 24 months (2
years) of the accreditation cycle, but not during the 12-month (1-year)
period preceding the re-accreditation survey. For example, with this
proposal, if the initial survey was completed on June 1, 2025, the
provider's or supplier's reaccreditation survey would be due by June 2,
2028. The AO could provide fee-based consulting to the provider or
supplier from June 2, 2025, to June 2, 2027. The AO would be prohibited
from providing AO fee-based consulting to the provider or supplier from
June 2, 2027, to June 2, 2028. An accredited provider or supplier would
retain the ability to use consultants not affiliated with their AO at
any time, including any timeframe prior to or after an accreditation
survey for Medicare compliance.
The proposed requirement would provide the accredited provider or
supplier ample time to obtain the education they need in order to
understand the CMS requirement, the AO's accreditation standards and
survey process, and 1-year period, prior to their next accreditation
survey, in which to implement the AO's accreditation standards and CMS
standards (CoPs) in their facility and rectify any deficiencies found
during the initial survey.
The proposed requirement at Sec. 488.8(i)(2) would address the
actual or potential conflicts of interest associated with AO fee-based
consulting because it creates a 1-year time period prior to the re-
accreditation survey in which the AO is prohibited from providing any
type of additional teaching or ``coaching'' that would help the
provider or supplier ``pass'' or obtain better scores on the upcoming
accreditation survey.
We further propose at Sec. 488.8(i)(3) that the AOs or their
associated consulting divisions or companies be prohibited from
providing fee-based consulting services to a health care provider or
supplier in response to a complaint received by the AO regarding that
provider or supplier. Our rationale for this requirement is that AOs
are required by CMS regulation to investigate and resolve complaints
received regarding their accredited providers and suppliers (that is,
42 CFR 488.5(a)(4)(ix); 42 CFR 488.5(a)(12)). This regulatory
requirement includes investigating the complaint and working with the
accredited provider or supplier to help them resolve any deficient
practices identified in the complaint. AOs charge a significant fee for
their fee-based consulting. AOs should not profit by providing fee-
based consulting to a provider and supplier in response to a complaint
that they are regulatorily required to investigate and resolve. This
proposed regulation would prevent this from occurring.
We propose at Sec. 488.8(i)(4)(i) to (iv) that the restrictions
upon AO fee-based consulting would not apply to the following
situations: (1) AO fee-based consulting services provided during the
24-month period after the date the initial or re-accreditation survey
is performed (proposed Sec. 488.8(i)(4)(i)); (2) AO fee-based
consulting services provided to address complaints received and
investigated by the SA regarding an AO's accredited provider or
supplier in which one or more condition-level or immediate jeopardy
deficiencies are identified, provided however that, the fee-based
consulting must occur after the complaint investigation and survey has
been completed and must only address those issues identified by the
complaint survey (proposed Sec. 488.8(i)(4)(ii)); (3) AO fee-based
consulting services provided to health care providers or suppliers to
which the AO has never provided accreditation services (proposed Sec.
488.8(i)(4)(iii)); and (4) no-cost consulting or general education
provided by the AO about their accreditation program (proposed Sec.
488.8(i)(4)(iv)).
Proposed Sec. 488.8(i)(4)(ii) would allow AOs to provide AO fee-
based consulting services in response to complaints received by the SA
regarding an AO's accredited provider or supplier. However, this fee-
based consulting must be provided by the AO after completion of the SA
investigation and complaint survey. We would permit AO fee-based
consulting services after a complaint is received by the SA, because
the SA, not the AO, would perform an investigational survey. Therefore,
the affected provider or supplier should be permitted to seek fee-based
consulting from its AO, in accordance with the restrictions stated
above, to address the issues identified in the SA complaint and
complaint survey, if appropriate.
It is important to note that AO fee-based consulting should only be
provided when serious deficiencies have been identified in the SAs
complaint investigation report. By serious deficiencies, we mean
deficiencies that would be considered condition level by the SA and the
AO. However, the AO should first work directly with the provider or
supplier, as part of their accreditation services package, to resolve
the issues identified in the SAs complaint investigation report and
only provide AO fee-based consulting if these issues cannot be resolved
successfully, through other methods. It has always been the duty of the
AOs to address and resolve complaints received regarding its accredited
providers and suppliers, whether said complaint is received by the AO
or the SA. An AO receives a significant fee for the accreditation
services provided. We believe that the investigation and resolution of
complaints falls squarely under these paid accreditation services. We
do not believe it appropriate for AOs to offer fee-based consulting/
educational services in response to each and every complaint received
regarding one of its accredited providers or suppliers. In other words,
the AOs should not realize additional profit from its paying customers,
when it has already been paid to perform the task at hand.
More specifically, we would expect that an AO not offer fee-based
consulting to an accredited provider or supplier in response to a
complaint, unless the deficiency(ies) identified in the complaint are
substantiated by the investigation, and found to be systemic,
widespread, and ingrained in the culture of the organization. We would
also expect to find that the AO first attempted to work with the
provider or supplier, as part of the accreditation services provided,
to resolve the deficiencies identified in the complaint,
[[Page 12009]]
before resorting to fee-based consulting. Finally, we would expect to
find that if an AO offers fee-based consulting/educational services to
the provider or supplier, they do so after trying all non-cost options
available, and that the fee-based consulting/education was reasonably
expected to resolve the deficiencies identified in the compliant.
Proposed Sec. 488.8(i)(4)(ii) requires that the AO fee-based
consulting cannot be provided until after completion of the SA's
investigation and complaint survey. By ``completion of the SA's
investigation'', we mean the date upon which the SA has completed all
work required to investigate the complaint and has issued its findings.
This restriction is necessary because if the affected provider or
supplier were to receive fee-based consulting from the AO prior to the
completion of the SA's investigation and complaint survey, the affected
provider or supplier potentially could alter processes, operations or
documentation, all of which could compromise the SAs investigation of
the complaint. In such a scenario, the investigation and complaint
survey report would not be an accurate reflection of the issues
identified in the complaint. While it may seem counter-productive for
the affected provider or supplier to obtain AO-fee-based consulting
after completion of the SA's investigation and complaint survey, we
believe that it would actually be helpful to the affected provider or
supplier. After completion of the SA's complaint survey and
investigation, the affected provider or supplier will receive a
complaint investigation report, which will allow the AO to tailor the
fee-based consulting services or other educational activities to
address any deficiencies identified in said report. Also, through AO
fee-based consulting services, the AO could work with the affected
provider or supplier, at their own pace, to implement long-lasting and
sustainable changes that address the deficiencies identified, as
opposed to the implementation of quick temporary solutions or
corrective action prior to completion of the complaint investigation. A
quick temporary solution would be one that the provider or supplier
implements on a short-term basis, typically only during the time that
the surveyors are present. By contrast, a long-lasting and sustainable
solution would be one in which the provider or supplier implements the
solution, orients the staff to its requirements, regularly monitors for
compliance with the requirements and corrects non-compliance on a
continual basis.
Proposed Sec. 488.8(i)(4)(iii) would further allow AOs to provide
fee-based consulting services to health care providers or suppliers the
AO does not accredit at the time the consulting services are furnished.
If the AO has not provided accreditation services to a provider or
supplier at the time fee-based consulting services are provided, the AO
would not have a preexisting financial relationship with that provider
or supplier. Thus, no conflict of interest would exist.
Proposed Sec. 488.8(i)(5) would require AOs to report information
about the fee-based consulting provided to the providers and suppliers
they accredit to CMS. See section IV.B.4 for information about this
proposed rule.
Proposed Sec. 488.8(i)(6) provides for penalties for AOs that
provide fee-based consulting in violation of the restrictions set forth
on proposed Sec. 488.8(i)(1) to Sec. 488.8(i)(3). See section IV.B.5
of this proposed rule for a discussion of this proposed section.
We propose at Sec. 488.8(i)(7) that the requirements at Sec.
488.8(i) would become applicable 1 year from the effective date of the
final rule to allow for an appropriate time of transition. We believe
that this would provide ample time for the AOs to prepare for and
implement the proposed requirements at Sec. 488.8(i).
The conflict inherent in AO fee-based consulting on accreditation
standards while an AO is also performing surveys to determine
compliance with those same standards is what the proposed restrictions
on AO fee-based consulting seek to address. An entity that collects
fees to remedy findings or prepare for a survey performed by another
arm of the same entity creates a perceived conflict of interest that
undermines the integrity of the health and safety oversight process.
These proposals seek to allow continuance of independent consulting
activities while addressing concerns related to fee-based consulting
performed by the AOs, themselves.
We note that this proposed restriction on AO fee-based consulting
services at Sec. Sec. 488.8(i)(1), 488.8(i)(2), and Sec. 488.8(i)(3)
would not prohibit the AOs from providing no-cost education, such as
general education about the AO's accreditation and survey process and
mock surveys. The restrictions on AO fee-based consulting would also
not prohibit AOs from providing education about the Medicare
conditions, AO standards, or survey process, to its accredited health
care providers and suppliers, as long as this education is provided
completely free of charge. This means that the AO would not be allowed
to raise the price of their accreditation services because of the
provision of this education, or do anything else that would cause the
provider or supplier to incur any additional costs for the education
provided by the AO, its consulting division or separate consulting
company to the providers or suppliers it has contracted with to provide
accreditation services. We believe that it is important that health
care providers and suppliers receive education that would assist them
in compliance, so long as it is not provided on a fee basis, which
would introduce another financial relationship between the AO and the
provider or supplier that could cause a conflict of interest.
We also note that other CMS programs have established similar
conflict of interest and independence provisions for organizations that
have a public trust role in assessing the quality of services provided.
For example, in the Medicaid program, CMS has established regulatory
standards with respect to the independent judgment of any External
Quality Review Organization that reviews the quality of the Medicaid
managed care organization for the state (42 CFR 438.354). These
regulations establish, among other requirements, that an External
Quality Review Organization may not review any managed care entity for
which that organization has also conducted a private accreditation
review within the previous 3 years.
Our proposal to place restrictions on the provision of fee-based
consulting by AOs to their current accredited providers and suppliers
is authorized by section 1865(a)(2) of the Act, which gives CMS the
broad power of oversight over the activities of AOs. The provision of
AO fee-based consulting is one of the factors in section 1865(a)(2) of
the Act that should be considered in determining whether a national
accreditation body demonstrates that all of the applicable conditions
or requirements of this title are met or exceeded.
4. Proposal To Require AOs To Provide CMS With Information About the
Fee-Based Consulting They Provide (Proposed Sec. 488.8(i)(5))
We proposed at Sec. 488.8(i)(1), Sec. 488.8(i)(2), and Sec.
488.8(i)(3) to place restrictions on the fee-based consulting services
provided by AOs. In order to enforce our proposals, we propose at Sec.
488.8(i)(5) to require the AOs that provide fee-based consulting
services to submit information to CMS, on a calendar year bi-annual
basis, about the fee-based consulting services they provide.
We propose to add a requirement at Sec. 488.8(i)(5) that would
require the AOs
[[Page 12010]]
that accredit Medicare-certified providers and suppliers to provide CMS
with information regarding the fee-based consulting services no later
than 15 days after the end of each calendar year bi-annual (6-month)
period.
More specifically, this proposal would require these AOs to submit
a document which contains the following information to CMS:
<bullet> Whether the AO or an associated consulting division or
company established by the AO provides fee-based consulting services.
<bullet> The names and CMS Certification Number (CCN) numbers of
all health care providers and suppliers to which the AO or its
associated consulting division or company has provided fee-based
consulting services during the previous calendar year quarter.
<bullet> The dates the AO fee-based consulting services were
provided to each provider and supplier listed.
<bullet> Whether the accrediting organization has, at any time in
the past provided, or is currently providing accreditation services to
each health care provider or supplier listed in said document, and if
so, the date the accreditation services were provided.
<bullet> The date of the most recent accreditation survey
performed, and the date the next re-accreditation survey is due to be
performed for each health care provider and supplier listed in said
document.
<bullet> A description of the AO fee-based consulting services
provided to each health care provider or supplier listed in said
document.
We are further proposing that the two bi-annual reporting periods
would consist of January 1st to June 30th and July 1st to December 31st
each year. The submission deadline for the first period would be July
15th each year. The submission deadline for the second period would be
January 15th each year. This would ensure that AOs are not providing
fee-based consulting services to providers and suppliers prior to an
initial survey, within 12 months prior to a re-accreditation survey, or
in response to a complaint received regarding an accredited provider or
supplier. In addition, this information would also allow CMS to see the
number of providers and suppliers to which the AOs are providing fee-
based consulting services.
We propose that these provisions would become applicable 1 year
from the effective date of final rule to allow for an appropriate time
of transition. We believe that this would provide the AOs with ample
time to prepare for and implement this requirement.
5. Proposal for Penalties for AOs Found To Be Providing AO Fee-Based
Consulting Services to the Health Care Providers or Suppliers They
Accredit in Violation of the Restrictions in 42 CFR 488.5(i)(1) Through
Sec. 488.5(i)(3) (Proposed Sec. 488.8(i)(6))
In section IV.B.3 of this proposed rule, we propose to implement
regulations that place restrictions on the fee-based consulting
services AOs provide to the health care providers and suppliers that
they accredit. In order to enforce these regulations, we propose at
Sec. 488.8(i)(6) to implement penalties for the violation of the
restrictions on AO fee-based consulting.
We propose at Sec. 488.8(i)(6)(i) that if an AO is found to be in
violation of the restrictions set forth in paragraphs Sec.
488.8(i)(1), (2) and (3), CMS may initiate penalties against the AO.
These penalties are set forth in proposed Sec. 488.8(i)(6)(i) and
Sec. 488.8(i)(6)(ii) and include placing the AO on a program review,
and involuntary termination of the CMS-approved AO's accreditation
program(s).
Whether or not we impose the penalties provided in Sec.
488.8(i)(6)(i) and (ii) would depend on the severity of the violation
and the facts and circumstances surrounding the violation. Such facts
might include the number of providers and suppliers that contracted for
prohibited AO fee-based consulting services, the number of times the AO
violated the restrictions of Sec. 488.8(i).
The purpose of these proposed provisions is to discourage AOs from
violating the proposed restrictions on the provision of fee-based
consulting to the providers and suppliers they accredit.
We propose that these provisions would become applicable 1 year
from the effective date of the final rule. We believe that this would
provide ample time for the AOs to prepare for the implementation of the
requirements of this rule.
6. Proposal To Require Accrediting Organizations To Have Written Fee-
Based Consulting Firewall Policies and Procedures (Sec. 488.8(j))
We propose at Sec. 488.8(j) to require any AO that provides fee-
based consulting services or its associated fee-based consulting
division or company to have written fee-based consulting ``firewall''
policies and procedures. We have defined the terms ``consulting
division'' and ``associated company'' in section IX.B.3 of this
proposed rule. We define the term ``firewall'' as the complete and
total separation between the AO's accreditation activities and its fee-
based consulting services.
We propose that these firewall policies and procedures must, at a
minimum, include the following provisions: at paragraph (j)(1)(i) the
AO's fee-based consulting services must be provided by a separate
division of the AO or separate business entity (that is company or
corporation) from the AO; at paragraph (j)(1)(ii) the AO's fee-based
consulting division or separate company must maintain separate staff
from that of the AO's accreditation division(s) to ensure that the fee-
based consulting division staff do not perform AO's accreditation
division functions and that the AO's accreditation division staff do
not perform fee-based consulting division functions; and at paragraph
(j)(1)(iii), the AO's accreditation staff and surveyors would be
prohibited from marketing the AO's fee-based consulting services to the
AO's accreditation clients.
The purpose of the provisions of proposed Sec. 488.8(j) is to
ensure that the AO maintains a complete division between their fee-
based consulting program and their accreditation program. In other
words, we seek to require the AOs to prevent any co-mingling of fee-
based consulting activities and staff with their accreditation
activities and staff. These requirements are necessary because several
commenters to our 2018 AO Conflict of Interest RFI, noted concern that
while some AOs that provide fee-based consulting have such firewall
policies in place, they have been breached. For example, one commenter
stated that one AO's accreditation staff aggressively marketed that
AO's fee-based consulting services to his health care facility. In
addition, during a CMS validation pilot joint survey with an AO, a SA
surveyor witnessed the AO's surveyors providing detailed education
about the survey process to the healthcare facility staff prior to the
start of the survey. This is inappropriate because surveys are to be
unannounced to prevent the facility from preparing for the survey. At
the beginning of a survey, a brief entrance conference is held for the
purpose of introducing the survey team, providing the survey agenda to
the facility staff, and telling the facility what records the surveyors
will be reviewing during the survey. However, providing detailed
information about the survey process and what areas the AO is going to
focus on during the survey gives the facility an advantage and time to
prepare for the survey. This negates the purpose of requiring surveys
to be unannounced and could allow the facility staff time to clean up
and
[[Page 12011]]
remove deficiencies that would normally be present. In addition,
providing such education to a health care facility prior to a survey
could assist that facility in getting a better survey report.
We do not currently have any regulations that provide oversight of
the fee-based consulting services provided by AOs or their separate
divisions or companies. Likewise, we do not currently have any
regulations that specifically require AOs that provide fee-based
consulting services to have written firewall policies or regulations
that provide requirements for such policies. Regulations are needed so
that CMS may ensure that an AO's fee-based consulting remains separate
from an AO's accreditation activities. This division is necessary to
reduce the conflict on interest associated with the provision of AO
fee-based consulting services.
7. Proposal To Prohibit AO Owners, Surveyors, and Other Employees From
Involvement With the Survey and Accreditation Process for Health Care
Facilities With Which They Have an Interest or Relationship (Proposed
Sec. 488.8(k))
Surveyors must rely on their professional judgment, in addition to
federal rules and guidelines, to determine compliance. An AO surveyor,
owner, or other employees' interest in or relationship with a health
care facility that the AO accredits could present a conflict of
interest that could affect the results of a survey in several ways. For
example, an AO owner, surveyor, or other AO employee involved in the
survey of a healthcare facility with which the individual has an
interest or relationship could have compromised judgment, consciously
or unconsciously, regarding that facility. For example, a surveyor with
an interest in or relationship with the health care facility being
surveyed could be inclined to minimize or ignore deficiencies, possibly
because he or she believes these deficiencies are not representative of
the facility. A surveyor who has an interest in or relationship with
the facility being surveyed could possibly influence the findings made
by other members of the survey team by asking them to give the facility
credit for things not observed, since he or she can ``vouch'' for the
facility.
Even if the AO employee with the interest in or relationship with
the facility being surveyed is not part of the survey team for the
facility, he or she could still potentially influence the members of
the survey team prior to or after the survey. For example, attempting
to influence the survey decision making process, or the AO's survey
follow-up activities by attempting to discuss the facility with the
survey team, such as explaining the facility's policies and procedures
to the survey team, or even actively advocating on the facility's
behalf, potentially influencing their analysis of observed survey
results.
An AO surveyor, owner, or other employee that has an interest in or
relationship with a health care facility the AO accredits might have
additional motivation to improperly give that health care facility
notice about the survey ahead of the scheduled survey date. Surveys are
required to be unannounced to prevent the facility from preparing for
the survey by activities such as unusual cleaning activities, painting,
clearing obstructions from halls and entrances, covering up and hiding
deficiencies, coaching staff, and otherwise preparing in advance for
the survey. If the survey is unannounced, the health care facility is
not able to make advance preparations so that the survey team is able
to assess the facility in its usual condition and observe the typical
standard of care provided.
We propose to add a new requirement at Sec. 488.8(k)(1) to
prohibit AOs from allowing AO owners, surveyors, or other employees
from participating in the survey and accreditation process for health
care facilities with which they have had an interest or relationship
within the previous 2 years. At proposed Sec. 488.8(k)(1) we would
require that if an AO owner, surveyor or other employee has an interest
in or relationship with a health care facility accredited by the AO,
they would be prohibited from: (1) participating in the survey of that
health care facility (proposed Sec. 488.8(k)(1)(i)); (2) having input
into the results of the survey and accreditation for that health care
facility (proposed Sec. 488.8(k)(1)(ii)); (3) having involvement with
the pre- or post-survey activities for that health care facility
(proposed Sec. 488.8(k)(1)(iii)); or (4) having contact with or access
to the records for the survey and accreditation of that health care
facility (proposed Sec. 488.8(k)(iv)). Proposed Sec.
488.5(a)(10)(iii) lists proposed prohibited interests in or
relationships with a health care facility accredited by the AO, which
would include, but not be limited to, the following situations: (1)
being employed as a SA surveyor; (2) being employed in a health care
facility that is accredited by the AO; (3) having an ownership interest
in a health care facility that is accredited by the AO; (4) serving as
a director of or trustee for a health care facility that is accredited
by the AO; (5) serving on a utilization review committee of a health
care facility that is accredited by the AO; (6) accepting any fees or
payments from a health care facility or group of health care facilities
that is/are accredited by the AO; (7) accepting fees for personal
services, contract services, referral services, or for furnishing
supplies to a health care facility that is accredited by the AO; (8)
providing consulting services to a health care facility that the AO
accredits; (9) having members of an immediate family engaged in any of
the above activities; or (10) engaging in any activities during the
course of the survey of the facility that would be or cause a conflict
of interest.
We propose at Sec. 488.8(k)(2) to define the term ``immediate
family member'' as any person that has a lineal familial or marital
relationship with the AO owner, surveyor or other employee. Immediate
family members would include a husband or wife, birth or adoptive
parent, child, or sibling; stepparent, stepchild, stepbrother, or
stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law; grandparent or grandchild; and spouse
of a grandparent or grandchild. This definition is consistent with the
definition used for the home health and hospice conflict of interest
requirements. This definition is required for the purposes of Sec.
488.8(k)(1), which states that a conflict of interest can also exist
when an AO owner, surveyor or other employee has an interest in or
relationship with a health care facility the AO accredits.
Allowing an AO owner, surveyor or other employee that has an
interest in or relationship with a health care facility the AO
accredits would not only be inappropriate but could result in
inaccurate survey results and/or preferential treatment of the
facility.
C. Proposal To Require the AOs That Accredit Medicare-Certified
Providers and Suppliers To Use Medicare Conditions; and Strengthened
Survey Process Comparability (Proposed Sec. 488.4(a)(1) and (2))
Section 1865(a)(1) of the Act requires that if the Secretary finds
that the requirements for accreditation from an accreditation
organization demonstrates that a provider entity meets or exceeds all
applicable conditions, the Secretary must deem such requirements to be
met by the provider entity. However, the statutory language of ``meets
or exceeds'' currently allows AOs to develop standards that are more
stringent than those of Medicare. When an AO applies for ``deeming
authority'',
[[Page 12012]]
we determine whether those standards meet or exceed ours. In accordance
with Sec. 488.5(e), CMS publishes a proposed rule when CMS receives a
complete application from a national accrediting organization seeking
CMS's approval of an accreditation program. The proposed notice
identifies the organization and the type of providers or suppliers to
be covered by the accreditation program and provides 30 calendar days
for the public to submit comments to CMS. CMS subsequently publishes a
final notice, rendering its decision to either approve or disapprove a
national accrediting organization's application, within 210 calendar
days from the date CMS determines the AO's application was complete.
The final notice outlines a summary of the findings of CMS's review and
any corrective action which was required to be taken by the AO in order
to be considered to meet or exceed our standards, or comparable survey
processes. When CMS approves or reapproves an accrediting organization
for deemed status, the approval may not exceed 6 years.
We are concerned that the current application review processes
under Sec. 488.5 does not go far enough. Some of our concerns with the
efficacy of the AO application review process are based on the results
of the initial and renewal applications and the SA findings, as noted
below:
<bullet> AO Application Reviews: Between 2017 to September 2021, we
received a total of 22 AO applications for review. After review of
these applications, we returned all 22 applications to the AOs because
we found that the AOs' standards were not comparable to ours. AO most
common standards requiring revisions to meet or exceed Medicare
conditions included: governing body, physical environment, emergency
preparedness patient rights, medical/clinical records and care
planning. Additionally, AO standards regarding coordination of
services; skilled professional services; infection control; staff
responsibilities and quality improvement assessment programs (QAPI) all
required revisions by the AOs.
<bullet> SA Findings: In FY 2019, CMS conducted 119 hospital
surveys (including psychiatric hospitals) and 196 non-hospital surveys
totaling 315 validation surveys. In FY 2019, the SAs found serious
``condition-level'' instances of non-compliance 60 times in accredited
hospitals (including psychiatric hospitals), and 51 instances in which
the AO missed the deficiencies. In these instances, even though the AOs
did not find comparable levels of non-compliance, this non-compliance
was sufficient to start enforcement proceedings against the subject
hospitals. These results demonstrated that the AOs may have failed to
ensure their facilities were meeting Medicare's minimum standards. In
total, between FY 2017 and FY 2019, CMS conducted 363 hospital
(including psychiatric hospitals) validation surveys, with SAs
identifying condition-level non-compliance a total of 185 times and 158
instances in which the AOs missed comparable deficiencies. Between FY
2017 and FY 2019, CMS also conducted a total of 369 validation surveys
for HHAs and Hospices, with SAs identifying condition-level non-
compliance a total of 57 times and 50 instances in which the AOs missed
comparable deficiencies.\10\ This data has amplified CMS' concerns
related to the comparability of survey processes as well as the need
for increased AO oversight.
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\10\ FY 2020 Report to Congress (RTC): Review of Medicare's
Program Oversight of Accrediting Organizations (AOs) and the
Clinical Laboratory Improvement Amendments of 1988 (CLIA) Validation
Program <a href="https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf">https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf</a>.
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Therefore, under the statutory authority granted to us under
section 1865(a)(1) of the Act, we propose revisions at Sec.
488.4(a)(1) to require that the AOs that accredit Medicare-certified
providers and suppliers use the applicable Medicare conditions as their
minimum accreditation standards. This means that the AOs must
incorporate the Medicare conditions identical to our regulations within
their accreditation standards for their deeming programs. However, AOs
would be allowed to use additional accreditation standards that exceed
the Medicare conditions, as permitted under section 1865(a)(1) of the
Act. We would, however, require the AOs' to clearly delineate their
additional accreditation standards that exceed the Medicare conditions
when seeking CMS approval for deeming authority.
The requirement that the AOs identify the Medicare conditions as
their accreditation standards would also allow providers and suppliers
to know what the minimum Medicare deeming standards are and where the
AO standards exceed these standards through its accreditation program,
as permitted under section 1865(a)(1) of the Act. Facilities are
expected to comply with regulatory requirements of CMS and the
accreditation standards of the AO, however we have found that in
certain circumstances, the facilities were more familiar with AO
standards and did not fully understand the AO standards are more
stringent than the Medicare conditions. There were several instances in
which our comparability review of AO standards under Sec. 488.5
resulted in the need for AOs to correct deficiencies in their survey
standards and processes, because we determined that the minimum
Medicare conditions would have not been adhered to. Despite these
frequent reviews, the regulations only require AO standards to be
comparable, not exact to the Medicare conditions, therefore increasing
the likelihood of gaps in interpretation.
This proposed requirement would increase the likelihood that AO
standards and processes would meet or exceed our regulatory
requirements and transparency for providers to understand when the AO
has more stringent standards, further explained in sections IV.D of
this proposed rule.
We also propose to strengthen our process for comparability review
of the AOs survey processes at proposed Sec. 488.4(a)(2), further
explained in sections IV.E and IV.F of this proposed rule. More
specifically, we propose to re-designate existing paragraph (a)(1) as
(a)(3) and re-designate existing paragraph (a)(2) as (a)(4) with
revisions, and add a new requirement at Sec. 488.4(a)(1). This
provision would require the AOs that accredit Medicare-certified
providers and suppliers to use the exact text of the applicable
Medicare conditions set forth in the applicable CMS regulations for
each provider and supplier type as their minimum accreditation
requirements. However, the AOs would be free to establish additional
accreditation requirements that exceed Medicare conditions as permitted
by section 1865(a)(1) of the Act. We propose to add language at Sec.
488.4(a)(2) that AOs use a survey process comparable to the processes
set out for SAs in the SOM and approved by CMS, as outlined throughout
Sec. 488.5(a)(4). We also propose that these requirements and changes
at paragraphs (a)(1) and (2) would be applicable beginning 1 year from
the effective date of the final rule.
These proposed changes to Sec. 488.4(a)(1) and Sec. 488.4 (a)(2)
would align national health and safety standards across all AOs and
strengthen the survey processes used by the AOs. We further believe
that our proposal would ensure uniformity and transparency of the
surveys performed by the AOs for deeming purposes and improve CMS'
ability to accurately evaluate an AO's performance.
We propose to re-designate the current Sec. 488.4(a)(1) and (a)(2)
to Sec. 488.4(a)(3) and (a)(4). We also propose
[[Page 12013]]
to add requirements at paragraphs (a)(1) and (a)(2) that AOs
incorporate the Medicare conditions and use survey processes comparable
to those of the SA. We also refer readers to additional proposed
changes made to Sec. 488.4(a)(4) in section VI.O of this proposed
rule.
The proposal to require AOs to incorporate the Medicare conditions
(as defined in Sec. 488.1) as their minimum accreditation standards
would become applicable 1 year after the effective date of the final
rule.
D. Proposal To Revise the Crosswalk Requirements at Sec. 488.5(a)(3)
As a result of our proposal at Sec. 488.4(a)(1) to require the AOs
to incorporate the Medicare conditions (as defined in Sec. 488.1) into
their accreditation standards for their deeming programs, we would also
modify the regulations at Sec. 488.5 that would be affected by this
requirement. Section 488.5(a)(3) requires the AOs to submit with their
initial and renewal application, ``[a] detailed crosswalk (in table
format) that identifies, for each of the applicable Medicare conditions
or requirements, the exact language of the organization's comparable
accreditation requirements and standards.'' Because section 1865(a) of
the Act allows AOs to have accreditation standards for their deeming
programs that meet or exceed the Medicare conditions, the content,
format, and wording of AOs' accreditation standards frequently differ
significantly from that of the Medicare conditions. Therefore, we
require the AOs to provide a crosswalk which identifies the applicable
Medicare conditions that corresponds to each of the AO's accreditation
standards. The purpose of this crosswalk is to help us determine to
which Medicare condition each AO accreditation standard corresponds.
Since we proposed at Sec. 488.4(a)(1) to require the AOs to
incorporate the Medicare conditions into their accreditation standards,
it would no longer be necessary to require the AOs to submit a
crosswalk that provides ``comparable'' standards. Instead, we propose
that AOs would need to provide a crosswalk which demonstrates that the
AO has incorporated the language of the Medicare conditions, as well as
provide the AO standards which exceed the Medicare conditions (see
Table 2 in section VI.B.I of this proposed rule for an example).
Similar to the existing process for submission of the AO's crosswalk
during an application, we propose to revise Sec. 488.5(a)(3) to
require a crosswalk that demonstrates the AO's use of CMS's
requirements and standards. AOs would provide additional or exceeding
standards under their use of the required exact language and annotate
the exceeding standards. This would further allow providers and
suppliers to know what the minimum Medicare deeming standards are and
where the AO standards exceed these standards through its accreditation
program.
We propose to revise Sec. 488.5(a)(3) to first remove the
requirement that the AO provide a ``comparable'' standard for each of
the applicable Medicare conditions or requirements and replace it with
the '' incorporation of the CMS requirements in the AO accreditation
standards for any deeming program.'' Second, in the application that is
submitted to CMS for review, the AO would have to submit a detailed
crosswalk. We would not expect the AOs to use the same survey tags (a
letter/number identifier, for example, A-0001) as used by SA surveyors.
For example, CMS' regulatory requirement at Sec. 482.11(c) requires
hospitals to ``assure that personnel are licensed or meet other
applicable standards that are required by State or local laws.'' In
this example and aligned with our proposed provisions, the AO would be
required to have an accreditation standard for its hospital deeming
program which would state ``The hospital must assure that personnel are
licensed or meet other applicable standards that are required by State
or local laws,'' with the AOs applicable standard number. Using Table 2
in section VI.B.1 of this proposed rule for this example, the crosswalk
would appear as follows:
[GRAPHIC] [TIFF OMITTED] TP15FE24.000
As seen in this example, the AO standard number identification may
vary from CMS' CFR regulatory citation. Additionally, as previously
described, CMS is not restricting AOs from exceeding the Medicare
conditions. Therefore, if an AO believes that additional accreditation
standards would need to apply to their deemed facilities, an AO would
submit the exceeding requirements under the particular standard. Using
the same example, the AO would submit a crosswalk similar to the
example below. As seen, AO Standard Number XX.001 would be exceeding
the Medicare conditions.
[[Page 12014]]
[GRAPHIC] [TIFF OMITTED] TP15FE24.001
Establishing a consistent standard across all AOs would bring
transparency to the accreditation process. This would allow providers
and suppliers to know what the minimum Medicare deeming conditions are
and where the AO standards exceed these Medicare conditions through its
accreditation program. It would also provide greater uniformity between
an AO certification survey at a facility and a state survey that may be
subsequently performed at that same facility, which could include a
complaint survey or a validation survey.
Additionally, from CMS' oversight perspective of the AO
applications for deeming authority and review of the crosswalks over
the last several years, we have also identified that AOs have
inadvertently omitted certain standards in their crosswalk submissions.
Therefore, while the impression that requiring a crosswalk for AOs may
seem unnecessary as we would be requiring AOs to incorporate the
Medicare conditions into their accreditation standards, it is
imperative that CMS be able to ensure the AO has standards for each
Medicare condition. The review of the exceeding standards is also
critical for CMS to ensure that any additional requirements established
under accreditation for deemed providers or suppliers do not conflict
with the Medicare conditions.
We propose that the proposed provision would be applicable 1 year
after the effective date of the final rule.
E. Proposal To Strengthen the Comparability of the Survey Process
Between the AOs and the States
An AO must demonstrate to CMS that it has the ability to
effectively evaluate a health care facility's compliance with the
Medicare conditions using survey processes that are comparable to those
survey methods, procedures, and forms required by CMS and as
implemented by the SAs. A general description of SAs' survey processes
are set out at Sec. 488.26 and specified in the SOM.
As part of the application process as set out at Sec. 488.5, CMS
is required to complete a survey processes review as part of the AO
application review process. The purpose of the survey processes review
is to determine whether the AO's survey processes are comparable to the
CMS survey processes. The survey process comparability review is done
by reviewing information in the application, such as, the AO's survey
activity guides, organizational procedures for surveyors, surveyor
training materials and AO survey requirements. CMS also conducts an in-
person observation of an AO survey (carried out by a CMS survey
observation team) as part of CMS' review of an AO's application. The
purpose of the survey observation is to ensure that the AO surveyors
follow the processes set out in the application and to ensure that the
AO surveyors evaluate all Medicare requirements.
Sections 1865(a)(1) and 1865(a)(2) of the Act require us, when
making this finding, to consider a national AO's ``survey procedures''
and ``. . . its ability to provide adequate resources for conducting
required surveys and supplying information for use in enforcement
activities, its monitoring procedures for provider entities found out
of compliance with the conditions or requirements. . . .'' Our
longstanding requirements at Sec. 488.4(a)(3) implemented this
statutory provision by requiring AOs to provide us with detailed
information on their survey processes, and our regulations at Sec.
488.5 and Sec. 488.8 set out the procedures for comparability review.
We further discussed AO survey procedures' comparability to our SA
survey processes and the SOM in the May 22, 2015 final rule published
in the Federal Register, entitled ``Medicare and Medicaid Programs:
Revisions to Deeming Authority Survey, Certification, and Enforcement
Procedures'' (80 FR 29795) (hereinafter referred to as the ``2015 AO
final rule''). We assess comparability by reviewing the information in
the AO's application in light of the SOM survey process requirements
for SAs, which implements the survey process requirements found in
parts 488 and 489 of our regulations. The role of the SOM is to provide
explicit guidance on the process to assess providers' and suppliers'
compliance with our regulatory requirements. We do however note, that
the AOs are already required to submit the documentation and that most
AOs provide this within their applications, therefore we do not believe
this imposes any additional burden on the AOs, as this has been a long-
standing expectation as described in the preamble of this proposed rule
and the 2015 AO final rule (80 FR 29795) which stated that while the
explicit reference to the SOM was removed, ``this will not change our
practice of assessing comparability in light of the SOM survey process
requirements for SAs, which implement survey process requirements found
in parts 488 and 489 of our regulations governing certification and
provider agreements.
[[Page 12015]]
As previously noted, CMS received 22 AO applications between
January 2017 and August 2021. Of those 22 applications, 14 were
returned to the AO for revisions to the AO's survey processes and
policies, distinct from the finding that all 22 AO's standards were not
initially comparable with the Medicare conditions. These required
survey process revisions included ensuring all surveys were unannounced
in accordance with Sec. 488.5(a)(1)(i), which we discuss in section
IV.A of this proposed rule. Other applications were returned for
inconsistencies with our patient or representative complaint processing
guidance set out in chapter 5 of the SOM. Additionally, among these 22
applications, we identified concerns within the AO survey processes
during the on-site survey observations, as authorized under Sec.
488.8(h). The following concerns were noted during the survey
observations for these 22 applications:
<bullet> The survey citations and rationales for citing or not
citing ``Governing Body'' Medicare condition violations (for example,
42 CFR 482.12) were inconsistent with CMS' SA survey methodologies;
<bullet> The AO's failure to enforce the deadlines by which
facilities must come into compliance after receiving adverse survey
results;
<bullet> Conflicting timeframe(s), such as the required number of
days required to conduct follow-up activities, including follow-up
surveys, for facilities that have previously demonstrated non-
compliance at the condition-level; and
<bullet> Incorrect number of medical records reviews during a
survey. (CMS requires that AO surveyors review a specific number of
medical records, based on the facilities' patient volume, to ensure the
surveyor have an accurate picture of patient care services provided
within the facility).
CMS' concerns about the failures of AOs to conduct in-depth
investigations; the lack of consistency and comparability exhibited by
our having to return all received AO applications for corrections in
survey standards and processes; the excessive frequency of disparate
findings between AOs and SAs, as further explained in section IV.I of
this proposed rule; and the failure to review medical records, as
required by SA procedures, all strengthen our resolve to ensure
consistency in AO performance. Our initial and renewal application
reviews are the foundation for our oversight of AOs to determine the
AO's ability to ensure facilities adhere to minimum Medicare
conditions.
Because of these disparities, we propose to strengthen our
requirements under Sec. 488.5. We refer readers to our discussion of
these proposals found in section IV.F of this proposed rule, that would
require AOs that accredit Medicare-certified providers and suppliers to
use a survey process that is comparable to the survey processes and
procedures used by CMS and the SA. We note that this has been the
expectation under the existing requirements, as a condition of
obtaining and retaining deeming authority. We propose to increase the
specificity of our application and reapplication requirements for
national AOs to improve documentation that would demonstrate this
comparability.
F. Proposal To Revise the AO Application Documentation Requirements
Related to the Survey Processes (Sec. 488.5(a)(4); Sec.
488.5(a)(4)(iii); Sec. 488.5(a)(4)(v); Sec. 488.5(a)(4)(vii); Sec.
488.5(a)(4)(xi); Sec. 488.5(a)(5); Sec. 488.5(a)(6); Sec.
488.5(a)(12); Sec. 488.5(a)(13))
To achieve our goal to require the AOs to use a survey process that
is comparable to that used by CMS and the SAs (and in alignment with
our proposal at Sec. 488.4(a)(2) regarding comparable survey
processes), we propose the following revisions and additions to the
existing AO application regulation requirements.
1. Proposed Revisions to Sec. 488.5(a)(4)(Description of Survey
Process)
At Sec. 488.5(a)(4), we propose to add language which includes
what we believe to be the core fundamental activities of the survey
process, such as pre survey preparation; offsite preparation; entrance
interview and activities; information gathering and investigation,
analysis of information; exit conference; post-survey activities; and
statement of deficiencies-related activities. These are processes used
by the SA which are needed to ensure that a Medicare-participating
provider or supplier receives an unbiased, independent survey.
We have observed, both in our on-site observation of AOs during the
existing process set out at Sec. 488.8(h), as well as during the VRP
pilot conducted 2018 through 2019, that AOs often provided daily
briefings to and had frequent discussions with the management of the
surveyed facility whose purpose was not clearly described in the AO's
applications. We noted that these ``meetings'' with facility management
impeded or did not allow for sufficient time for the survey team to
complete survey activities, such as direct observations or interviews.
Therefore, the proposal to add the core activities, as well as the
revisions outlined below, would further strengthen comparability
between SAs and AOs, while continuing to allow for flexibilities in the
survey processes used by AOs. These requirements, as revised, shall
become applicable beginning [date 1 year after the effective date of
the final rule].
2. Proposed Revisions to Sec. 488.5(a)(4)(iii) (Documentation of
Surveyor Forms and Guidance)
Section 488.5(a)(4)(iii) currently requires that AOs applying for
deeming authority provide, among other documentation, copies of the
organizations survey forms, guidelines and instructions to surveyors.
We propose to be more specific about the level of detail we require
from the survey instructions and guidance the AO provides to us when
seeking our approval. Specifically, we propose to require detailed
information regarding how the AO surveys for facility compliance with
the following core activities or standards within the Medicare
Conditions, such as: Governing Body; Patient Rights; Emergency
Preparedness; Quality Assessment and Performance Improvement; Medical
Staff; Nursing Services; Medical Records Services; and Infection
Control. These core activities and standards are part of every state
survey and based on Medicare Conditions. With respect to each of these
survey subject areas, we would require the applying AO to provide
documentation on the instructions it provides for surveying these
Medicare conditions, including survey probes, interview questions, and
methods for their own review of facility documentation pertaining to
these Medicare conditions.
It has become evident through our validation and comparability
reviews of AOs that the documentation we currently request from them no
longer suffices to adequately determine whether the AO surveyors are
investigating these Medicare conditions sufficiently to ensure the
health and safety of Medicare beneficiaries and other patients. AOs
have failed to survey adequately for facility compliance with their
respective documentation requirements, including specific standards or
survey processes. We also propose that AOs submit their patient and
staff interview questions. By having access to these questionnaires, we
would be able to determine whether there are gaps in the survey
processes
[[Page 12016]]
which are leading to the disparity findings, as we have seen in our
validation surveys.
3. Proposed Revisions to Sec. 488.5(a)(4)(v) (Survey Review Process)
At Sec. 488.5(a)(4)(v), we propose to add additional areas
clarifying and strengthening the requirement that AOs provide a
description of their document review processes in their approval
applications. We propose to add that AOs must describe processes and
surveyor procedures related to the review of medical records, medical
staff credentialing procedures; personnel files (including staff
competency); and the number of patient observations, patient interviews
and staff and facility interviews.
We have noticed that many AOs fail to review adequate numbers of
records for the provider/supplier type involved. In the review of the
22 AO applications received between 2017 and September 2021, a total of
nine AOs were identified to have not reviewed the adequate number or
records. Additionally, we have observed that some AO survey practices,
such as interviewing patients in non-confidential settings, and
deficient complaint investigations, undermine the integrity and
accuracy of AO surveys. We are concerned that staff or patients may not
be honest and candid if another facility staff member or supervisor is
present during interviews. The expectations are that interviews are
conducted privately with staff. For example, in Appendix A of the SOM,
we explicitly require surveyors to ``Explain that all interviews will
be conducted privately with patients, staff, and visitors, unless
requested otherwise by the interviewee.'' Privacy in interviews with
staff is important and encourages the likelihood of honest feedback
about an organization. Additionally, we also identified a few (three of
22 applications) during our survey observations of AOs onsite,
instances in which the AO did not observe actual performance of
medication administration, wound care or other services provided by the
accredited facility, and most observations within the hospital setting
were surgical time-outs (part of the Universal Protocol and performed
in the operating room, immediately before the planned procedure is
initiated). In one instance, the AO failed to ask the facility for any
patient/representative complaint information, which indicates that the
AO failed to conduct any investigation as to how the facility manages
complaints and grievances. These specific examples raise concern in
that the AO survey process does not sufficiently ensure safe practices
for patients.
Furthermore, as noted in our discussion of proposed Sec.
488.5(a)(4)(iii), we have also identified multiple instances in which
the AOs have conducted limited review of facilities' staff
credentialing and competency testing activities. For instance, in one
survey observation, we observed that the AO reviewed the personnel
files of only one licensed practical nurse (LPN) and one phlebotomist,
and did not review any personnel files for RNs, pharmacists, or
dietitians, as outlined in Appendix A of the SOM, which we consider to
be critical staff for this provider setting. In another survey, the AO
determined that nursing staff were not documenting chains of custody of
narcotic medications, but failed to review the facility's
pharmaceutical policies and procedures, and conducted no interviews of
pharmacy staff. In such circumstances where a category of documentation
was missing from the facility's record, we would mandate that the AO or
SA conduct further investigations to determine the reason for the
lapse.
4. Proposed Revision to Sec. 488.5(a)(4)(vii) (Correction of
Identified Non-Compliance)
At Sec. 488.5(a)(4)(vii), we propose to add additional language to
the existing requirement that the AO must provide us with descriptions
of their procedures and timelines for monitoring the provider's or
supplier's correction of identified non-compliance with the
accreditation program's standards. We believe this requirement is not
specific enough for enforcement; we have regularly had to request
revisions of documents submitted by AOs during our review of
applications and re-applications over the years. We propose to clarify
this language by adding the requirement that AOs must also include
documentation related to dates established by the AO and how those
accreditation dates are determined by the AO when deficiencies may be
found during initial and reaccreditation surveys, as well as the AOs
process for accreditation decisions based on survey findings. We also
propose to require the AOs to provide as part of this standard, their
investigative and organizational process which the AO uses to make
determinations on accreditation or the removal of accreditation and
recommendation to the Survey Operations Group (based out of the various
CMS Survey and Enforcement Division Locations) to remove deemed status
of the non-compliant facility. We have also proposed additional changes
at Sec. 488.5(a)(4)(viii) and refer readers to section IV.G ``Proposal
to Require AOs to Provide CMS with Survey Findings'', of this proposed
rule.
5. Proposed Revisions to Sec. 488.5(a)(4)(xi) (AO Training and
Education Programs)
At Sec. 488.5(a)(4)(xi), we propose to add a new requirement to
require AOs to provide CMS with documentation summarizing their staff
training programs, whether web-based or via methods such as Power Point
presentations or hard-copy materials, which would provide an overview
of how they train surveyors to follow their survey processes, and,
where applicable, highlight differences from CMS survey processes.
Currently, CMS receives limited training materials the AO provides to
its surveyors; therefore, when conducting survey observations as under
our authority at Sec. 488.8(h), it is often challenging to understand
differences in survey processes. We may receive an AO's printed
materials for training and/or downloaded versions of electronic
surveyor training platforms; however, these materials vary. These
materials indicate that some AOs collect employees' oral evidence for a
survey, as opposed to a more document-focused review done by the SAs.
AOs' applications do not always provide us with the entire scope of
surveyor education the AO provides to its surveyors, therefore
challenging our review of comparability. The current regulation at
Sec. 488.5(a)(8) only requires the AO to give us ``[a] description of
the content and frequency of the organization's in-service training it
provides to survey personnel.'' CMS frequently asks AOs to submit
additional training and education materials during the application
review processes. Requesting the AOs' staff training programs and
documentation as outlined in the proposal will provide CMS with greater
enforcement capabilities and allow CMS to assess the AOs' consistency
in training against those of required by the SAs. Additionally, because
we review AO applications for comparability to CMS survey processes,
this additional information would be invaluable to CMS' better
understanding of the AOs' survey processes prior to conducting a survey
or during the validation or proposed direct observation process, as
discussed in sections II.D and IV.K.3 of this proposed rule.
6. Proposed Revisions to Sec. 488.5(a)(5) (Composition of Survey Team)
At Sec. 488.5(a)(5), we propose to add requirements which describe
the AOs'
[[Page 12017]]
minimum criteria for determining the size and composition of survey
teams for the facilities they accredit. We propose to require the AO to
provide us with documentation describing the criteria or process by
which the AOs determines the makeup of their survey teams, based on:
(1) the size of the facility to be surveyed, based on average daily
census; (2) the complexity of services offered, including outpatient
services; (3) the type of survey to be conducted; (4) Whether the
facility has special care units or off-site clinics or locations; (5)
Whether the facility has a historical pattern of serious deficiencies
or complaints; and, (6) Whether new surveyors are to accompany a team
as part of their training.
Our on-site survey observation of AO surveyors has found some
concerning practices. For example, we understand some AOs use time
limits on the length of their investigations, which can limit the depth
and accuracy of the investigation. One AO also only permitted a 2-day
period in which to conduct a survey of a critical access hospital
(CAH), whereas the policy of the SA is based on the scope of services
provided by the provider, type of survey to be conducted, complexity of
services offered and whether the facility has off-site locations. The
AO's policies did not allow for flexibility to have the survey exceed 2
days, which would likely not allow for all departments to be surveyed,
or in the event of an immediate jeopardy or condition-level non-
compliance finding, for an investigation to be conducted. While
fortunately no condition-level no-compliance was identified, the strict
AO policy on timeframe of survey conflicts with the intent to complete
the investigative process and did not allow for flexibility in survey
length. It appears based on this example that at least one AO may not
be giving considerations to the size and number of outpatient
departments or provider-based locations per facility and the need to
investigate immediate jeopardy or condition-level non-compliance when
deciding on time limits for surveys. Additionally, some AOs have not
always ensured surveys are conducted on all off-site locations that are
still certified under the main campus or facility CCN as is required
for SAs in accordance with Appendix A of the SOM--Survey Protocol,
Regulations and Interpretive Guidelines for Hospitals, Survey Protocol,
Task 3 (``Information Gathering/Investigation''). This proposed
provision would be effective one year following the publication of the
final rule.
Clarifying these minimum expectations would help AOs meet Medicare
conditions and create more consistency between the approaches used by
AOs and the SAs.
7. Proposed Revisions to Sec. 488.5(a)(6) (Adequate Number of
Surveyors for Size of Facility)
At Sec. 488.5(a)(6), we propose to add language to the existing
requirement that requires the AO to provide documentation demonstrating
the overall adequacy of the number of the organization's surveyors,
including how the organization will increase the size of the overall
survey staff to match growth in the number of accredited facilities
while maintaining regular re-accreditation intervals for existing
accredited facilities. We propose to add language demonstrating that
the AO has enough surveyors to ensure that a sufficient amount of time
can be allotted to its clients to complete all survey activities.
Through our direct observations as part of the application process,
we identified several instances in which the scope of document reviews
was limited and the content of medical records was not thoroughly
reviewed, because it seems the AO surveyors did not have enough time to
review records. This may be a systemic issue across AOs. This proposed
provision would be effective 1 year following the publication of the
final rule.
8. Proposed Revisions to Sec. 488.5(a)(12) (Complaint Survey
Documentation Requirements)
At Sec. 488.5(a)(12), we propose to add additional elements
critical to the AOs' effective investigation of complaints about their
client facilities. Specifically, we propose that the AO in its
application documents for CMS approval of its deeming authority would
also have to include: (1) a description of its process for triaging and
categorizing complaints about the surveyed facility; (2) timeframes for
responding to complaints and a method to track and trend complaints
(for example, frequency of similar complaints, complaint type, etc.)
received with respect to the AOs accredited facilities; (3) procedures
and persons responsible for the review of plans of corrections; and
procedures for follow up if the plans of corrections are not adequate;
(4) AO requirements for plans of corrections for standard level
deficiencies; (5) follow up survey procedures and monitoring of
condition-level findings; (6) procedures for addressing immediate
jeopardy deficiencies; and (7) sharing of previous deficiency findings
or complaints with survey teams. The existing regulatory requirement
for the AO to provide procedures for responding to, and investigating,
complaints against accredited facilities, including policies and
procedures regarding referrals is insufficient. Of our 19 AO initial
and renewal applications received in the past years, CMS has requested
additional AO documentation for this particular standard in order to
adequately assess the comparability of survey processes. Strengthening
the language will bring greater clarity as to the expectations for
documents to the AO submitting an initial or renewal application.
9. Proposed Revisions to Accreditation Decision-Making Policies and
Reporting Sec. 488.5(a)(13)
At Sec. 488.5(a)(13), we propose to re-designate existing
paragraph (ii) to (iii) and add two new paragraphs at (ii) and (iv).
The section currently requires an AO applying or re-applying for
deeming authority to provide CMS with a description of its processes
for accreditation status decision making. The proposed revision would
require the AO to document its specific policies and procedures for
reporting accreditation decisions to CMS, including timeframes for
notification. Additionally, we propose to require the AO to submit
specific documentation describing how it will inform us when one of the
facilities they accredit withdraws from accreditation. This
communication is necessary since it alerts us that such facility will
need to be surveyed by the SA next time. By requesting this additional
information related to accreditation decisions made by the AOs, as well
as reviewing documentation on how the AO notifies their facilities and
CMS and our SAs of a facility withdrawing from the AO, CMS will
strengthen the existing requirements and would create a more
consistent, uniform review of the AO survey process for comparability.
We also believe by requiring this information, we will be able to
review the AOs' processes for reporting. Additionally, we will also be
able to identify under what circumstances an AO maintains accreditation
of a facility versus the potential CMS decision to drop deeming
authority. We have found in several instances that even in light of
serious health and safety deficiencies and CMS's removal of deeming
authority, a facility can still remain accredited, which may provide an
untrustworthy perception to the public that the facility has no health
and safety concerns. When CMS provides deeming
[[Page 12018]]
authority to an AO, the expectation is that its standards meet or
exceed Medicare conditions and that surveys are comparable to those of
the SAs, which is not the case for accreditation versus deeming.
Facilities may voluntarily end their deeming and accreditation from an
AO or be involuntarily removed from deeming authority. When this occurs
under the deeming process, the facility is placed under the SA's
jurisdiction, meaning the SA will survey and monitor the facility for
compliance with federal requirements. However, in situations where the
facility's deemed status is removed involuntarily for non-compliance,
yet the AO continues to accredit the provider, CMS believes the public
perception is that these facilities are still meeting or exceeding the
requirements for Medicare, which may not be true.
Through the establishment of a more rigorous and comprehensive
survey process review during the required application and renewal
process, our concerns regarding insufficient compliance would be
addressed. The proposed additional and revised requirements would
ensure a more uniform assessment and improve our evaluation of AO
performance to ensure that surveys conducted by AOs are comprehensive
and fully examine all Medicare conditions. We also believe that
codifying these detailed documentation requirements in regulation would
establish a consistent standard across all AOs and would bring
uniformity and transparency to the accreditation process.
We propose that the provisions clarifying the existing requirements
to require AOs that accredit Medicare-certified providers and suppliers
to provide us with more detailed descriptions of their survey processes
and procedures would become applicable 1 year from the effective date
of final rule.
G. Proposal To Require AOs To Provide CMS With Survey Findings (Sec.
488.5(a)(4)(viii))
General AO survey findings are entered into a CMS database known as
the Accrediting Organization System for Storing User Recorded
Experiences (ASSURE). This database collects general information about
the accreditation survey, such as, date, survey findings and severity
of problems indicated by the findings. It generally does not include
actual survey reports. Currently AOs provide a limited set of data for
surveys within the ASSURE database. We use this information in
addressing administrative program elements, and in assessing AO
performance. While we have the authority to request this information
from the AO, we generally do so only when we determine that it is
necessary for follow-up. To date, we have not consistently required the
AOs to submit copies of their survey reports and related information.
We propose to modify Sec. 488.5(a)(4)(viii) to require that AOs
provide all survey reports to CMS, which would not be disclosed except
as permissible by statute, pursuant to subsection 1865(b) of the Act.
AOs would be required to submit a statement that organization agrees to
provide with a copy of all survey reports, including but not limited
to, initial, re-survey, and complaint survey reports, and/or any other
information related to survey activities as CMS may require (including
corrective action plans) as part of its initial and renewal
applications, or upon CMS request. The proposed revision to Sec.
488.5(a)(4)(viii) would expand the requirement from the current
requirement that AOs provide survey reports from applicants seeking
initial participation in Medicare (with other surveys only upon
request). Under our proposal, we would have access to any survey
reports, including initial, reaccreditation, complaint surveys, and
corrective action plans that CMS may require. These reports, like those
of survey agencies, would assist CMS in program analysis of tracking
citations issued to accredited facilities to determine whether there is
a concern with an AO's performance. Similarly, these reports would
assist in reviewing disparate findings in which the SA may have cited a
deficiency within an accredited facility that the AO failed to
recognize.
Current Sec. Sec. 488.5(a)(4)(viii) and 488.5(a)(11)(ii) allow CMS
to receive copies of the AOs' survey reports. However, CMS is
prohibited by section 1865(b) of the Act as well as Sec. 488.7(b) from
disclosing these surveys to the public, with the exception that CMS may
disclose such a survey and related information to the extent that they
are from home health agencies, or hospice programs, or pertain to an
enforcement action taken by CMS. Furthermore, the stem statement of
Sec. 488.7 requires that a Medicare participating provider or
supplier, in accordance with Sec. 488.4, must authorize its respective
AO to release to CMS a copy of its most current accreditation survey
including corrective action plans and any information related to the
survey that CMS may require.'' Section 488.7(b) further provides that
CMS may publicly disclose an accreditation survey and information
related to the survey, upon written request, but only to the extent
that the accreditation survey and survey information are related to an
enforcement action taken by CMS.
CMS has the authority under section 1875(b) of the Act as well as
regulations at Sec. 488.8(a)(1) to evaluate the performance of the AOs
through review of the organizations' survey activity. Through
consistent access to AO survey findings CMS would enhance our ability
to analyze survey findings and process, identify emerging quality of
care issues and patterns in AO survey findings, and, ultimately,
improve care for our beneficiaries.
As the proposal for revision to Sec. 488.5(a)(4)(viii) is being
made in connection with our proposal to require the AOs that accredit
Medicare-certified providers and suppliers to use the proposed revised
comparable survey processes and procedures, we propose that the
revisions to Sec. 488.5(a)(4)(viii) become applicable 1 year from the
effective date of the final rule.
H. Proposal To Require That AO Surveyors Must Take the CMS Online
Surveyor Basic Training
Prior to 2006, CMS offered basic surveyor training courses in a
traditional in-person classroom setting. Over time, we began providing
online basic surveyor training courses for each provider and supplier
type (ambulatory surgical centers (ASCs), hospitals, home health
agencies (HHAs), etc.), as well as training specific to writing skills
for surveyor documentation.
Basic training online courses are designed to provide surveyors
with the basic knowledge and skills needed to survey the respective
provider or supplier type for compliance with the Medicare conditions.
The online courses also help develop and refine surveying skills,
foster an understanding of the survey process, and enhance surveyors'
overall ability to conduct and document surveys. Courses are self-paced
web-based training. Users may access the online courses at any time and
have ongoing access to the course. This affords surveyors the
opportunity to refresh knowledge regarding Medicare conditions and
processes whenever necessary. The numbers of learners trained in online
courses have been steadily increasing since their inception.
Currently, the trainings are publicly available through the CMS
Quality, Safety & Education Portal (QSEP) website at <a href="https://qsep.cms.gov">https://qsep.cms.gov</a>. These trainings are free of charge for AO surveyors and
the public at large.
[[Page 12019]]
SA surveyors are required to take CMS program-specific trainings
along with SA-led orientation, field survey observations, and mentoring
as part of a comprehensive training and education program to assure an
adequately trained, effective surveyor workforce.
SAs perform validation surveys on a sample of providers and
suppliers (such as hospitals, CAHs, ASCs, and HHAs) accredited by the
AOs. Validation surveys compare the survey findings of the AO to those
of the SA to see if there are any disparities. The disparities found
between an AO's surveys and an SA's surveys is used in a performance
measure called the ``disparity rate'' and is tracked by CMS as an
indication of the quality of the surveys performed by the AO as
described earlier in this proposed rule.
The disparity findings between AO surveyors and SA surveyors may,
in part, be attributed to differences in surveyor training and
education, which varies from AO to AO, and may be inconsistent with the
CMS-provided SA surveyor training discussed earlier in this proposed
rule.\11\ We further believe that uniform surveyor training would
increase the consistency between the results of the surveys performed
by SAs and AOs, and have a positive impact on the historically high
disparity rates. The Fiscal Year 2020 ``Report to Congress: Review of
Medicare's Program Oversight of Accrediting Organizations (AOs) and the
Clinical Laboratory Improvement Amendments of 1988 (CLIA) Validation
Program,'' \12\ showed variation in overall disparity rates, by
provider type, as well as by the AO. For example, the disparity rate
from FY 2018 to FY 2019, hospitals, HHAs and ASCs had the only
decreases in disparity rates of all the program types, with a 5-
percentage point, 11-percentage point and 7-percentage point decrease
respectively. The disparity rates for psychiatric hospitals increased
by 7-percentage points from FYs 2018 to 2019. The disparity rates for
CAHs and hospices increased by 5-percentage points and 3-percentage
points respectively from FY 2018 to FY 2019. On November 4, 2021, we
published a final rule in the Federal Register, entitled, ``Medicare
and Medicaid Programs; CY 2022 Home Health Prospective Payment System
Rate Update'' (86 FR 62240). In that final rule, we finalized
implementing regulations to require AO surveyors to have successfully
completed the relevant CMS-sponsored basic hospice surveyor training
prior to conducting any hospice program surveys in accordance with
Division CC, section 407 of the Consolidated Appropriations Act of 2021
(CAA 2021) .
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\11\ <a href="https://qsep.cms.gov">https://qsep.cms.gov</a>.
\12\ The most recent Report to Congress may be accessed at:
<a href="https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf">https://www.cms.gov/files/document/qso-22-06-ao-clia.pdf</a>.
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In addition to the recent hospice program surveyor training
requirements, we propose to amend the provision at Sec. 488.5(a)(8) by
adding new paragraphs (a)(8)(i) to (a)(8)(iv), which would impose a new
training requirement on those surveyors working for AOs that accredit
Medicare-certified provider and suppliers. We note that we had
previously made a similar proposal in the calendar year (CY) 2019 Home
Health Prospective Payment System Rate Update proposed rule (83 FR
32470, July 12, 2018). However, we did not finalize this proposal, due
to commenters' concerns with course enrollment access and the amount of
time we estimated it would require for an AO surveyor to complete the
course.
CMS believes the concerns raised by interested parties during the
previous proposed rule comment period have been addressed by narrowing
the scope of the required training and providing additional details
regarding implementation. Therefore, we are again making this proposal
to address the consistency of surveyor knowledge and interpretation,
since we propose to require the AOs to use Medicare conditions and
survey processes. We describe the courses required as well as the
estimated time for each in section VI of this proposed rule. We propose
at Sec. 488.5(a)(8) a description of the content and frequency of the
organization's in-service training it provides to survey personnel and
we would also require AOs to submit their training materials to CMS as
part of the application process. We additionally propose at Sec.
488.5(a)(8)(i) to require that all AO surveyors complete two CMS
mandatory courses which instruct surveyors, for all facility types, how
to document their findings in the standardized survey materials. We
would also require AO surveyors to complete all relevant CMS online
program-specific basic surveyor training, which we have already
established for state and federal surveyors. For example, AO hospital
surveyors would be required to take the following CMS online courses:
(1) Principles of Documentation for Non-Long-Term Care; (2) Basic
Writing Skills for Surveyor Staff; (3) and, Hospital Basic Training. A
hospice surveyor would take the Principles of Documentation for Non-
Long-Term Care; Basic Writing Skills for Surveyor Staff; and Hospice
Basic Training courses. If an AO surveyor participates in both hospital
and hospice surveys they would take the two documentation courses and
the two basic training courses. These courses would be the minimum
mandatory requirements for AO surveyors. In addition, we would also
require that all AO surveyors would be required to take any updates to
the CMS online surveyor courses when necessary. Any training above and
beyond the minimum CMS online surveyor courses would be at the AO's
discretion.
We propose at Sec. 488.5(a)(8)(ii), that AO surveyors hired after
the date of implementation of this provision would be required to
complete the required CMS online surveyor training courses prior to
serving on a survey team (except as a trainee). A time requirement is
necessary to ensure that the AO surveyors take the CMS online surveyor
training in a timely manner and is consistent with the existing hospice
program surveyor training requirements at 42 CFR 488.1115(a).
We propose at Sec. 488.5(a)(8)(iii) that AOs would also be
required to document that the CMS online surveyor training courses were
completed and the date of completion in the surveyor's staff personnel
records. The purpose of this requirement would be to allow the AO and
CMS to have records that document that the requirements had been met by
each surveyor. We would review these training records during our onsite
visit to the AO's office that is performed as part of the initial and
renewal application process. We further propose at Sec.
488.5(a)(8)(iii) to require that the AOs maintain this documentation of
course completion by each surveyor for no less than one accreditation
cycle, so we can verify that AO surveyors had completed the online
courses as part of the AO's next renewal application process. One
accreditation cycle would be defined as the period of time during which
the AOs' CMS approval is in effect, starting from the date of
application approval and continuing until the date of approval of the
next renewal application.
This proposed requirement aligns with and expands upon recent
regulations that require hospice program AO surveyors to successfully
complete the CMS online Basic Hospice Surveyor Training prior to
performing any hospice program surveys.
In addition, we propose at Sec. 488.5(a)(8)(iv) that the
provisions proposed at Sec. Sec. 488.5(a)(8)(i) through (a)(8)(iv)
would be applicable beginning 1 year after the effective date of the
final rule.
[[Page 12020]]
I. Proposal To Establish Criteria for ``National in Scope'' (Sec.
488.1)
On April 5, 2013, we published a proposed rule in the Federal
Register entitled, ``Medicare and Medicaid Programs; Survey,
Certification, and Enforcement Procedures'' (78 FR 20564), hereinafter
referred to as ``2013 AO oversight proposed rule'', which proposed
modifications to the CMS AO oversight regulations. In the 2013 AO
oversight proposed rule, we stated that the demonstration of ``national
in scope'' by an AO must be specific to each accrediting program for
which new or renewed CMS approval is sought. We also proposed to define
``national accreditation organization'' in Sec. 488.1 to specify that
CMS requires an AO program seeking initial approval to ``already be
fully implemented and operational nationally'' (78 FR 20566). However,
in the 2015 AO final rule (80 FR 29796), we finalized the policy that
we would not require an AO to reach facility minimums or meet specific
geographic distribution requirements to be deemed ``national in scope''
(80 FR 29802). We did this because we believed AOs should be able to
demonstrate the ability to scale over time.
Currently, we require that an AO's accreditation program be
national in scope in order to receive CMS approval. However, we have
never specified objective criteria for ``national in scope'' in
regulations. Therefore, as the number of AOs (and the number of
applications from AOs) grow, it is in the best interest of CMS and the
AOs to establish specific criteria to define ``national in scope.''
Establishing a specific definition and criteria for what CMS would
consider to constitute widely located geographically across the United
States (U.S.) would ensure that CMS is objective and consistent during
the AO application review process when making a determination as to
whether an AO's accreditation program is, in fact, national in scope.
This would further ensure that new AOs, submitting applications for
deeming authority, are represented across the nation and not clustered
within one area of the country. Furthermore, this also provides an
opportunity for facilities to choose any AO with a CMS-recognized
accreditation program for its provider/supplier type, versus only
having one AO to choose.
Therefore, we propose to add a definition for ``National in
scope,'' to the CMS regulations at Sec. 488.1 to establish criteria
for determining when an AO's accreditation program meets the
requirement. We propose that the definition, ``National in scope''
would mean that the providers and suppliers accredited by an AO under a
specific accreditation program, must be widely located geographically
across the U.S. The proposed requirement for ``national in scope''
would have two components. First, the AO would be required to have
accredited at least five providers or suppliers under the accreditation
program in question. Second, the five providers or suppliers accredited
by the AO under that accreditation program would have to be
geographically located in at least five out of the six geographic
regions.
The addition of the proposed definition of ``National in scope'',
requires that we also define the term ``geographic regions of the
U.S.'', because this is a component of the definition of ``National in
scope.'' Therefore, we propose to add a definition for ``Geographic
regions'' at Sec. 488.1.
The proposed six geographic regions consist of six groups of states
that cover the northeast, southeast, mid-west, central, south, and
western areas of the United States which provide six possible areas in
which an AO could accredit a provider or supplier to meet the second
part of the ``national in scope'' test. In contrast, the use of a
simple north, south, east and west geographical division of the U.S.
would only provide four possible regions in which an AO have accredited
providers and suppliers.
We believe that use of these six geographic regions as the
geographical test for ``national in scope'' would provide a standard by
which CMS could measure whether an AO has accredited the required
number of health care providers or suppliers in varying geographical
areas of the U.S. We further believe the requirement that an AO have
one provider or supplier in at least five of the six geographic regions
would demonstrate the AO's ability to scale up and develop a national
presence over time and align with CMS' current consortiums or
regions.\13\ AOs would need to be able to demonstrate this standard in
their initial applications for deeming authority, as well as continue
to meet this definition, which would be evaluated within their renewal
applications.
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\13\ CMS Organizational Chart, Page 17, Survey Operations Group
<a href="https://www.cms.gov/About-CMS/Agency-Information/CMSLeadership/Downloads/CMS_Organizational_Chart.pdf">https://www.cms.gov/About-CMS/Agency-Information/CMSLeadership/Downloads/CMS_Organizational_Chart.pdf</a>.
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We also believe that this proposed definition of ``Geographic
regions'' would ensure that we are impartial and consistent during the
application review process. We also believe that this proposed
definition would provide the AOs with objective criteria for the
definition of ``national in scope'' that they can strive to meet prior
to submitting an application, especially for possible new accrediting
programs.
We note that Sec. 488.1 currently defines ``national accrediting
organization'' as ``an organization that accredits provider entities
(as that term is defined in section 1865(a)(4) of the Act) under a
specific program and whose accredited providers and suppliers are
widely located geographically across the U.S.'' Because we proposed to
add a specific definition for ``National in scope'' to Sec. 488.1,
that requires a two-part test, it is also necessary to update the
definition of ``National accrediting organization'' to add the
requirement that the AO must be national in scope.
This would ensure that new AOs submitting applications for Medicare
approval of their accreditation programs, would be required to show
that they have the ability to provide accreditation services to
providers and suppliers across the nation and not just those clustered
within one area of the country. Making it a requirement that AOs be
capable of providing accreditation services throughout the U.S.
provides the opportunity to health care providers and suppliers in all
regions of the U.S. to obtain deeming accreditation from the AO of
their choice.
Therefore, we propose to revise the existing definition of
``National accrediting organization'' at Sec. 488.1. The proposed new
definition of ``National accrediting organization'' would read as
follows ``National accrediting organization means an accrediting
organization that is national in scope and accredits provider or
suppliers, under a specific accreditation program.''
We propose to add the new definition for ``National accrediting
organization'' so that we can include the phrase ``is national in
scope'' within the said definition. The purpose for revising the
definition of ``National accrediting organization'' is to enforce
national in scope requirement for AOs.
J. Proposal To Revise the Definition of ``Rate of Disparity'' and To
Use the Process and Outcome Disparity Rates and Performance Measures
(Sec. 488.1)
In section IV.L of this proposed rule, we propose to revise the
validation program by using two different types of validation surveys,
which are: (1) the 60-day ``look-back'' validation survey and, (2) and
a direct survey observation approach, to evaluate the performance of
the AOs. Validation surveys are full surveys performed for a
representative
[[Page 12021]]
sample of accredited facilities. Look-back validation surveys are
completed by the SA within 60 days of an AO's full accreditation survey
for the same facility. In some cases, representative sample ``mid-cycle
validation surveys'' may be conducted whether or not there has been a
preceding AO survey.
The analysis of the validation survey findings are reported as a
``disparity rate.'' As previously discussed in section II.C of this
proposed rule, this rate of disparity is currently defined at Sec.
488.1 as the percentage of all sample validation surveys for which a SA
finds noncompliance with one or more Medicare conditions and where no
comparable condition-level deficiency was cited by the AO and it is
reasonable to conclude that the deficiencies were present at the time
of the AO's most recent survey of that provider or supplier. The goal
of the validation process is to determine whether the findings of the
two surveys are comparable.
In calculating the current rate of disparity, the numerator is the
number of surveys in which the AO missed at least one condition-level
deficiency found by the SA and the denominator is the number of surveys
in the validation sample. The result is the percentage of validation
surveys where the AO missed finding a significant deficiency identified
by the SA. If the AO missed at least one serious deficiency in a third
of the validation surveys, the disparity rate would be 33 percent. A
lower disparity rate indicates better AO performance.
The existing definition of ``rate of disparity'' is not applicable
to the direct observation validation survey because it focuses on the
survey process as opposed to outcome of the survey. Therefore, we
propose to revise the current definition of ``rate of disparity''
located at Sec. 488.1 and replace this definition with two new
definitions, which are ``outcome disparity rate'' and ``process
disparity rate.''
The outcome disparity rate would be applicable to the look-back
validation survey, which is the current method of validation. We
propose that the new definition of ``outcome disparity rate'' would
generally remain as the existing definition of ``rate of disparity'' at
Sec. 488.1, but would be revised and retitled as ``outcome disparity
rate'' to distinguish it from the ``process disparity rate.''
When calculating the process disparity rate, the numerator for one
provider or supplier for which the direct observation validation survey
is done would be the number of observed survey process findings and the
denominator would be the number of expected survey process findings for
all direct observation validation surveys. The observed survey process
findings are the actual number of Medicare conditions that were
observed being surveyed for by the AO. The expected survey process
findings are the total number of Medicare conditions that the AO should
have surveyed for during the survey observation. The result would be
reported as a percentage. A high percentage indicates greater disparity
between the expected AO performance on direct observation validation
survey and the actual AO performance on the direct observation
validation survey. For example, a direct observation validation survey
with 75 observed process findings out of 100 expected process findings
would yield a process disparity rate of 25 percent [((100-75) / 100) *
100], indicating a 25 percent difference between what is observed and
what is expected (See Figure 1).
[GRAPHIC] [TIFF OMITTED] TP15FE24.002
The proposed process disparity rate would be applicable to the
direct observation validation survey and would be defined as the
difference between the observed survey process findings and the
expected survey process findings.
The overall process disparity rate for a particular AO would be
calculated by taking the average of the process disparity rate for each
direct observation validation survey performed for an accreditation
program of an AO. Preliminary results obtained from the VRP pilot
during the period of June 2018 to July 2019 are shown in Figure 2.
While we will analyze and explain the pilot data when more is
available, we share preliminary data here as a sample of how the
process disparity rate would be calculated if this proposed rule is
finalized as proposed.
[[Page 12022]]
[GRAPHIC] [TIFF OMITTED] TP15FE24.003
The outcome disparity rate measure would also be a component of
evaluating AO performance. We have been measuring the outcome disparity
rate as a performance measure for years and have historical data to
share. This measure would comprise any look-back validation survey
condition level findings made by the SA that had not been identified by
the AO during their reaccreditation survey, where it is reasonable to
conclude that these deficiencies were present when the AO performed the
survey (see Figure 3).
[GRAPHIC] [TIFF OMITTED] TP15FE24.004
In addition to reporting the overall disparity between the outcomes
found by both the AO and SA, the differences between the observed and
expected survey processes would also be reported as the process
disparity rate.
In FY 2019, we found that 42 percent of the state validation look-
back validation surveys performed for hospitals, the AO did not cite a
comparable deficiency to those cited by the SA. The proposed definition
of new process disparity rate would showcase the average percent
difference between the observed survey process findings and the
expected survey process findings, by provider type.
Figure 4 provides the FY 2020 outcome disparity rate for Medicare
provider types as reported in the January 2021 Report to Congress.
BILLING CODE 4120-01-P
[[Page 12023]]
[GRAPHIC] [TIFF OMITTED] TP15FE24.005
BILLING CODE 4120-01-C
We note that the average disparity rate across all Medicare
provider types is 32 percent, based on the most recent data, with the
largest disparity rate being
[[Page 12024]]
CAHs' accreditation surveys, at 46 percent. By continuing to monitor
outcome disparities, and further investment in our methodologies for
measuring process disparities would help to bring AOs up to the
standards of SAs.
K. Proposal To Require AOs To Submit a Publicly Reportable Plan of
Correction for Unacceptable Performance Measure Scores (Sec.
488.8(a)(2))
In section IV.J of this proposed rule, we proposed to revise the
definition of ``disparity rate'' to include a process and outcome
disparity rates. We noted that the proposed definition of outcome
disparity rate generally remains the same as the currently defined
definition of disparity rate. We further noted that we have been
measuring the outcome disparity rate as a performance measure for
years. We would note that we would use the new process disparity rate
as a performance measure.
To monitor an AO's ongoing performance as provided by section
1875(b) of the Act and Sec. 488.8, we propose in paragraph (a)(2) to
expand the types of validation activities included in the performance
review. We also propose in paragraph (a)(4) to require AOs to submit a
plan of correction that would be publicly reported, when the AO's
performance on survey activities identify disparity concerns either
through the outcome disparity rates or process disparity rates.
We propose to revise Sec. 488.8(a)(2) to broaden activities that
CMS would evaluate in our ongoing review of AOs. Specifically, we would
monitor the results of our outcome disparity rate, the look-back
validation surveys, complaint surveys and the process disparity rate as
determined by the direct observation survey.
We propose to revise Sec. 488.8(a)(4) to require that when an AO's
outcome disparity or process disparity performance measure scores, as
determined from look-back and direct observation validation surveys,
reveal that the AO's accreditation survey activities do not meet an
acceptable performance threshold established by CMS, the AO would be
required to submit an acceptable plan of correction to CMS which
identified corrective action the AO proposed to take to correct their
performance.
We propose at Sec. 488.8(a)(4)(i), to require that the plan of
correction be submitted to CMS for review within 10 business days the
AO being notified by CMS of not meeting the acceptable performance
threshold. We also propose that in order to be acceptable, the AO's
plan of correction would have to: (1) document specific actions being
taken by the AO to address improving performance (proposed Sec.
488.8(a)(4)(i)(A); (2) document the timeframe for implementation of the
plan (proposed Sec. 488.8(a)(4)(i)(B)); (3) plan for ongoing
monitoring of the plan of correction toward achieving an acceptable
level of performance (proposed Sec. 488.8(a)(4)(i)(C); and, (4)
identify the individual responsible for implementation and monitoring
of the acceptable plan of correction (Sec. 488.8(a)(4)(i)(D)).
CMS would subsequently communicate with the AO on the acceptability
of the plan of correction and would provide oversight of
implementation. We propose at Sec. 488.8(a)(4)(ii) that upon review
and approval of the submitted plan of correction, CMS would provide
ongoing evaluation of the progress of plan implementation.
Finally, we propose at Sec. 488.8(a)(4)(iii) that the AO's plan of
correction be made subject to public reporting by CMS. Once approved,
the plan of correction would be publicly available for review. This
means that the acceptable plan of correction would be displayed
publicly by CMS once approved. This plan of correction would be
utilized to increase an AO's accountability for maintaining performance
standards.
The purpose of this oversight is to improve AO survey activity
outcome and processes with the presumption that improvements toward
acceptable performance would improve the health and safety of patients
receiving services in Medicare-participating facilities. This is an
effort to strengthen AO oversight by requiring AOs to address issues
and take corrective action to improve to an acceptable level of
performance. Previously, this was handled verbally or through written
correspondence between the AO and CMS staff without a specific plan of
correction.
The proposed publicly reportable plan of correction would be based
on both an analysis of data to identify the outcome and process
disparity performance measure(s) for which the AO did not meet
acceptable performance as well as significant instances of disparity.
An analysis matrix would outline both outcome performance and process
performance areas of successful achievement and those areas for which
achievement was less than acceptable as demonstrated by the outcome and
process disparity rate data. An example of what a plan of correction
matrix might look like is indicated in Figure 5.
BILLING CODE 4120-01-P
[[Page 12025]]
[GRAPHIC] [TIFF OMITTED] TP15FE24.006
BILLING CODE 4120-01-C
The matrix in Figure 5 is representative of FY 2018 data collected
during the direct observation validation surveys, look-back validation
surveys, and complaint surveys (which investiga
[…truncated; see source link]Indexed from Federal Register on February 15, 2024.
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