[Federal Register: November 22, 2002 (Volume 67, Number 226)]
[Proposed Rules]
[Page 70373-70376]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22no02-27]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 482
[CMS-1224-P]
RIN 0938-AM01
Medicare Program; Nondiscrimination in Posthospital Referral to
Home Health Agencies and Other Entities
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish a process for us to
collect, maintain, and make available to the public, information about
hospital referrals of Medicare patients to home health agencies (HHAs)
and other entities with which the hospitals have a financial interest
or which have a financial interest in the hospital. We would publicize
this information in an effort to increase awareness regarding the
availability of Medicare-certified HHAs and other entities to serve the
Medicare population, and to inform beneficiaries of their freedom to
choose among available Medicare-participating providers that are
capable of furnishing the needed services.
DATES: We will consider comments if we receive them at the appropriate
address, as provided below, no later than 5 p.m. on January 21, 2003.
ADDRESSES: In commenting, please refer to file code CMS-1224-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission. Mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-1224-P, PO Box 8014, Baltimore, MD 21244-8014.
Please allow sufficient time for mailed comments to be timely
received in the event of delivery delays.
If you prefer, you may deliver (by hand or courier) your written
comments (one original and two copies) to one of the following
addresses:
Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and could be considered late.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Elizabeth Carmody, (410) 786-7533.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Comments
received timely will be available for public inspection as they are
received, generally beginning approximately 3 weeks after publication
of a document, at the headquarters of the Centers for Medicare &
Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244,
Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule
an appointment to view public comments, phone (410) 786-7197.
Copies: Additional copies of the Federal Register containing this
proposed rule can be made at most libraries designated as Federal
Depository Libraries and at many other public and academic libraries
throughout the country that receive the Federal Register.
This Federal Register document is also available from the Federal
Register online database through GPO Access, a service of the U.S.
Government Printing Office. The Web site address is: http://
www.access.gpo.gov/nara/index.html.
I. Background
Section 4321 of the Balanced Budget Act of 1997 (BBA), Pub. L. 105-
33, was enacted by the Congress to improve the administration of the
Medicare Program by enabling Medicare beneficiaries to make more
informed choices about the providers from which they receive Medicare
services. We believe that this provision was intended to address
concerns that some hospitals were referring patients only to home
health agencies (HHAs) in which they had a financial interest. Section
4321 of the BBA addresses both quality and program integrity concerns
inherent in financial relationships among hospitals, HHAs, and other
entities.
Section 4321(a) of the BBA requires that Medicare participating
hospitals, as part of the discharge planning process, share with each
beneficiary a list of
[[Page 70374]]
Medicare-certified HHAs that serve the beneficiary's geographic area
and which request to be listed. In addition, the statute prohibits
hospitals from specifying that beneficiaries receive services from a
particular HHA. Further, the statute requires that hospitals identify
any HHA or other entity in which they have a disclosable financial
interest or which have a financial interest in them, although it does
not define what is meant by ``financial interest.'' The intent of
section 4321(a) is to protect patient choice. Hospitals essentially
have a captive population and, through the discharge planning process,
can affect who provides posthospitalization services. CMS has already
implemented the requirements of section 4321(a). A CMS directive was
issued on October 31, 1997, and enforcement is carried out through the
hospital survey and certification process. Moreover, the requirements
of section 4321(a) are set forth in the proposed hospital conditions of
participation, published on December 19, 1997 (62 FR 66726).
This proposed rule would establish a process for implementing
sections 4321(b) and (c) of the BBA. Section 4321(b) of the BBA
requires each Medicare participating hospital to maintain and disclose
to the Secretary of Health and Human Services (the Secretary) the
following information:
(1) The nature of any direct or indirect financial interest that
exists among the hospital and those HHAs and other entities to which
the hospital refers beneficiaries under a discharge plan.
(2) The number of beneficiaries who were discharged from the
hospital and who were identified as requiring home health services.
(3) The percentage of those beneficiaries who received home health
services from an HHA in which the hospital has a financial
relationship.
Section 4321(c) of the BBA requires the Secretary to make available
to the public the information disclosed under section 4321(b).
II. Provisions of the Proposed Regulations
We are proposing a process for collecting and publicizing the
information required by sections 4321(b) and (c) of the BBA.
A. Claims-Level Information
Information regarding beneficiary utilization of hospital, HHA, and
other services is readily available through the secure network
governing the day-to-day claims processing operations of the Medicare
Program. These claims data are available at the Medicare fiscal
intermediaries and carriers as well as at the Centers for Medicare &
Medicaid Services. We propose to use these data to identify hospital
discharges and related, subsequent home health services. Further, these
data will identify the hospitals, HHAs, and other entities that
furnished the Medicare services.
B. Information About Financial Interests
We propose to allow hospitals to satisfy their financial disclosure
obligations under the BBA through the Medicare provider enrollment
process. The Medicare provider enrollment process already collects
information that identifies financial relationships between hospitals,
HHAs, and other entities. For example, when applying for a provider
number for billing the Medicare program, a hospital must disclose the
existence and nature of financial interests in HHAs and other entities.
Accordingly, for the purpose of implementing section 4321(b) of the
BBA, we propose to define a reportable ``financial interest'' as any
financial interest that a hospital is required to report according to
the provider enrollment process, which is governed by section 1124 of
the Social Security Act (42 U.S.C. 1320a-3) and its implementing
regulations and manual provisions. We do not believe, however, that
section 4321 of the BBA should be interpreted to mean that the mere
existence of a financial relationship between a hospital and an HHA
constitutes a program abuse.
To implement sections 4321(b) and (c) of the BBA without placing
any additional reporting burden on Medicare providers, we propose to
systemically match and report information from the provider enrollment
process on financial interests among hospitals, HHAs, and other
entities with information from day-to-day Medicare claims processing on
the utilization of home health services. We are soliciting comments on
our proposed process, as well as alternative methods for collecting and
reporting data.
C. Form and Manner for Disclosing Information
Information collected under sections II.A and B of this preamble
will be made available annually in January for the prior October
through September period, on a hospital-by-hospital basis. For each
hospital, we propose collecting and reporting: (1) The total number of
hospital discharges that led to home health services; (2) the
percentage of those discharged beneficiaries who received home health
services from an HHA that had a direct or indirect financial
relationship with the discharging hospital; (3) the name(s) of the
HHA(s) and other entities for which a financial relationship with the
hospital exists and for which posthospital services were furnished; and
(4) the nature of the financial interest.
We will determine the most effective and efficient ways to make the
required information available to the public. Consideration will be
given to using websites as well as hardcopy distribution. The form and
manner for making the information available will be guided by the need
to reach as many beneficiaries as possible in order to assist them in
making informed choices about who furnishes their health care services.
As such, we invite comments as to the preferred medium for
disseminating this information. We anticipate releasing the initial
report during the first January that is at least 90 days after the
publication of the final rule.
III. Collection of Information Requirements
This document does not impose additional information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995. Information about hospital discharges
and related home health services is available through Medicare claims
processing systems and databases. Further, financial interest
information is already available through the Medicare provider
enrollment process.
IV. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the comments in the preamble to that
document.
V. Regulatory Impact Statement
A. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded
[[Page 70375]]
Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). This is not a
major rule. It would not impose any additional costs on affected
entities, as compliance with the statute and the rules proposed herein
are possible through the management and disclosure of information
already available to the Medicare Program. Some indeterminable benefits
may result by enabling Medicare beneficiaries to make more informed
choices about who furnishes their Medicare services. Therefore, no RIA
is required.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government agencies.
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of $7.5
million or less annually. For purposes of the RFA, all hospitals, HHAs,
and ``other entities'' are considered to be small entities. However,
the nature of this proposed rule is such that no regulatory burden
would be placed upon hospitals, HHAs, and other entities. Therefore, no
regulatory relief options are considered.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. We certify that this
proposed rule would not have a significant economic impact on a
substantial number of small entities or a significant impact on the
operations of a substantial number of small rural hospitals.
Information needed to comply with the statute is already available
through the Medicare claims processing and provider enrollment systems.
Therefore, no regulatory impact analysis is required.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in an expenditure in any 1 year by
State, local, or tribal governments, in the aggregate, or by the
private sector, of $110 million. This proposed rule would not have an
impact on State, local, or tribal governments or on the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This proposed rule would not have a substantial effect on
State or local governments for the reasons noted above.
B. Anticipated Effects
1. Effects on Beneficiaries, Hospitals, HHAs, and Other Entities
The anticipated effects on Medicare's beneficiaries would be an
enhanced ability to make informed choices about the care they receive
from HHAs and other entities upon discharge from a hospital. There are
approximately 6,000 Medicare-certified hospitals and 6,900 Medicare-
certified HHAs, of which approximately 2,000 are hospital-based. At
this time, we have not compiled additional data that may identify other
financial relationships between hospitals, HHAs, and other entities, as
further defined under the provider enrollment guidelines.
The effect of this proposed rule on hospitals, HHAs, and other
entities is uncertain, but the requirements set forth in this proposed
rule would place no additional burden on these providers. A possible
outcome might be to influence hospital referral patterns, thus having
an impact on HHAs and other entities. The information made available in
compliance with the statute and this proposed rule may impact
beneficiary choices about who furnishes Medicare services to them and,
in turn, may have an indeterminable impact on HHAs and other entities
that receive/do not receive the beneficiary's ``business'' as a result.
2. Effects on the Medicare and Medicaid Programs
This proposed rule would improve our information campaign to assist
beneficiaries in their choices for health care delivery. In addition,
the information made available through this proposed rule would serve
to ensure that the financial interests between hospitals, HHAs, and
other entities do not lead to program integrity abuses such as steering
certain patients (for example, healthier patients) to certain HHAs (for
example, hospital-owned). We do not believe, however, that section 4321
of the BBA should be interpreted to mean that the mere existence of a
financial relationship between a hospital and an HHA constitutes a
program abuse.
The effects on the Medicaid Program may be similar in that the
information about financial relationships between hospitals, HHAs, and
other entities would be made available to the public.
C. Alternatives Considered
We considered requiring hospitals to collect and provide the
information necessary for implementation of this proposed rule. We
decided to collect the information from existing sources, however, in
order to create a process that would not be burdensome to the entities
involved. We request comments on our proposed process as well as on
alternative approaches of collecting this information. We also invite
public comment on what impact provision of this information might have
on home health referrals or beneficiaries' choices of providers.
D. Conclusion
As described above, this proposed rule proposes a process for
implementing the statutory requirements under sections 4321(b) and (c)
of the BBA. This approach would enhance the information made available
to Medicare beneficiaries and reduce potential program abuses by
hospitals. Further, the proposed approach for complying with the
relevant statutory provisions would place no additional burden on all
affected entities or on any entity, which may be indirectly affected.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 482
Grant programs--health, Hospitals, Medicaid, Medicare, Reporting
and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV, part 482 as
set forth below:
PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS
1. The authority citation for part 482 continues to read as
follows:
[[Page 70376]]
Authority: Secs. 1102 and 1871 of the Social Security Act,
unless otherwise noted (42 U.S.C. 1302 and 1395hh).
2. Section 482.43 is amended by adding paragraphs (c)(6)(i) through
(c)(6)(iii) to read as follows:
Sec. 482.43 Condition of participation: Discharge planning.
* * * * *
(c) * * *
(6) If a hospital refers a Medicare beneficiary to an HHA or
another entity in which the hospital has a reportable financial
interest, or the HHA or other entity has a reportable financial
interest in the hospital, CMS will make available to the public the
following information:
(i) The name of the hospital, HHA, or other entity and the nature
of the financial interest to the hospital.
(ii) The number of beneficiaries who the hospital discharged and
identified as requiring home health services.
(iii) The percentage of the referrals in paragraph (c)(6)(ii) of
this section in which the hospital had financial interest in the HHA,
or the HHA had a financial interest in the hospital.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: July 3, 2002.
Thomas A Scully,
Administrator, , Centers for Medicare & Medicaid Services.
Approved: August 5, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-29563 Filed 11-21-02; 8:45 am]
BILLING CODE 4120-01-P