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HOME CARE II
PHOTOCOPY
PRESERVATION
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
NATIONAL ASSOCIAL ASSOCIATION FOR HOME CARE
# CARE
CERTIFIED
EXECUTIVE
=
HOME CARE UNIVERSITY
PROFESSIONAL
CERTIFICATION
for Home Care
& Hospice Executives
Sponsored by Home Care
University, an affiliate of
The National Association for
Home Care
allc
HOMECARE UNIVERSITY
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
NATIONAL ASSME ASSOCIATION FOR HOME CARE
# care #
CERTIFIED
EXECUTIVE
=
HOME CARE UNIVERSITY
PROFESSIONAL
CERTIFICATION
for Home Care
& Hospice Executives
Sponsored by Home Care
University, an affiliate of
The National Association for
Home Care
alle
HOMECARE UNIVERSITY
IDCA
HOME CARE AIDE
cat.
ASSOCIATION OF AMERICA
THE HOME CARE AIDE ASSOCIATION OF AMERICA IS AN AFFILIATE OF THE NATIONAL ASSOCIATION FOR HOME CARE, LOCATED AT 519 C STREET, NE, WASHINGTON, DC 20002-5809.
National Uniformity for Paraprofessional Title,
Qualifications, and Supervision
The paraprofessional home
sory standards for the paraprofes-
what exists, rather than to promote
T
care worker is a key compo-
sional in home care must be agreed
an improved classification system.
nent of both acute and long-
on and that the financial resources
term home care programs. Two
to meet the standards must be made
Uniform Title
elements are essential to the success
available simultaneously with the
of the paraprofessional: appropriate
imposition of those standards.
To facilitate long-term care
training and supervision. Supervi-
These standards should apply to all
planning and legislation, the
sion should include a strong worker
paraprofessional home care services
HCAAA Advisory Board has pro-
support system. The paraprofes-
regardless of payment source. The
posed the use of a generic title for
sionals' support system includes
policies outlined in this paper are
paraprofessionals in home care. It
competent administrative leadership
not intended to supersede, preempt,
will cover many manifestations and
and the potential for interaction and
or otherwise affect existing state
leave room for the growth and
sharing of experience among work-
scope of practice laws regarding the
development of classifications and
ers.
provision of care in the home.
specializations as they become
The Home Care Aide Associa-
The core services around which
appropriate. That title is home care
tion of America (HCAAA) devel-
a long-term care strategy should be
aide. The term encompasses the
oped these standards for home care
forged are those cost-effective ser-
essential components of the job.
paraprofessional titles, qualifica-
vices that are performed by home
Care is being provided in the home
tions, and supervision as a concep-
care paraprofessionals. NAHC and
by someone who has received train-
tual model for paraprofessional
other organizations have called this
ing and is working under profes-
services. A uniform system must be
work category homemaker-home
sional supervision with the goal of
agreed on before policymakers will
health aide. This worker is a para-
assisting the client with independent
provide adequate funding to cover
professional with training and com-
living. HCAAA's Advisory Board is
the costs of implementing increased
petence in both home management
proud to advocate the term home
training and supervision. Adoption
and personal care skills. Individuals
care aide.
of this approach will result in
perform these tasks under a variety
greater uniformity and accountabil-
of titles, each with different training
Levels of Preparation and
ity, improved quality in home care
requirements, standards of supervi-
services and public policy decisions,
sion, and funding sources, for exam-
Responsibilities for the Three Clas-
and enhanced consumer under-
ple, the home health aide within the
sifications of Home Care Aide
standing. It will allow the industry
Medicare model and the home-
to improve current home care ser-
maker under Title XX. This lack of
To prevent or delay institution-
vices funded by the Older Ameri-
uniformity in title, function, and
alization, clients will need a range of
cans Act, Medicare, Medicaid, the
standards for training and supervi-
services that extend from basic
Social Services Block Grant (Title
sion for the home care paraprofes-
housekeeping to complex personal
XX), insurance programs, and con-
sional has resulted in considerable
care. The home care aide must be
sumers. Most important, it will
fragmentation and no clear perspec-
prepared to adapt to client differ-
enable the industry to develop a
tive on the continuum of long-term
ences. The three classifications of
comprehensive long-term care pol-
care services provided by this
home care aide defined below
icy.
important segment of the home care
address a range of client needs and
This position paper is based on
community.
the attendant needs for training and
the premise that uniform titles,
Without uniform standards and
supervision. HCAAA proposes that
qualifications, training, and supervi-
definitions, long-term care policy-
experienced home care aides bypass
makers will be pressured to accept
training if they are able to demon-
HOME CARE AIDE ASSOCIATION OF AMERICA POSITION PAPER
March 1993
strate their ability to perform
care and environment in accordance
content of a unit would be appropri-
required tasks through a compe-
with the plan of care. The HCA I is
ate to the home care aide's duties:
tency evaluation. Any long-term
not to provide any personal care.
home care program must provide
Examples of duties: housekeep-
SECTION II. Understanding and
funding for this training and super-
ing; shopping; laundry; essential
Working with Various Client
vision to meet client needs.
errands; basic meal preparation and
Populations
Delineating three classifications
meal planning (not for special diets);
Unit C. Understanding and Work-
of home care aide will provide the
maintaining a safe environment;
ing with Children, 3 hrs.
flexibility needed to design a system
observing, monitoring and reporting
Unit D. Understanding and Work-
that maintains appropriate stan-
on a client's condition; and teaching
ing with Older Clients, 4 hours
dards for appropriate levels of care.
of those tasks to the client that will
Unit E. Understanding and Working
It is inefficient to discourage provi-
increase client independence and
with Clients Who are III, 2 hrs.
sion of these services if the only
that the HCA I is qualified to teach.
Unit F. Understanding and Working
available personnel are overquali-
Training: The following train-
with Clients with Disabilities, 2.5
fied and more costly than needed. It
ing units, based on the National
hrs.
is essential that those clients who
HomeCaring Council's "A Model
Unit G. Mental Health and Illness,
need environmental services or min-
Curriculum and Teaching Guide for
2 hrs.
imal personal care services must
the Instruction of the Homemaker-
Unit H. Understanding Dying and
receive help from people who are
Home Health Aide," should be
Death, 1 hr.
fully qualified to meet their needs.
completed before assignment.
The environmental and per-
SECTION III. Practical Knowledge
sonal care needs of the client can be
SECTION I. Orientation to Home
and Skills in Home Management,
met by the same person. The Class
Care Aide* Services, 4.5 hrs.
7 hrs.
III home care aide is prepared and
(all remaining hours in Section III
competent to perform tasks of the
SECTION II. Understanding and
except 1-1/2 hours of modified
Class I and Class II home care aide,
Working with Various Client
diets-see HCA II)
as well as tasks for which he or she
Populations
has had more advanced training.
Unit A. Communication, 2 hrs.
SECTION V. Application of Knowl-
Similarly, the Class II home care aide
Unit B. Understanding Basic Human
edge and Skills-The Practicum,
can perform the duties of both home
Needs, 2.5 hrs.
2.5 hrs.
care aide Classes I and II. No home
SUBTOTAL 24 hrs.
care aide is to perform tasks with
SECTION III. Practical Knowledge
SIX MONTH TOTAL 40 hrs.
clients (1) for which he or she has
and Skills in Home Management
not received appropriate training or
Unit A. Maintaining a Clean, Safe
Supervision: Supervision of the
(2) without proper supervision.
and Healthy Environment, 4.5
HCA I shall occur at least every 62
It is also important to note that
hrs.
days in at least one home while the
this classification system allows
Unit D. Portion on Infectious Dis-
HCA I is on duty. Supervision may
individuals to work their way up a
eases and Infection Control, 1.5
be performed by staff such as
career ladder or path. Such verifica-
hrs.
nurses, social workers, and home
tion of the value of this role will
economists. An experienced HCA
enhance job satisfaction and thus
SECTION IV. Practical Knowledge
III may also supervise a HCA I if the
improve patient care.
and Skills in Personal Care
HCA III has received additional
The following descriptions of
Unit G. Emergency Procedures, 1 hr.
training in supervision and is under
Home Care Aide I, II, and III
SUBTOTAL 16 hrs.
address these issues.
*The model curriculum refers to
homemaker-home health aide
Home Care Aide I
duties; it is anticipated that future
The home care aide I (HCA I)
versions of the curriculum will refer
assists with environmental services
to home care aides to reflect the
such as housekeeping and home-
change in title recommended by
making services to preserve a safe,
HCAAA and NAHC.
sanitary home and enhance family
The following units should be
life. The HCA I should encourage
completed within six months of the
the client and/or family to assume as
first assignment or prior to the HCA
much responsibility as possible for
I working in any situation where the
HOME CARE AIDE ASSOCIATION OF AMERICA POSITION PAPER
March 1993
the direct supervision of a
SECTION V. Application of Knowl-
SECTION IV. Practical Knowledge
professional.
edge and Skills-The Practicum
and Skills in Personal Care
Inservice: The HCA I shall be
Unit F. Supervised Application of
Unit E. Observations about Medica-
required to complete at least six
Knowledge and Skills, 2.5 hrs.
tions, 1 hr.
hours of inservice training per year
Additional Training (beyond
Unit F. Rehabilitation, 2 hrs.
on topics relevant to appropriate
HCA I requirement), 20 hrs.
Unit G. Health Procedures, 2 hrs.
clients and duties and meet applica-
TOTAL TRAINING REQUIRED
1. Dry, nonsterile Technique
ble state laws.
within six months of first assign-
Dressing
ment is 60 hrs.
2. Simple Procedures
Home Care Aide II
The home care aide II (HCA II)
Supervision: Supervision of the
SECTION V. Application of Knowl-
assists the client and/or family with
HCA II shall occur at least every 62
edge and Skills-The Practicum.
home management activities and
days in at least one home while the
Supervised Application of
with non-medically directed per-
HCA II is on duty. Supervision must
Knowledge and Skills, 10 hrs.
sonal care. The HCA II is not to
be performed by appropriate profes-
Additional training (beyond
perform duties under a medically
sionals.
HCA II requirement), 15 hrs.
directed plan of care and is not to be
Inservice: The HCA II shall be
TOTAL 75 hrs.
assigned duties related to assistance
required to complete at least 10
with medications or wound care.
hours of inservice education per
Supervision: Supervision of the
Examples of Duties: All the
year that are relevant to appropriate
HCA III shall occur at least every 62
duties of a HCA I plus: assistance
clients and duties and meet applica-
days in at least one home while the
with ambulation, bathing, hair
ble state laws.
HCA III is on duty. Supervision
care/grooming, dressing, toileting,
must be performed by appropriate
transfer activities, special diets,
Home Care Aide III
professionals such as nurses.
activities of daily living, and appro-
The home care aide III (HCA
Inservice: The HCA III shall be
priate client teaching consistent
III) works under a medically super-
required, at a minimum, to meet
with training.
vised plan of care to assist the client
current HCFA inservice require-
Training: The HCA II is to
and/or family with household man-
ments for home care aides under the
complete all the training units
agement and personal care.
Medicare program.
required of the HCA I (40 hours)
Examples of Duties: All duties
prior to any assignment to a client
of the HCA I and HCA II plus those
Special Needs
involving the provision of care.
delineated under a medically
The following additional units
directed plan of care. These would
As this field continues to
are to be completed within six
include: nonsterile wound care,
advance, special needs must be
months of the first assignment as
assistance with self-administered
addressed. Specifically trained para-
HCA II. However, no HCA II shall
medications, assistance with pre-
professionals are the ones to address
be assigned to provide services for
scribed exercises and rehabilitation
these needs. As these needs evolve,
which the HCA II has not been
activities, simple procedures, help
new types of aides will be developed
trained and for which the HCA II
with assistive devices, and appropri-
with specialized training and super-
has not demonstrated competency.
ate client instruction consistent with
vision requirements. Possible exam-
training.
ples of future specialty areas include
SECTION III. Practical Knowledge
Training: The HCA III will
pediatric HCAs, mental health
and Skills in Home Management
complete 75 hours of training and
HCAs, HIV HCAs, and HCAs who
Unit B. Modified Diets, 1.5 hrs.
pass a competency evaluation.
are trained to help individuals with
Training beyond the HCA I and
Alzheimer's and developmental dis-
SECTION IV. Practical Knowledge
HCA II requirements must be com-
abilities.
and Skills in Personal Care
pleted within the first six months of
With basic uniformity and con-
Unit A. Body Systems, Disorders,
assignment as an HCA III. How-
sistent definitions, redefinitions and
and Diseases, 3 hrs.
ever, no HCA III shall be assigned
progress in the field of paraprofes-
Unit B. Observing Body Functions,
to provide services for which he or
sional home care services will be
3 hrs.
she has not been trained and has not
facilitated and this crucial role in
Unit C. Care of the Client in Bed,
demonstrated competency.
home care developed to its utmost.
8.5 hrs.
Units to be completed beyond
Unit D. Care of the Client not in
the requirements for HCA II are:
Bed, 1.5 hrs.
HOME CARE AIDE ASSOCIATION OF AMERICA POSITION PAPER
March 1993
1999 Home Care Stats
http://www.nahc.org/Consumer/hcstats.hr
BASIC STATISTICS ABOUT HOME CARE
Home care in the United States is a diverse and dynamic service industry. More than 20,000 providers
deliver home care services to some 8 million individuals who require such services because of acute illness,
long-term health conditions, permanent disability, or terminal illness. Annual expenditures for home care
were $40 billion in 1997 and are expected to total $42 billion in 1998.¹
1. HOME CARE PROVIDERS
The first home care agencies were established in the 1880s. Their number grew to some 1,100 by 1963
and to more than 20,000 currently. Home health agencies, home care aide organizations, and hospices
are known collectively as "home care organizations."
a. Medicare-certified Agencies
Home care agencies of various types have been providing high-quality, inhome services to
Americans for more than a century. However, Medicare's enactment in 1965 greatly accelerated
the industry's growth. Medicare made home care services, primarily skilled nursing and therapy
of a curative or restorative nature, available to the elderly. In 1973, these services were extended
to certain disabled younger Americans. Between 1967 and 1985, the number of agencies
certified to participate in the Medicare program more than tripled, from 1,753 to 5,983. In the
mid-1980s, the number of Medicare-certified home care agencies leveled off at around 5,900 as
a result of increasing Medicare paperwork and unreliable payment policies. These problems led
to a lawsuit brought against the Health Care Financing Administration (HCFA) in 1987 by a
coalition of Members of the US Congress led by Reps. Harley Staggers (D-WV) and Claude
Pepper (D-FL), consumer groups, and the National Association for Home Care (NAHC). The
successful conclusion of this lawsuit gave NAHC the opportunity to participate in rewriting the
Medicare home care payment policies. Following these revisions, annual outlays for Medicare's
home health benefit increased significantly and the number of Medicare-certified home health
agencies rose to more than 10,000. More recently, the number declined to 9,655 and continues
to decrease. NAHC believes the recent decline in agencies is the direct result of changes in
Medicare home health reimbursement enacted as part of the Balanced Budget Act of 1997
(BBA).
The number of hospital-based and freestanding proprietary agencies has grown faster than any
other type of certified agency since the coverage clarifications. Freestanding proprietary
agencies now comprise 46% and hospital-based agencies 27% of all certified agencies. This
differs markedly from the industry composition in the early 1980s, when public health agencies
dominated the ranks of certified agencies and proprietary and hospital-based agencies combined
accounted for only one-fourth of the total. Table 1 shows the changes over time in types of
agencies participating in Medicare.
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5/19/99 5:56
1999 Home Care Stats
http://www.nahc.org/Consumer/hcstats.h
Table 1. Number of Medicare-certified Home Care Agencies, by Auspice, for Selected Years,
1967-1998
FREESTANDING AGENCIES
FACILITY-BASED AGENCIES
Year
VNA
COMB
PUB
PROP
PNP
OTH
HOSP
REHAB
SNF
TOTAL
1967
549
93
939
0
0
39
133
0
0
1,753
1975
525
46
1,228
47
0
109
273
9
5
2,242
1980
515
63
1,260
186
484
40
359
8
9
2,924
1985
514
59
1,205
1,943
832
4
1,277
20
129
5,983
1990
474
47
985
1,884
710
0
1,486
8
101
5,695
1991
476
41
941
1,970
701
0
1,537
9
105
5,780
1992
530
52
1,083
1,962
637
28
1,623
3
86
6,004
1993
594
46
1,196
2,146
558
41
1,809
1
106
6,497
1994
586
45
1,146
2,892
597
48
2,081
3
123
7,521
1995
575
40
1,182
3,951
667
65
2,470
4
166
9,120
1996
576
34
1,177
4,658
695
58
2,634
4
191
10,027
1997
553
33
1,149
5,024
715
65
2,698
3
204
10,444
1998*
508
32
1,131
4,418
678
66
2,631
3
188
9,655
Source: HCFA, Center for Information Systems, Health Standards and Quality Bureau.
VNA: Visiting Nurse Associations are freestanding, voluntary, nonprofit organizations governed by a board of directors
and usually financed by tax-deductible contributions as well as by earnings.
COMB: Combination agencies are combined government and voluntary agencies. These agencies are sometimes included
with counts for VNAs.
PUB: Public agencies are government agencies operated by a state, county, city, or other unit of local government having a
major responsibility for preventing disease and for community health education.
PROP: Proprietary agencies are freestanding, for-profit home care agencies.
*Data for 1998 were obtained on September 30. Actual FY counts are expected to differ.
PNP: Private not-for-profit agencies are freestanding and privately developed, governed, and owned nonprofit home care
agencies. These agencies were not counted separately prior to 1980.
OTH: Other freestanding agencies that do not fit one of the categories for freestanding agencies listed above.
HOSP: Hospital-based agencies are operating units or departments of a hospital. Agencies that have working
arrangements with a hospital, or perhaps are even owned by a hospital but operated as separate entities, are classified as
freestanding agencies under one of the categories listed above.
REHAB: Refers to agencies based in rehabilitation facilities.
SNF: Refers to agencies based in skilled nursing facilities.
b. Medicare-certified Hospices
Medicare added hospice benefits in October 1983, 10 years after the first hospice was
established in the United States. Hospices provide palliative medical care and supportive social,
emotional, and spiritual services to the terminally ill and their families. The number of
Medicare-certified hospices has grown from 31 in January 1984 to 2,287 in September 1998
(for a separate fact sheet with detailed information on hospices, please contact the Hospice
Association of America, 202/546-4759).
c. Non-Medicare-certified Agencies
The noncertified home care agencies, home care aide organizations, and hospices that remain
outside Medicare do so for a variety of reasons. Some do not provide the kinds of service that
Medicare covers. For example, home care aide organizations that do not provide skilled nursing
care are not eligible to participate in Medicare.
2 of 19
5/19/99 5:56
1999 Home Care Stats
http://www.nahc.org/Consumer/hcstats.hr
2. HOME CARE EXPENDITURES AND UTILIZATION
a. National Expenditures
HCFA projects the national expenditure for health care will total $1,147 billion in 1998 2 In the
past few years, growth in health care spending has slowed. Health spending grew at an average
annual rate of 5.3% in 1997 and 1998, maintaining a slowed growth trend begun in 1996. In
part, this slowdown in the rate of spending for health care has been attributed to the growing
influence of managed care as a payment mechanism and to the relatively low inflation rates for
the economy as a whole. For the early part of the next decade (2001-2007), HCFA projects an
average annual national health spending growth rate of 7.5%.
Table 2 provides the estimated 1996 national expenditures for personal health care by type.
Personal health care is a subset of total health spending and includes spending for health care
goods and services used by individuals. Of the $907 billion attributed to personal health care
spending in 1996, 62% was for hospital care and physician services and only a small fraction
(3%) was spent on home care.
Total home care spending is difficult to estimate due to limitations of data sources. Home care
spending was estimated to total $40 billion in 1997. Based on the prior year's trends, NAHC
estimates total spending for home care of $42 billion in 1998. However, some spending for
home care services is not included in the national health accounts data, for example, payments
made by consumers to independent providers and payments to hospital-based agencies by
sources other than Medicare and Medicaid.
Table 2. Personal Health Care Expenditures, 1996
Percent
Total personal health care
100
Hospital care
40
Physicians' services
22
Nursing home care
9
Drugs and other medical nondurables
10
Other professional services
6
Dentists' services
5
Home care
3
Other personal health care
3
Vision products and other medical
2
durables
Source: Levit, K.R. et al, "National Health Spending Trends in 1996," Health Affairs (January/February 1998): 35-51.
b. Health Care Prices
Information on the average cost to consumers of home care by visit type was collected through
the National Medical Expenditure Survey (NMES) in 1987. These figures were updated by
NAHC using the Medicare rates of growth in per-visit charges. Table 3 shows that on average a
home care visit cost $48 in 1987 and $75 in 1997. HCFA estimates the 1997 average benefit
payment per Medicare home health visit at $67.
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5/19/99 5:56
1999 Home Care Stats
http://www.nahc.org/Consumer/hcstats.h
Table 3. Average Cost Per Home Care Visit, 1987 and 1997
1987
1997ª
Average
$48
$75
Nurse
62
96
Therapist
57
89
Home care aide
34
53
Homemaker
33
51
Otherᵇ
56
87
Sources: Altman, B., and Walden, D. "Home Health Care: Use, Expenditures and Sources of Payment." National Medical
Expenditure Survey Research Findings 15, Publication No. 93-0040, Agency for Health Care Policy and Research
(AHCPR), Rockville, MD: Public Health Service, 1993.
Notes: a Updated by the average annual rate of increase of Medicare per-visit charges, which was 4.5% between 1987 and
1996 (HCFA, Office of Information Services).
b Includes social workers and other professionals.
c. Medicare Home Health
Medicare is the largest single payor of home care services. In 1996, Medicare spending
accounted for nearly 40% of total home care expenditures. Other public funding sources for
home care include Medicaid, the Older Americans Act, Title XX Social Services Block Grants,
the Veterans' Administration, and Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS). Private insurance comprised only a small portion of home care
payments. Close to one-fourth of home care service is financed through out-of-pocket payments
(see Table 4).
Table 4. Sources of Payment for Home Care 1996
Source of Payment
Percent
Total
100.0
Medicare
38.7
Medicaid
27.2
Private insurance
12.2
Out-of-pocket
20.5
Other and unknown
1.3
Source: Agency for Health Care Policy and Research, Center for Cost and Financing Studies, National Medical
Expenditure Survey data (aligned to National Health Accounts Data), December1997.
Note: Figures may not add to 100.0% due to rounding
Prior to BBA enactment the home health benefit represented a small but growing portion of
Medicare spending less than 9% of total benefit payments in 1997. However, since BBA
implementation, home health has experienced a dramatic downturn, and in 1998 made up only
6.2% of total Medicare outlays (see Table 5). About 42% of the estimated $210 billion 1998
Medicare benefit payments will go to hospitals and approximately 15% to physicians. Hospice
payments will account for one percent of the total Medicare benefit payments in 1998.
4 of 19
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1999 Home Care Stats
http://www.nahc.org/Consumer/hcstats.hr
Table 5. Medicare Benefit Payments, 1998 and 1999
1998 (estimated)
1999 (projected)
Amount
Percent of
Amount
Percent of
(millions)
Total
(millions)
Total
Total Medicare Benefit
Payments
$210,136
100.0
$222,002
100.0
Part A
Hospital care
88,236
42.0
88,310
39.8
Skilled nursing facility
13,408
6.4
13,835
6.2
Home health agency**
12,790
6.1
6,171
2.8
Hospice
2,080
1.0
2,181
1.0
Managed Care
17,807
8.5
20,493
9.2
Total
$134,321
64.0
$130,990
59.0
Part B
Physician
31,595
15.0
32,967
14.8
Durable Medical Equipment
4,246
2.0
4,214
1.9
Carrier Lab
4,779
2.3
4,306
1.9
Hospital
10,625
5.1
11,082
5.0
Home Health
273
0.1
8,420
3.8
Intermediary Lab
1,683
0.8
1,765
0.8
Other Intermediary
4,228
2.0
4,744
2.1
Managed Care
14,132
6.7
18,793
8.5
Total
$75,815
36.1
$91,012
41.0
Source: HCFA, Office of the Actuary, unpublished estimates for the President's fiscal year 2000 budget (December 1998).
* Medicare Part A totals do not include peer review organizations (PROs). Figures may not add to totals due to rounding.
** Home health outlays do not include the transfer of funds between the trust funds.
In 1997, HCFA estimated 38.5 million aged and disabled persons were enrolled in the Medicare
program. An estimated 3.4 million enrollees received fee-for-service home health services in
1997, representing a greater than 40% rise from the number of home health recipients in 1990.
Table 6 shows the growth over time in the Medicare home health benefit. For the period
1990-1997, Medicare home health expenditures increased from $3.9 billion to an estimated
$17.2 billion. Most of the rise in spending occurred as a result of the increase in visits, which
increased from 70 million in 1990 to an estimated 270 million in 1997. Growth in the Medicare
home health benefit between 1990 and 1996 can be attributed to specific court decisions,
legislative expansions of the benefit, and to a number of sociodemographic trends, which had
fostered growth in the program from the beginning.
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Table 6. Medicare Fee-for-Service Home Health Outlays, Clients and Visits for Selected Years,
1967-1997
Year Outlays ($ millions) Clients (1000s) Visits (1000s)
1967
$ 46
n/a
n/a
1980
662
957
22,428
1985
1,773
1,589
39,742
1990
3,860
1,940
69,532
1991
5,566
2,223
99,183
1992
7,724
2,523
132,494
1993
10,198
2,868
168,029
1994
13,269
3,175
220,495
1995
15,976
3,457
266,261
1996
17,266
3,583
283,936
1997
17,241
3,370
269,919
Source: HCFA, Office of the Actuary and Bureau of Data Management and Strategy.
Note: The 1990 to 1997 data was updated June 1998.
The BBA (PL 105-33) introduced a new per-beneficiary limit, designed to reduce growth in
Medicare home health expenditures, that restricts payments to agencies under Medicare to the
lowest of the agency's actual, allowable costs, its aggregate per-visit cost limits, or its aggregate
per-beneficiary annual limit. The Lewin Group estimated that 90% of agencies would have costs
that exceed BBA limits in 1998 by an average of 32% without a change in Medicare practice
patterns.3 These reductions have resulted in agency closures throughout the country (contact
NAHC for more information).
Medicare hospice expenditures have grown from $112 million in 1987 to an estimated $2.2
billion in 1998. An estimated 338,273 beneficiaries received hospice services under Medicare
in 1996 (see Hospice Facts & Statistics for more detailed information).
d. Medicaid Home Care
As in the case of Medicare, home health services represent a relatively small part of total
Medicaid payments. Table 7 shows that close to half of the $117 billion in Medicaid benefit
payments in fiscal year (FY) 96 went for hospital and skilled nursing facility services. Home
care services comprised 9% of the payments. Hospice is an optional Medicaid service that is
currently offered by 42 states. Payments for hospice services were estimated at $319 million in
FY96.
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Table 7. Medicaid Expenditures, by Type of Service, Fiscal Years 1994, 1995, and 1996
Fiscal Year
1994
1995
1996
In billions
Total Vendor Payments
$108.3
$120.1
$117.1
Percent of total
Nursing facility services
25.0
24.2
24.2
Inpatient services
26.1
24.0
22.3
General hospitals
24.2
21.9
20.6
Mental hospitals
1.9
2.1
1.7
Other care
8.6
10.0
8.6
Intermediate care facility (MR)
7.7
8.6
7.1
servicesᵃ
Prescribed drugs
8.2
8.1
8.5
Home health servicesᵇ
6.5
7.8
9.0
Physician services
6.6
6.1
5.7
Outpatient hospital services
5.9
5.5
5.3
Clinic services
3.5
3.6
3.6
Laboratory and radiological
1.1
1.0
0.9
services
Early and periodic screening
0.9
1.0
1.2
Source: Health Care Financing Administration, Division of Medical Statistics. Data are from the Form HCFA-2082.
Notes: a "MR" indicates facilities for persons with mental retardation.
b Includes home health, personal care, and home and community-based waiver payments.
Table 8 shows the growth in the Medicaid home health benefit since FY75. Between FY96 and
FY97, expenditures increased from $10.6 billion to $12.2 billion, an increase of 15%.
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Table 8. Medicaid Home Health Expenditures and Recipients, for Selected Years, 1975-1997
Vendor
Payments
Recipients
Fiscal Year
($millions)
(1000s)
1975
70
343
1980
332
392
1985
1,120
535
1990
3,404
719
1991
4,101
812
1992
4,888
926
1993
5,601
1,067
1994
7,049
1,376
1995
9,406
1,639
1996
10,583
1,633
1997
12,237
1,861
Source: HCFA, Division of Medicaid Statistics. Data are derived from Form HCFA-2082.
e. Managed Care
Health care services in the United States are increasingly financed through managed care
organizations. A managed care organization, including health maintenance organizations,
typically finances health care services through a negotiated prepaid rate to health care providers.
A fully capitated contract specifies a lump sum payment per enrollee to cover all care provided
through the plan, but there are many variations. In contrast, traditional health insurance pays
providers based on the number of services delivered with few limitations on which providers
would be paid, a payment arrangement commonly termed fee-for-service
Managed care is most prevalent in the employer-based health insurance market. Three out of
four workers with health insurance received health insurance through a managed care plan in
1995. 4 Managed care enrollment has increased among Medicaid enrollees, particularly in states
that have federal waivers to convert their Medicaid program to a managed care program. As of
June 30, 1996, 40% of all Medicaid beneficiaries were enrolled in managed care. 5 Medicare
managed care has increased at a slower pace. As of August 1997, about 14% of Medicare
beneficiaries were part of Medicare managed care.⁶
The increasingly competitive health care market has created incentives for home care agencies
to enter managed care provider networks. However, little is known about the extent to which
home care agencies have entered into managed care arrangements. A preliminary study
conducted for HCFA compared patient outcomes and total expenditures for Medicare home
health clients who received services through Medicare managed care and a group who received
services through fee-for-service Medicare home health. The authors found the managed care
clients used less home health resources but also had less favorable outcomes on average than
their Medicare fee-for-service counterparts, suggesting the need for further research on the
relationship between volume of home care services and outcomes.⁷
3. HOME CARE RECIPIENTS
Based on a need for assistance in performing basic life activities known as activities of daily living or
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instrumental activities of daily living, research from the Disability Statistics Rehabilitation Research
and Training Center indicates that as of 1994, approximately 16% of the US population aged 65 and
over and approximately 2.5% of US population ages 18-64 could benefit from home care services. 8
Most receive services from so-called informal caregivers-family members, friends or others who
provide services on an unpaid basis.
The NMES findings indicate that 5.9 million individuals, roughly 2.5% of the US population, received
formal home care services in 1987. Of these recipients, nearly half were older than 65, and the amount
of home care they used tended to increase with age. About 40% of the home care recipients had
functional limitations in one or more activities of daily living. Age and functional disability are likely
predictors of the need for home care services. By projecting the NMES estimate forward based on
Census Bureau population projections, NAHC estimates that 8 million people received home care
services in 1998.
A more recent survey, conducted by the National Center for Health Statistics (NCHS), profiled
persons discharged from home health agencies in 1995-96 and collected information on client
diagnoses. 2 Table 9 shows two-thirds of discharges were over age 65 and 64% were women. Table 10
shows that 22% of home health patients discharged from home health agencies in 1995-96 had
conditions related to diseases of the circulatory system as their primary diagnosis. People with heart
disease, including congestive heart failure, made up about half of this group. Cancer, diabetes, and
hypertension were also frequent admission diagnoses for home health patients.
Table 9. Percent of Home Health Discharges by Age, Sex, Race, and Marital Status, 1995-96
Characteristic
Percent
Characteristic
Percent
Characteristic
Percent
Age
Gender
Marital Status at Discharge
under 45 Years
19.5
Male
36.5
Married
37.0
45-54 years
5.9
Female
63.5
Widowed
24.6
55-64 years
8.4
Divorced or separated
5.0
65-69 years
10.8
Race
Single or never
18.4
70-74 years
13.2
White
62.8
married
75-79 years
12.4
Black
7.4
Unknown
15.0
80-84 years
14.2
Other
2.6
85 years and older
15.4
Unknown
27.2
Unknown
*
Source: National Center for Health Statistics (NCHS) Advance Data No. 297. April 16, 1998.
Note: Percentages based on a national sample representing 7,775,700 home health patients discharged from October 1995
to September 1996.
*Figure does not meet standard of reliability or precision
Table 10. Percent of Home Health Discharges by First-listed and All-listed Diagnoses at
Admission, According to Type of Care Received: United States 1995-96
Primary Diagnosis
All-listed Diagnoses
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Admissions
ICD-9-CM
Diagnosis
Code
All Discharges
Percent
All Discharges
Percent
Total
8,168,900
100.0
21,953,900
100.0
Infectious and
parasitic diseases
001-139
166,400
*1.9
385,700
1.7
Human
immunodeficiency
virus (HIV) disease
042
*36,700
*
*57,200
*
Neoplasms
140-239
948,200
8.6
1,661,300
5.8
Malignant
neoplasms
140-208,230-234
923,000
8.3
1,560,600
5.4
Malignant
neoplasm of
trachea, bronchus,
and lung
162,197.0,197.3
27,000
*0.5
213,800
0.5
Malignant
neoplasm of breast
174-175,198.81
*175,600
*
*233,300
*1.0
Malignant
neoplasm of
prostate
185
34,600
*
*82,700
*0.3
Endocrine,
nutritional, and
metabolic diseases,
and immunity
disorders
240-279
456,200
5.8
1,912,300
8.9
Diabetes mellitus
250
333,400
4.3
1,256,600
5.9
Diseases of the
blood and blood
forming organs
280-289
*130,500
*1.7
488,500
2.3
Mental disorders
290-319
138,800
1.7
728,400
3.4
Diseases of the
nervous system and
sense organs
320-389
271,700
3.3
870,800
4.0
Diseases of the
circulatory system
390-459
1,776,900
22.4
5,779,300
26.7
Essential
hypertension
401
260,700
3.3
1,717,400
8.0
Heart disease
391-392.0,
393-398, 402,
404, 410-416,
420-429
999,100
12.5
2,884,400
13.3
Diseases of the
respiratory system
460-519
639,200
8.0
1,369,200
6.2
Diseases of the
digestive system
520-579
314,100
4.0
973,700
4.5
Diseases of the
genitourinary
system
580-629
181,300
2.2
711,100
3.3
Diseases of the skin
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and subcutaneous
tissue
680-709
190,100
2.4
421,800
2.0
Diseases of the
musculoskeletal
system and
connective tissue
710-739
629,200
8.1
1,617,600
7.6
Symptoms, signs,
and ill-defined
conditions
780-799
578,000
7.4
1,853,900
8.6
Injury and
poisoning
800-999
974,400
12.5
1,343,800
6.3
Supplementary
classification
V01-V82
565,500
7.3
1,420,200
6.7
All other diagnoses
630-676,
740-759,
760-779
174,900
2.2
416,500
2.0
Unknown or no
diagnosis
*
*
Note: Percentages based on a national sample representing 7,775,700 home health patients discharged from October 1995
to September 1996.
*Figure does not meet standard of reliability or precision.
Medicare home health utilization by principal diagnosis is similar to the NCHS data. In the HCFA
data, diseases of the circulatory system also accounted for almost 30% of the Medicare beneficiaries
admitted to home care in 1996. Medicare home health patients with neoplasms comprised 6.8% of all
the program's home care admissions; endocrine, nutritional and metabolic diseases, and immunity
disorders accounted for 9.1%. Diseases of the respiratory system made up 8.1%; diseases of the
musculoskeletal system comprised 10.2%; and injury and poisoning accounted for 10.5%.
Many hospital patients are discharged to home care services for continued rehabilitative care. As
hospital stays shortened in the early 1980s, the percentage of Medicare patients discharged to home
health care increased from 9.1% in 1981 to 17.9% in 1985. More recently, the Medicare Payment
Advisory Commission (MedPAC) estimated that 16% of Medicare hospital patients used home health
care within 30 days of discharge in FY96. Table 11 shows the diagnostic-related groups with the most
discharges to home health care following a hospitalization.
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Table 11. Diagnoses With Highest Number of Beneficiaries Using Home Health Care Within
One Day of Discharge from an Acute Care Hospital, Fiscal Year 1996
Discharges to Home
Percent of Post-Acute
Percent of
Health Care
Cases Discharged to
Home Health
Home Health Care
Care Cases
DRG
Description
Total
Percent
127 Heart failure and shock
59,510
9.5%
49.4%
6.9%
209 Major joint and limb
reattachment procedure of
lower extremity
51,086
15.0
22.9
5.9
89 Simple pneumonia and
pleurisy, age >17 with CC
31,750
8.3
36.9
3.7
106 Coronary bypass with cardiac
catheterization
29,148
29.4
71.8
3.4
88 Chronic obstructive
pulmonary disease
28,709
8.6
52.4
3.3
148 Major small and large bowel
procedures with CC
27,489
20.7
55.3
3.2
14 Specific cerebrovascular
disorders except transient
ischemic attack
27,455
8.8
17.4
3.2
107 Coronary bypass without
cardiac catheterization
18,338
28.8
75.8
2.1
121 Circulatory disorders with
AMI and cardiovascular
complication
17,266
13.6
50.9
2.0
478 Other vascular procedures
with CC
13,931
11.8
48.0
1.6
Source: Medicare Payment Advisory Commission analysis of MedPAR data from the Health Care Financing
Administration. (June 1998)
Notes: Cases where the patient died or was transferred to another acute care hospital are excluded from the calculations.
Post-acute care use does not include home health episodes that began before a patient was hospitalized or rehabilitation
facility and long-term care hospital stays that began in fiscal year 1996 but ended in fiscal year 1997.
DRG=diagnosis-related group. CC=complication and/or comorbidity. AMI=acute myocardial infarction.
4. CAREGIVERS
a. Informal Caregivers
Estimates indicate that almost three-quarters of elderly persons with severe disabilities receiving
home care services in 1989 relied solely on family members or other unpaid help. 10 Eight of 10
of these informal caregivers provide unpaid assistance for an average of four hours a day, seven
days a week. Three-quarters of informal caregivers are female, and nearly one-third are over age
65. A 1996 telephone survey of US households estimated there were 22 million US households
with at least one member who provided some level of unpaid assistance to a spouse, relative, or
other person older than age 50.11
b. Formal Caregivers
Formal caregivers include professionals and paraprofessionals who provide inhome health care
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and personal care services, and are compensated for the services they provide. The Bureau of
Labor Statistics (BLS) and HCFA provide data on these employees. However, agency
definitions and methods of counting are different. BLS provides an occupational classification
for "home health care services," which excludes hospital-based and public agency workers. Its
method of counting is "number of employees." HCFA limits its statistics to employees of
certified home health agencies. Furthermore, its survey presents data on full-time equivalents
(FTEs).
In Table 12, BLS estimates that more than 500,000 persons were employed in home health care
agencies, with the exclusions described above. HCFA recorded 372,453 FTEs employed in
Medicare-certified agencies as of September 1998. The HCFA FTE counts show a decline of
43,000 FTEs since December 1997. Using either method, the largest numbers of employees are
home care aides and registered nurses.
Table 12. Numbers of Home Health Care Workers, 1996 and Medicare-certified Agency FTEs,
1998
Type of
Number of
Number of
Employee
Employeesᵃ
FTEsᵇ
RNs
134,443
132,796
LPNs
47,651
27,775
Physical
11,236
13,619
Therapists
Home Care
318,124
124,218
Aides
Occupational
4,344
3,574
Therapists
Speech
3,304
1,985
Pathologists
Social Workers
8,995
6,895
Other
137,303
61,591
Totals
665,400
372,453
Sources: a U.S. Department of Labor, Bureau of Labor Statistics, National Industry-Occupation Employment Matrix, data
for 1996. Excludes hospital-based and public agencies.
b Unpublished data on FTEs in Medicare-certified home health agencies as of September 1998 from the HCFA Center for
Information Systems, Health Standards and Quality Bureau.
The 1996 number of employees data by job category presented in Table 12 is based on the
Current Population Survey, which is conducted every three years. However, BLS also collects
monthly information on employment for all workers, which includes home care services. BLS
monthly statistics present data at an aggregate level combining all job titles. Table 13 shows the
calendar year home care services employment for 1993-1997, based on BLS monthly statistics.
During the period 1993-1997, home care employment grew from 510,000 employees to 713,000
employees-a 7.9% average annual rate of growth. However, in 1998 total home care
employment declined by 7.2%.¹²
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Table 13. Home Health Care Services Total Employment, 1993-1998
Total Number of
Year
Employees
1993
510,000
1994
596,000
1995
656,000
1996
695,000
1997
713,000
1998
662,000
Sources: US Department of Labor, Bureau of Labor Statistics: Establishment Data, 1999. BLS online.
Note: Excludes hospital-based and public home care agency employees. All numbers are as of December of the
corresponding year.
c. Productivity
Home care agencies frequently ask for information on employee productivity based on the
average number of visits provided. Several studies of nursing productivity reveal that nurses
deliver an average of five visits per day (see Table 14). Nurses who specialize in pediatric care
average 2.4 visits per day, while IV nurses average as many as other nurses.
Table 14. Comparative Findings of Home Care Nurse Productivity
Study
Patients per Day
Spoelstraᵃ, 1996
5.0
Caie-Lawrenceᵇ, 1990
5.0
C.S. Hedtkeᶜ, 1992
4.8
1. Pediatric RNs
2.4
2. IV RNs
4.9
NAHCᵈ, 1997
1. RNs
4.5
2. LPNs
5.0
Sources: a Spoelstra S. "Productivity of Registered Nurses in Home Health Care: A Nationwide Survey." CARING
Magazine, 1996.
b Caie-Lawrence J.A. Time Study of Home Care Nurses Poster Presentation, Sixth National Nursing Symposium-Home
Health Care, May 17, 1990; Ann Arbor, MI.
c Hedtke C.S. "How do home care nurses spend their time?" Journal of Nursing Administration, 1992; 22(1):18-22.
d National Association for Home Care Home Care and Hospice Productivity Survey, 1997.
In 1996, NAHC surveyed its member home care and hospice agencies about their staff
productivity. 13 The survey was nonrandom, and therefore results are not statistically reliable as
estimates of home care agency productivity in general. The productivity averages by discipline
are presented in Table 15. These findings were limited to salaried and hourly employees making
home care visits from January to March 1996. Data for hospice staff were reported separately.
The productivity measure is based on a formula and definition developed by the home care
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industry and published in the Uniform Data Set for Home Care and Hospice. 14
Table 15. Staff Productivity in Home Care
Number of Visits per 8-Hour Day
Number
25th
75th
of
Mean
Median percentile percentile Agencies
Home Care Aide
5.2
5.0
4.2
5.8
255
III*
Practical Nurse
5.0
5.0
3.7
6.1
96
(LPN)
Registered Nurse
4.5
4.4
3.5
5.2
253
(RN)
Occupational
4.9
4.5
3.7
5.5
80
Therapist
Physical Therapist
6.0
5.3
4.4
7.0
126
Speech
4.6
4.0
3.2
5.4
57
Pathologist
Social Worker
3.0
2.4
1.8
3.5
89
(MSW)
Source: Home Care & Hospice Staff Productivity, NAHC, 1997.
Notes: The mean and median are both measures of central tendency. The median represents the point where half the
agencies were higher and half were lower. The mean is the sum of each agency's productivity divided by the number of
agencies providing information.
*A home care aide III is trained to provide medically directed services.
d. Compensation
Starting in 1996, NAHC has worked with the Hospital and Healthcare Compensation Service
(HCS) to conduct an annual survey of compensation in the home care and hospice industry.
This agreement avoids duplication of effort in data collection by combining the efforts of both
organizations. Summary results for the 1998 HCS survey are shown in Table 16 and Table 17.
As in past surveys, compensation is reported for the median salary, rather than mean salary, to
reduce the likelihood that very high or very low salaries would skew results.
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Table 16. Average Compensation of Home Health Agency Executives, October 1998
Salary Range by Percentile
25th
Median
75th
Executive Director/CEO
$50,986
$59,586
$73,564
Chief Operating Officer/Program Director
50,021
57,211
73,077
Top Level Financial Executive
44,720
57,200
71,687
Director of Nurses/Clinical Services
42,137
47,700
53,988
Director of Social Work and Counseling
36,300
41,600
49,525
Utilization Review/Quality Assurance
Manager
40,500
45,000
50,960
Source: Homecare Salary & Benefits Report 1998-1999, NAHC/HCS, October 1998.
Table 17. Average Compensation of Home Health Agency Caregivers, October 1998
Per-Hour Rates by Percentile
Per-Visit Rates by Percentile
25th
Median
75th
25th
Median
75th
Registered Nurse
$16.89
$18.22
$20.00
$24.00
$28.98
$33.00
Licensed Practical
11.84
13.00
14.41
16.12
18.00
22.00
Nurse
Occupational
21.04
23.54
26.74
41.40
46.00
50.00
Therapist
Physical Therapist
23.39
26.51
29.86
40.22
45.39
50.00
Respiratory Therapist
13.87
15.61
17.53
31.90
35.00
41.50
Speech/Language
19.54
21.74
25.97
42.00
46.07
50.21
Pathologist
Medical Social
15.46
17.41
19.78
38.00
45.00
50.00
Worker
Home Care Aide III
7.85
8.76
9.28
11.59
12.00
13.50
Source: Homecare Salary & Benefits Report, 1998-1999, NAHC/HCS, October 1998.
5. COST EFFECTIVENESS
In many cases, home care is a cost-effective service, not only for individuals recuperating from a
hospital stay but also for those who, because of a functional or cognitive disability, are unable to take
care of themselves. Table 18 compares the average Medicare charges on a per-day basis for hospital
and skilled nursing facility to the average Medicare charge for a home health visit. The following
section lists some examples of cost-effective home care. However, it should be noted that
cost-effectiveness is not the only rationale for home care. In fact, the best argument for home care is
that it is a humane and compassionate way to deliver health care and supportive services. Home care
reinforces and supplements the care provided by family members and friends and maintains the
recipient's dignity and independence, qualities that are all too often lost even in the best institutions.
Furthermore, home care allows patients to take an active role in their care, becoming members of a
multidisciplinary health care team. 15 Several research studies conducted in the past several years have
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compared inpatient care to home care costs for a specific group of patients. The cost savings data for
six of these studies are summarized in Table 19. The information has been aggregated at a monthly
level for purposes of comparison.
Table 18. Comparison of Hospital, SNF, and Home Health Medicare Charges, 1995-1997
1995
1996
1997
Hospital charges per
day
$1,909
$2,071
$2,121
Skilled nursing
facility charges per
day
401
443
454
Home health charges
per visit
84
86
88
Sources: The 1995 and 1996 hospital and SNF Medicare charge data are from the Annual Statistical Supplement, 1997,
to the Social Security Bulletin, Social Security Administration (December 1997). Home care information from HCFA,
Office of Information Services.
Note: Additional years are projected using consumer price index forecasts from the Bureau of Labor Statistics' web site
and "The Economic and Budget Outlook: Fiscal Years 1999-2008" Congressional Budget Office web site (January 1998).
Table 19. Cost of Inpatient Care Compared to Home Care, Selected Conditions
Per-patient Per-
Per-patient Per-
Per-patient Per-
month Hospital
month Home Care
month Dollar
Conditions
Costs
Costs
Savings
Low birth weightᵃ
$26,190
$330
$25,860
Ventilator-dependent adultsᵇ
21,570
7,050
14,520
Oxygen-dependent childrenᶜ
12,090
5,250
6,840
Chemotherapy for children with
cancerᵈ
69,870
55,950
13,920
Congestive heart failure among the
elderlye
1,758
1,605
153
Intravenous antibiotic therapy for
cellulitis, osteomyelitis, others
12,510
4,650
7,860
Sources:
a Casiro, OG, McKenzie, ME, McFayden, L, Shapiro, C, Seshia MMK, MacDonald, N, Moffat, M, and Cheang, MS.
"Earlier Discharge with Community-based Intervention for Low Birth Weight Infants: A Randomized Trial." Pediatrics,
1993, 92(1), 128-134.
b Bach, JR, Intinola, P, Alba, AS, and Holland, IE. "The Ventilator-assisted Individual: Cost Analysis of
Institutionalization vs. Rehabilitation and In-home Management." Chest, 1992, 101(1), 26-30.
c Field, AI, Rosenblatt, A, Pollack, MM, and Kaufman, J. "Home Care Cost-Effectiveness for Respiratory
Technology-dependent Children." American Journal of Diseases of Children, 1991, 145, 729-733.
d Close, P, Burkey, E, Kazak, A, Danz, P, and Lange, B. "A Prospective Controlled Evaluation of Home Chemotherapy for
Children with Cancer." Pediatrics, 1995, 95(6), 896-900. Note: The study found that the daily charges for chemotherapy
were $2,329±627 in the hospital and $1,865±833 at home. These charges were multiplied by 30 days reflecting the above
per-patient per-month costs.
e Rich, MW, Beckham, V, Wittenberg, C, Leven, C, Freedland, K, and Carney, RM. "A Multidisciplinary Intervention to
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Prevent the Readmission of Elderly Patients with Congestive Heart Failure." The New England Journal of Medicine. 1995,
333(18), 1190-1195.
f William, DN, et al. "Safety, Efficacy, and Cost Savings in an Outpatient Intravenous Antibiotic Program." Clinical
Therapy 1993, 15, 169-179, cited in Williams, D. "Reducing Costs and Hospital Stay for Pneumonia with Home
Intravenous Cefotaxime Treatment: Results with a Computerized Ambulatory Drug Delivery System." The American
Journal of Medicine. 1994, 97(2A), 50-55.
Note: The estimated hospital cost/day/patient is $417 and the estimated savings/day/patient is $262. These costs were
multipled by 30 days, reflecting the above patient per-month costs.
Several additional studies of home care cost effectiveness are summarized in the following paragraphs.
a. Psychiatric Care
An inhome crisis intervention program developed for psychiatric patients in Connecticut was
effective in reducing hospital admissions, lengths of stay, and readmissions. A two-year analysis
of more than 600 patients showed that 80.7% of patients referred for hospital care could be
treated at home instead. When inpatient admissions were necessary, the average length of stay
was reduced from 11.97 days to 7.48 days by adding elements of the inhome care program; and
patients who received home care services were less likely to be readmitted for hospital care
(11.8% of home care patients were readmitted compared to 45.9% of patients who did not
receive home care services). 16
b. Terminally Ill Veterans
A home care program for terminally ill veterans reduced hospital per-capita costs by $971. In
the six-month study, patients receiving home care used 5.9 fewer hospital days than those in the
control group. No differences were found in patient survival, activities of daily living, cognitive
functioning, or morale. However, patient and caregiver satisfaction with care was significantly
better among the patients receiving home care. 17
c. Patients with COPD
An innovative home care program for patients with chronic obstructive pulmonary disease
(COPD) that was tested in Connecticut found significant cost savings. The overall goal of the
program was to provide more comprehensive home care services to COPD patients who
previously required frequent hospitalizations. Monthly costs for hospitalizations, emergency
room visits, and home care fell from $2,836 per patient before the intervention to $2,508 per
patient-a net savings of $328 per patient per month. 18
d. Patients with Congestive Heart Failure
The impact of intensive home care monitoring on the morbidity rates of elderly patients with
congestive heart failure was the focus of another study. The study found that with intensive
home care surveillance, the total hospitalization rate dropped from 3.2 admissions per year to
1.2 admissions per year and the length of stay decreased from 26 days per year to 6 days per
year. Cardiovascular admissions declined from 2.9 admissions per year to 0.8 admissions per
year, and length of stay decreased from 23 days per year to four days per year. An inhome
program also resulted in significant functional status improvement in elderly patients with
congestive heart failure. 19
Endnotes
1. Health Care Financing Administration, Office of the Actuary, National Health Statistics Group, unpublished data on
hospital-based and non-hospital-based home health expenditures, 1960-1997. NAHC based its 1998 projection on the 4.8%
average annual rate of growth in freestanding home health expenditures from 1996-1998.
2. Smith, S., M. Freeland, S. Heffler, D. McKusick, et al., "The Next Ten Years of Health Spending: What Does the Future
Hold?" Health Affairs 17, no. 5 (1998).
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3. The Lewin Group, "An Impact Analysis for Home Health Agencies of the Medicare Home Health Interim Payment System of
the 1997 Balanced Budget Act." Washington, DC: National Association for Home Care. (August 11, 1998).
4. Jensen, Gail A., M.A. Morrisey, S. Gaffney, and D.K. Liston. "The New Dominance of Managed Care: Insurance Trends in
the 1990s." Health Affairs 16, no. 1 (January/February 1997):136.
5. Health Care Financing Administration. "Managed Care in Medicare and Medicaid." Fact Sheet. (February 20, 1998).
6. Ibid.
7. Shaughnessy, P.W., R.E. Schlenker, D.F. Hittle, et al., A Study of Home Health Care Quality and Cost Under Capitated and
Fee-For-Service Payment Systems, Vol. 1: Summary (Denver: Center for Health Policy Research, 1994).
8. US Department of Education, National Institute on Disability and Rehabilitation Research, Disability Statistics Rehabilitation
Research and Training Center, University of California, San Francisco. "Disability Statistics Abstract," Number 17,
November 1996.
9. Haupt, Barbara J. National Center for Health Statistics, "An Overview of Home Health and Hospice Care Patients: 1996
National Home and Hospice Care Survey," Advance Data, no. 297 (April 16, 1998).
10. US Bipartisan Commission on Comprehensive Health Care. The Pepper Commission Final Report: A Call for Action. S.Prt.
101-114. Washington, DC: Government Printing Office, 1990.
11. National Alliance for Caregiving and the American Association for Retired Persons, Family Caregiving in the US: Findings
from a National Survey, Washington, DC: Author (1997).
12. Bureau of Labor Statistics, online (1/11/99).
13. National Association for Home Care, Home Care and Hospice Staff Productivity, Washington, DC: Author, 1997.
14. The Uniform Data Set for Home Care and Hospice, Washington, DC: NAHC Research Department.
15. Sheldon, P., and M. Bender, "High-Technology in Home Care," Community Health Nursing and Home Health Nursing, 3
(1994): 507-519.
16. Pigott, H.E., and L. Trott. "Translating Research into Practice: The Implementation of an In-home Crisis Intervention Triage
and Treatment Service in the Private Sector," American Journal of Health Quality 8, no. 3 (1993): 138-144.
17. Hughes, S.L., J. Cummings, F. Weaver, L. Manheim, B. Braun, and K. Conrad. "A Randomized Trial of the Cost
Effectiveness of VA Hospital-based Home Care for the Terminally III," Health Services Research 6 (1992): 801-817.
18. Haggerty, M.C., R. Stockdale-Woolley, and S. Nair. "Respi-Care: An Innovative Home Care Program for the Patient with
Chronic Obstructive Pulmonary Disease," Chest 3 (1991): 607-612.
19. Kornowski, R., D. Zeeli, M. Averbuch, A. Finkelstein, et al. "Intensive Home-care Surveillance Prevents Hospitalization and
Improved Morbidity Rates Among Elderly Patients with Severe Congestive Heart Failure," American Heart Journal 4
(1995): 762-766.
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1997 Regulatory Blueprint for Action
I. Survey and Certification
Support Required Quality Improvement Program
Support Proposed Quality Assessment/ Performance Improvement Program for Hospice with Certain
Conditions
Clarify Separate Entity
Continue to Allow HHAs to Provide Services Under Arrangements
Continue Flexibility in Required Covered Services Provided by HHAs
Increase Flexibility in the Application of the Conditions of Participation
Abolish Prescriptive and Burdensome Procedural Requirements Related to Oral Orders
Revise Organizational Structure Requirements
Make Personnel Qualifications Consistent and Require Criminal Background Checks
Focus Aide Supervision on Individual Aides Rather than Each Patient
Improve Aide Qualifications to Protect Consumers
Require Region office Review of Challenges to Deficiencies
Promote Equitable Application of Regulations Implementing OBRA-87 Sanctions
Increase Training for Home Health and Hospice Surveyors
Modify Hospice Regulations for Inpatient Respite Care
Survey Frequency for Medicare Hospice Providers Should be Based on Performance
SUPPORT REQUIRED QUALITY IMPROVEMENT PROGRAM
ISSUE: The current Conditions of Participation (CoP) require quarterly clinical record reviews and an
annual agency evaluation but not an overall patient-centered quality management program. The Health Care
Financing Administration (HCFA) proposes including requirements for an internal quality improvement
management system based on a standard patient assessment and outcomes monitoring.
The current evaluation of HHAs, although improved with home visits by surveyors, does not adequately
assess the quality of care delivered. HCFA proposes that HHAs be required to use standard patient
assessment items and outcome measures to provide data by which quality can be assessed. HCFA also
proposes that if reliable and valid patient outcomes data were available they could focus surveys as follows:
1) new agencies, 2) complaints, 3) agencies where the data indicate a problem, and 4) random surveys of the
remaining agencies.
RECOMMENDATION: Support requirements for quality improvement based on patient outcomes. Such a
requirement should allow flexibility in design of the quality management program. Specific data
requirements should not be finalized until the results of the current HCFA demonstration project are
evaluated to ensure implementation of effective and efficient regulations.
1. Broad parameters of quality improvement requirements should be specified but providers should be
allowed to design their own quality management program.
2. Evaluation of an HHA's quality is more appropriate through patient outcome measures. However, the
following conditions must be met in implementing an outcome measurement system.
a. Indicators that are reliable and valid.
b. Number of outcome measures limited to those that most accurately predict quality.
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c. Method for case-mix adjustment.
d. Standard assessment items limited to those items needed for outcomes measurement and
case-mix adjustment (agencies may develop their own assessment tool which will include the
required assessment items plus additional assessment items desired for care planning purposes).
e. A system that is simple and has clinical utility for all patients, not just Medicare.
f. Mechanism for HCFA to validate agency data.
g. Ongoing evaluation of the entire system so that changes can be made as needed.
3. The percentage of random surveys should be phased in so that a high proportion of agencies receive
surveys initially while the system is new and decrease as it is shown that the data is sufficient to
identify agencies that have quality problems, e.g., first year 75%, second year 50%, third year 25%,
etc.
RATIONALE: The ideal quality management system is based on what happens to the patients served.
HCFA has funded research to develop outcome indicators for home health care. The current HCFA
demonstration project must be completed before an outcomes based system can be used with confidence.
Because of the variety of factors that can affect outcomes that are not controlled by the HHA, it is important
to have adequate adjustments (e.g., case-mix adjustment) to compensate for these factors. Quality assessment
should not rely solely on outcome measures; limited structure and process measures are appropriate.
Such a quality system will have the tendency to involve massive data collection unless controlled. Every
effort must be made to keep data collection and paperwork burden to a minimum so that resources can be
used for patient care rather than paperwork.
[TOP]
SUPPORT PROPOSED QUALITY ASSESSMENT/PERFORMANCE IMPROVEMENT PROGRAM
FOR HOSPICE WITH CERTAIN CONDITIONS
ISSUE: The proposed hospice conditions of participation are expected to require hospices to develop,
implement, maintain, and evaluate an effective, data driven quality assessment and performance
improvement program. HCFA has indicated its intent to require hospices to either develop their own or use
currently available systems of measures to track patient outcomes in such areas as pain management, quality
of life, skin integrity, and patient satisfaction. The requirement will include retaining the information in a
data base that permits analysis over time. HCFA has also indicated that it will not be initiating any research
and demonstration projects to develop systems of measures for the hospice industry, but in the future it may
require that hospices report performance data into a national data base.
RECOMMENDATION: HAA agrees that agencies should be responsible for ongoing quality
assessment/program improvement (QA/PI) programs based on patient outcomes. Such requirements should
recognize that there does not yet exist a valid and reliable data set of performance measures for use in
hospice care and allow flexibility in design of individual hospice QA/PI programs.
1. Broad parameters of quality improvement requirements should be specific but providers should be
allowed to identify, prioritize, and phase in specific systems of measures to capture outcomes that they
believe are essential to their provision of optimal hospice care.
2. The following conditions must be met in implementing any outcome measurement system for
hospices:
a. Reliable and valid indicators.
b. Number of outcome measures limited to those that most accurately predict quality.
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c. Method for case-mix adjustment.
d. Standard assessment limited to those items needed for outcomes measurement and case-mix
adjustment (agencies may develop their own assessment tool and will use additional assessment
items for care planning purposes).
e. A system that is simple and has clinical utility for all patients, not just Medicare.
f. Mechanism for HCFA to validate agency data.
g. Ongoing evaluation of the entire system so that changes can be made if it does not work
properly.
3. HCFA should study the application of the home care outcome measures/OASIS to hospice care.
RATIONALE: The ideal QA/PI is based on what happens to the patients. However, currently there are no
standard, valid, and reliable outcome measures for hospice. Hospices will need to create their own systems of
measures or borrow from others because HCFA does not plan to initiate hospice-specific research and
demonstration projects. There will be an insufficient level of confidence in the results until a methodology
for evaluating outcomes measures is available. In addition, research and demonstration projects are not
factored into the current per diem reimbursement structure. Therefore, hospices should be surveyed for
initiating QA/PI programs based on currently available tools until such time as the industry has been able to
develop hospice-specific systems of measures. Also, quality assessment should not rely solely on outcome
measures; limited structure and process measures are appropriate.
The proposed quality system will have a tendency to involve massive data collection unless purposely
controlled. Every effort must be made to keep data collection and the paperwork burden to a minimum so
that resources can be used for patient care rather than paperwork.
[TOP]
CLARIFY SEPARATE ENTITY
ISSUE: In recent years, home care/hospice organizations have become more complex, multi-functional
entities. The appearance of these complex organizations has made it increasingly difficult for surveyors to
determine what part of the organization is the certified HHA or hospice and subject to the Conditions of
Participation. Many of the instructions issued in the past are outdated and provide conflicting guidelines.
RECOMMENDATION: The bounds of an HHA/hospice that is part of a complex organization should be
established by determining that the HHA/hospice is either a "legally separate entity" or is "a functionally
separate entity." Functionally separate entities can be identified by application of the guidelines found in the
HCFA document "Investigation and Decision-Making in the Survey Process". Once the surveyor determines
whether the HHA/hospice is a legally or functionally separate entity, he or she should apply the survey
process as follows:
Legally Separate Entity- the Medicare-certified HHA/hospice is a separate legal entity (e.g., corporation or
partnership). When the HHA/hospice is legally separate from other parts of the organization, no further
questions should be posed about the organizational boundaries. The HHA/hospice administrator or designee
should direct the surveyor to those patients and records that receive HHA/hospice services. The survey
process is then applied to the legal entity which has been identified as the HHA/hospice to determine
compliance with the Conditions of Participation (CoP).
In an organization that has multiple legally separate entities, the Medicare surveyor has authority to apply the
CoP only to that legal entity that has applied for Medicare certification or recertification. If, during the
process of surveying a HHA/hospice, it becomes apparent that another separate legal entity in the
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organization has created the public perception that its services are from the Medicare certified HHA/hospice,
the surveyor should report the other entity to the appropriate authority which investigates fraudulent business
practices.
or
Functionally Separate Entity-the Medi-care-certified HHA/hospice is a separate functional subdivision of an
agency or organization. In order to determine if a HHA/hospice that is part of a complex agency or
organization that provides more than one program or multiple services meets "organizationally separate
entity" criteria, the agency representative must demonstrate that the HHA/hospice:
has verbal and written descriptions that indicate separate programs so that the public can distinguish
the Medicare home health/hospice program from other organizational entities, and
has admission and care management processes and procedures that are distinct from those of the other
entities of the organization.
Once the functionally separate entity is identified as the home health agency/hospice, the survey process may
be applied to determine compliance with the Medicare CoP.
If, during the course of the Medicare survey, it is determined that the HHA/hospice has failed to maintain
separateness of programs, admission and care management processes and procedures, other subdivisions of
the organization may be subject to survey.
RATIONALE: Federal law defines a HHA as a "public or private organization or a subdivision of such an
agency or organization" (42 USC S1395X). Hospice is defined as a "public agency or private organization or
subdivision of either of these that is primarily engaged in providing care to terminally ill individuals" (42
CFR $418.3). "Subdivi-sion" is defined in the State Operations Manual (§2182) as a "component of a
multi-function health agency. "There is no requirement that a _subdivision' be a separate legal entity from
other parts of an organization. In order to comply with federal law (42 USC S1395X) and the definition of
_subdivision' as in Section 2182 of the State Operations Manual, an organization simply must be able to
delineate the home health agency from other "components of a multi-function health agency." This
requirement is met when both HHAs and hospices have distinct admission and care management processes
and a program description which differentiates the HHA or hospice from other organizational programs.
[TOP]
CONTINUE TO ALLOW HHAs TO PROVIDE SERVICES UNDER ARRANGEMENTS
ISSUE: The Medicare Conditions of Participation (CoP) require that an HHA must provide at least one of
the qualifying services directly through agency employees, but may provide the second qualifying service
and additional services under arrangements with another agency or organization (42 CFR §484.14(a)). HCFA
interprets service "directly through agency employees" as meaning providing the services "by employees in
its entirety," which essentially inhibits contract arrangements even when needed for emergencies or staffing
shortages. Additionally, HCFA currently allows home health agencies to determine which one of the
"qualifying services" (nursing, PT, OT, ST, MSW, home health aide) they wish to provide directly by
employees.
HCFA has indicated that they plan to change this regulation to require that HHAs provide directly, by
employees, 50% of all professional services.
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RECOMMENDATION: HHAs should be permitted to provide services under arrangement with
individuals or other agencies or organizations. HCFA should enforce the regulations that are in the CoP
entitled "Organizations, Services, and Administration" to ensure that HHAs: 1) do not merely serve as a
billing agent for other parties; 2) exercise professional supervision and quality controls over the personnel
providing "under arrangement" services, and 3) assure coordination of all personnel providing services.
HCFA should consider adding language similar to that appearing in HIM-11, §200.2 (Arrangements by
Home Health Agencies), to the regulations in order to strengthen the requirements of HHAs to ensure quality
of services provided under arrangement: "In permitting HHAs to furnish services under arrangements, it is
not intended that the HHA merely serve as a billing mechanism for the other party. Accordingly for services
provided under arrangements to be covered the agency must exercise professional responsibility for the
arranged-for services."
RATIONALE: The current health care environment has resulted in an increase in managed care and
numerous organizational relationships. In order to remain competitive for managed care contracts, HHAs
often contract for services to control costs. Mergers, acquisitions, and joint ventures are taking place at a
rapid pace. It is unknown at this time what impact these health care industry changes will have on home care,
but flexibility in the provision of services will be critical to HHA survival.
Home care experience shows that subcontracting is necessary when: temporary staffing shortages exist;
community demands result in increased referrals; and patients require the skills of specialty nurses and
therapists.
HHAs should be permitted to continue to provide services "under arrangement" in order to control costs and
meet patient care needs. It is unnecessary to require services be provided through employees in order to
ensure quality. Existing quality and supervision regulations and guidelines, if enforced, can serve to ensure
quality of care to Medicare beneficiaries.
[TOP]
CONTINUE FLEXIBILITY IN REQUIRED COVERED SERVICES PROVIDED BY HHAS
ISSUE: Currently, agencies are required to offer skilled nursing and any one of the other covered services
(42 CFR $484.14(a)). It has been suggested that HCFA require all Medicare certified home health agencies
provide all covered services (SN plus home health aide, PT, OT, ST, and MSW) as one way to make the
home health benefit more responsive to beneficiary needs. The suggestion is seen as a means to ensure more
standardization of the Medicare home health benefit, eliminate patient confusion caused by multiple
providers, and ensure availability of all services for beneficiaries in need of home health care. This
suggestion is thought to be a way to eliminate billing duplication and other problems created when two
home health agencies must bill for home care services. However, such a requirement could create additional
problems.
RECOMMENDATION: Retain the current requirements that home health agencies provide skilled nursing
and at least one other covered service in order to be certified as a Medicare provider. Strengthen the
requirement that HHAs may accept only those patients for whom they can provide the services needed by
requiring providers to notify the patient and physician if services needed are not available and requiring
providers to assist patients with locating and arranging for needed services.
If it is necessary for two home health agencies to provide services in order to meet the patient's needs, both
agencies must meet the CoP. HCFA should strengthen regulations that require coordination between HHAs.
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HCFA should develop a code to be used by the agencies on the UB-92 to denote that more than one HHA is
providing and billing for services.
RATIONALE: Some patients and their physicians have a preference for services from certain HHAs. In
addition, some home health agencies are not able to provide all covered services due to difficulties securing
staff and appropriate supervisory personnel. These agencies will lose their Medicare certification if required
to deliver all services in order to be certified as Medicare providers. This is particularly applicable in hard to
serve rural and inner city areas. Thus, patients may be deprived of those Medicare services that the agencies
are able to provide. Agencies should be allowed to continue to decide what other services to offer, taking
into consideration such issues as community needs and availability of personnel.
The concerns identified can be adequately addressed by strengthening the requirements for acceptance of
patients and coordination of care. HHAs can meet their responsibility by informing beneficiaries of the scope
of services that are available from the HHA prior to initiation of care, coordinating services with other
agencies for additional services, or assisting patients to make arrangements with health care facilities that
offer the needed service.
[TOP]
INCREASE FLEXIBILITY IN THE APPLICATION OF THE CONDITIONS OF PARTICIPATION
ISSUE: HCFA requires the application of all of the Medicare Conditions of Participation (CoP) to all
patients served by the Medicare-certified agency regardless of payor source or services. Only one of the CoP,
the supervision of home health aides, has been written to provide flexibility in application based on intensity
of service needs. These requirements increase the cost of services to all payors.
RECOMMENDATION: Allow HHAs flexibility in application of the CoP to payors other than Medicare:
Apply plan of care (42 CFR §§484.18(a) and 484.18(b)), clinical record, and advance directive
($484.10(c)(2)(ii)) requirements only to medically unstable patients and patients in need of therapeutic
services (§484.48). These would apply to all patients where Medicare is a payor.
Apply medication monitoring (§484.18(c)) requirements only to those patients receiving nursing
services, regardless of the payor.
RATIONALE: Certain CoP in their full application are excessive for the delivery of some services by home
health agencies. If additional flexibility is built into the CoP, costs would be contained for delivery of
services to patients in certified agencies. Also, quality would be increased because agencies would be less
likely to establish unregulated separate entities to avoid the costs of compliance with unnecessary
requirements.
Advance directives should not be required in the same manner for medically stable persons. Some examples
are visits to new mothers receiving services as part of an early maternity hospital discharge program and
persons who do not require skilled services but who wish to secure the services of an HHA nurse to visit
monthly to check blood pressure, pulse and breath sounds.
Physicians should not have to review and sign the plan of care if a person needs long term care personal care
services only, and does not require skilled services. State professional practice acts do not require physician
orders for personal care services and recognize the licensed nurse as the person who should be responsible
for aide activities.
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If a physician orders only therapy, the home health agency should not be responsible for the patient's
medication monitoring. This should be the responsibility of the physician and pharmacist.
Clinical records for persons who are medically stable, but are receiving nursing services to maintain general
health compliance should not be required to contain a plan of care signed by a physician and summary
reports sent to a physician, as they are excessive and unnecessary.
[TOP]
ABOLISH PRESCRIPTIVE AND BURDENSOME PROCEDURAL REQUIREMENTS RELATED
TO ORAL ORDERS
ISSUE: The Medicare Home Health Conditions of Participation (CoP) at 42 CFR $484.18(c) and coverage
rules at 42 CFR 409.43(d) require that all oral orders must be signed and dated by the registered nurse or
therapist responsible for furnishing or supervising the ordered services. The Health Care Financing
Administration's (HCFA) contends that this will ensure that oral orders received by agency personnel other
than the professionals directly responsible for the patient's care will be reviewed by the responsible persons
prior to implementation. In addition, $409.43(d) states that "oral orders must also be countersigned and dated
by the physician before the HHA bills for the care."
HCFA's office of survey and certification and some Regional Home Health Intermediaries (RHHI) have
interpreted this regulation as meaning that the same piece of paper that is prepared by the person receiving
the oral orders must be reviewed and signed by the nurse or therapist and must be countersigned by the
physician. This requirement contradicts the instructions in $234.7 (item 23) of the Medicare Home Health
Agency Manual (HIM-11) for completing the 485 and can result in increased paperwork for providers and
physicians and needless delays in submission of Medicare claims.
RECOMMENDATION: HCFA should reevaluate their current interpretation of regulations related to oral
orders. Home health agencies should be permitted to establish their own procedures for confirming and
documenting oral orders. Documentation that indicates the nurse or therapist responsible for providing or
supervising the care has received the oral order should not be required on the form countersigned by the
physician.
Require signed orders prior to billing to include only orders needed to support billed services. Do not cite
agencies with deficiencies when they can demonstrate that they made a good faith effort to obtain the
paperwork from the physician to validate oral orders.
RATIONALE: There are numerous ways that oral orders can be safely and effectively received and
documented that would not require home health agencies to secure three signatures on the same piece of
paper.
Webster defines "countersignature" as "a signature attesting the authenticity of a document already signed by
another." The physician's "countersignature" is needed to confirm that the information, as documented and
signed by the person who received the oral order, is correct. The purpose of the nurse or therapist's signature
is to confirm that they have been informed of the oral orders. Since they did not receive the orders, they
cannot attest to their authenticity. Therefore, it is not necessary that the same form or paper be signed by
both the physician and the supervising/responsible nurse/therapist.
This rationale is further supported by HIM-11 §204.2E in which HCFA allows that: "the (oral) orders may be
signed by the supervising registered nurse or qualified therapist after the services have been rendered, as long
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as HHA personnel who receive the oral orders notify that nurse or therapist before the service is rendered."
HHAs cannot control the actions of physicians. Since HHAs cannot ensure that physicians will sign for the
oral orders that they have issued, penalties should be limited. Therefore, HHAs that have, in good faith,
accepted and carried out physicians' oral orders should only be required to demonstrate that they have taken
appropriate steps to obtain the physician's signature on oral orders. Since the intent of the law is to ensure
that services paid for by the Medicare program are ordered by a physician, denial of payment should not
occur when agencies have not obtained the physician's signature for minor changes in the plan of care, but
should occur only when the provider has not obtained signatures on those oral orders needed to support the
services billed.
[TOP]
REVISE ORGANIZATIONAL STRUCTURE REQUIREMENTS
ISSUE: HCFA recently revised organizational and functional requirements for home health agency (HHA)
alternate sites (branches, subunits, etc.) in a Program Memorandum dated April 3, 1996, to the Region
Offices (RO). The revised requirements have raised new questions and do not adequately address the current
health care environment with its complex organizational structures. Furthermore, this information was not
disseminated to home health agencies via manual updates.
There has been some RO correspondence indicating the use of arbitrary guidelines requiring that a certain
percentage of Medicare patients be served as a basis for determining intent to serve Medicare beneficiaries.
The site designation program memorandum issued by HCFA central and advisories issued by some of the
ROs to State Survey Agencies reference quality of care concerns about alternate sites as the basis for criteria
listed. However, the criteria differs from one region to another and is prescriptive and burdensome, with little
guarantee of ensuring quality. Many agencies that have operated alternate sites and delivered quality services
effectively and efficiently since the inception of the Medicare benefit do not meet the new criteria.
RECOMMENDATION: Establish a work group including representatives from the home care industry to
assess the current health care system as it relates to home health provider organizational structure. Establish
new organizational requirements and definitions for alternate sites that address Medicare program costs and
ensure flexible yet effective administration and supervision of services. Initiate investigation of payment
methodology that is fair and cost-efficient to the Medicare program. Denial of certification for failure to
serve Medicare beneficiaries should be based on proven discrimination rather than arbitrary percentage of
Medicare patients served.
RATIONALE: One of the goals of the HCFA Home Health Initiative was administrative simplification.
This will not be achieved merely by re-interpreting old regulations that do not address the current
environment. In this age of rapid contact via telephone, fax machines, and pagers, communication between
various service sites is instantaneous. Modern transportation and mail services in addition to
telecommunication promote effective sharing of administration, supervision, and services between sites.
Current site definitions and rules have not keep pace with changes in the health care environment.
HHAs that serve either large geographic rural areas or densely populated metropolitan areas operate branch
offices and subunits in order to provide a home base for personnel that is close to the patients that the agency
serves, where patient records will be accessible, where supplies are available, and where personnel can meet
to coordinate care with others who are serving the patient. This is a very efficient, cost-effective means of
providing high quality service while avoiding duplication of administrative positions and functions.
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Requiring a percentage of patients served to be Medicare beneficiaries is a flawed methodology since it does
not prove discrimination and may only be reflective or the agency's success in working with other payors.
The practice of locating offices at sites where HHAs will receive the most favorable reimbursement is clearly
a cost problem and should be resolved through changes in procedure related to cost limit methodology
[TOP]
MAKE PERSONNEL QUALIFICATIONS CONSISTENT AND REQUIRE CRIMINAL
BACKGROUND CHECKS
ISSUE: Current regulations specify in the personnel qualifications (42 CFR 484.4) that social workers and
occupational therapists and the assistants for each profession must have two years of related experience in
their profession in order to meet the requirements for home health agencies. There are no experience
requirements for nurses and in most cases physical therapists. Additionally, social workers are required to
have a master's degree in social work and one year of health care experience, while regulations for other
health provider settings, such as hospice, do not impose the same requirements. Many states have enacted
laws requiring criminal background checks for aides but not for professional personnel.
RECOMMENDATION: Reduce or delete experience requirements for medical social workers, social work
assistants, occupational therapists, and physical and occupational therapy assistants consistent with the nurse
requirements.
Include a personnel requirement that agencies must assess staff competencies and provide orientation and
training as needed.
Once an organized national system which is reasonable in cost and produces complete and timely
information has been developed, require criminal background checks for all home visiting staff through a
state registry or professional board prior to their first contact with patients.
RATIONALE: Because of the independent aspects of home visiting it is preferable to employ staff who
already have experience in their profession. However, a rigid requirement does not allow for differences in
education and work experiences. This requirement may contribute in part to the shortage of therapists and
social workers for home care services. It also does not allow the agency flexibility to develop less
experienced staff through HHA-sponsored orientation and preceptor programs.
The social services covered by Medicare include: assessment, referral to community resources, and
counseling to resolve social or emotional problems that may be an impediment to the effective treatment of
the patient's medical condition. These are responsibilities that are generally within the capabilities of
bachelor's degree prepared social workers.
This recommendation would, in effect, allow personnel who meet state practice requirements to provide
services in a Medicare certified home health agency.
[TOP]
FOCUS AIDE SUPERVISION ON INDIVIDUAL AIDES RATHER THAN EACH PATIENT
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RECOMMENDATION:
1. HCFA core requirements should be consistent for aides working in all settings. Aide training and
certification programs should address core content applicable to all aides as well as site of practice
specific requirements and certification. These requirements should apply to Medicare as well as all
Medicaid programs (e.g., PCA, waiver programs).
2. There should be three levels of certification with specific training and testing requirements for each
level as proposed by the Home Care Aide Association of America's position paper entitled "National
Uniformity for Paraprofessional Title, Qualifi-cations, and Supervision". The nurse aide and home
health aide should be required to meet the level III requirements described in this paper.
3. Both training and competency evaluation should be required. If training is required, certified aides
presently working in home care should be grandfathered.
4. Training programs should be approved by the state or by an approved accrediting organizations.
Educational institutions and community organizations as well as providers may be approved to offer
training and competency evaluation programs by these accrediting organizations.
5. One registry for aides practicing in all settings (home care, nursing homes and hospitals) should be
established to maintain an up-to-date list of aides who are in good standing.
6. An organized system for criminal checks should be developed which is reasonable in cost and will
provide up to date information in a timely manner.
RATIONALE: The basic job functions for home health aides and aides in other settings are the same with
the differences being in application to a particular setting. A consistent training and certification program
would prevent unnecessary duplication and allow easier mobility of home care/hospice workers. Aides
would only have to complete the site-specific requirements when changing settings. Home health
agencies/hospices would be able to accept with confidence a previous certification from an approved
program.
There are different levels of home care/hospice workers with some only performing homemaker functions, so
different levels of training and competency evaluation are indicated. Both training and testing should be
required since testing can never cover every aspect of training. Requiring both training and testing for all
aides will minimize the differences in quality of services and eliminate the financial inequity for those
agencies that provide both versus agencies that only test. Consistency in training programs will also better
prepare hospice home health aides to provide personal care services to nursing home residents enrolled in a
hospice program.
Home care aides and nursing home aides should be tracked through the same registry since workers may
move in and out of these settings. Criminal checks are needed but there currently is no systematic way to
accomplish them effectively and in a timely manner.
[TOP]
REQUIRE REGION OFFICE REVIEW OF CHALLENGES TO DEFICIENCIES
ISSUE: Home health agencies and hospices are subject to Conditions of Participation (CoP) and regular
surveys to participate in the Medicare program. Due to the complexity of Medicare regulations, interpretive
guidelines, and limited surveyor training, inconsistent and highly subjective interpretations of these
requirements continue. Also, HCFA has not published adequate criteria for differentiating condition level
from standard level deficiencies.
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The current HCFA instructions require that home health/hospice providers respond to a statement of
deficiencies within 10 days. Providers are instructed to indicate their disagreement with a citation on the
plan of correction form. If agencies submit both a corrective action and their disagreement, the disagreement
is often ignored since the corrective action is included. If they submit only their disagreement, the plan of
correction is considered unacceptable and the agency is at risk of termination. This essentially nullifies
providers' ability to refute a deficiency citation. Ordinarily, the provider is expected to achieve compliance
within 60 days of notice of the deficiency unless the seriousness warrants quicker corrective action.
RECOMMENDATION: HCFA should require that all challenges to a deficiency citation be reviewed by
the Region Office and a response given to the HHA/hospice within 30 days. For standard level deficiencies
and condition level deficiencies that pose no immediate threat to patients, the HHA/hospice would not have
to submit the corrective action initially. If the Region Office upholds the deficiency the HHA/hospice would
then be required to submit the corrective action and achieve compliance within 30 days. For deficiencies
considered to pose a threat to patient safety, the HHA/hospice would be required to submit and begin
corrective action in addition to their challenge to the citation. If the Region Office reversed the
determination, then the HHA/hospice could abandon the corrective action plan. The Region Office
determinations would need to be included in the file for public disclosure.
RATIONALE: Without an objective review of the providers' objections the agencies have no recourse but
to accept the determination of a surveyor even if that determination is wrong. This may involve costly or
time-consuming procedures that are not necessary.
[TOP]
PROMOTE EQUITABLE APPLICATION OF REGULATIONS IMPLEMENTING OBRA-87
SANCTIONS
ISSUE: The Omnibus Budget Reconcil-iation Act of 1987 (OBRA-87) authorized administrative and civil
money sanctions against agencies which are not in compliance with the Conditions of Participation. The
"intermediate sanctions" could be imposed in addition to or in lieu of termination from the Medicare
program. HCFA developed a range of sanctions, specific procedures and conditions for imposing sanctions
and the severity of each sanction as proposed rules published in the Federal Register notice of August 2,
1991. The proposed rules do not identify which conditions or standards of participation are more serious
than others. In addition, the guidelines are vague regarding temporary management and civil money
penalties.
Final regulations were expected in 1995, but have not yet been published. It is anticipated that, once
published, the type and severity of sanctions will have a significant impact on agencies' operations. It is
important that the sanctions and appeals process assure equitable application of the Omnibus Budget
Reconciliation Act of 1987 (OBRA-87, P.L. 100-203) provisions and protect agencies from unwarranted
penalties.
RECOMMENDATION: HCFA should include the following points in the regulations implementing
OBRA-87 Sanctions:
1. Only condition level deficiencies that impact quality of care should warrant sanctions;
2. Differentiate condition level deficiencies as those which pose a threat to patients from standard level
deficiencies.
3. Complaint surveys should be based on "significant" complaints which are those that affect patient
health, safety, and rights (42 CFR §§484.10, 484.18, 484.30, 484.32, 484.34, and 484.36);
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4. Personnel responsible for imposing sanctions should be trained and tested;
5. An objective structured system for imposing civil money penalties should be developed;
6. All surveys should conclude with an exit interview to allow the provider to clarify issues; and
7. The time frame should be amended to allow for more than five days between the last survey and
imposition of sanctions.
8. All recommendations for sanctions should be subject to region office review prior to imposition.
9. Further study should be undertaken to determine how to relate payment and sanctions to quality of
care.
RATIONALE: The imposition of administrative and financial sanctions against agencies raises many
concerns. The types of sanctions, levels of civil money penalties, and the correlation between the sanctions
and specific deficiencies will also be critical in assuring that the provisions are implemented appropriately
and equitably. Specific guidelines for surveyors are essential to ensure equitable imposition of sanctions.
Since existing quality assurance technology does not permit the measurement of refined gradations of
quality, further studies are needed before relating quality to payment.
[TOP]
INCREASE TRAINING FOR HOME HEALTH AND HOSPICE SURVEYORS
ISSUE: State surveyors for Medicare certified providers generally survey all types of providers, i.e., nursing
homes, home care agencies, hospices, and hospitals. Each of these providers is governed by a different set of
complex regulations. The Health Care Financing Administration (HCFA) does not conduct routine in-depth
surveyor training programs. Usually, state surveyors are trained by other state surveyors who may or may not
have attended HCFA surveyor training. Recently, Operation Restore Trust (ORT) activities have placed
surveyors in the position of reviewing records for coverage compliance and determining what documentation
should be submitted to intermediaries for which they have received little training.
RECOMMENDATION: HCFA should follow-through on its stated plan to provide surveyor training on
the Medicare Home Health and Hospice regulations. Training programs should:
Be required for all surveyors.
Be based on an established curriculum with specific learning goals.
Include information on Medicare coverage of services information.
Ensure consistent interpretation and application of the regulations.
Surveyors should have a healthcare background and their pay should be commensurate with area standards.
In addition, state agencies should be required to show evidence of surveyor training for all new surveyors
and provide ongoing continuing education to all surveyors.
HCFA should develop a formal procedure for sharing information between the FIs and state survey agencies
(SA). SAs should report suspected coverage problems to the FIs and the FIs should report suspected quality
problems to the SAs. SAs and FIs must be cross trained on basic coverage and regulatory principles,
reporting procedures, and determining the bounds of their individual authority. Training should be ongoing
in order that the level of knowledge stays current.
RATIONALE: Surveyors for the Medicare Home Health & Hospice Benefit should have full knowledge of
the provisions and requirements of the benefit to avoid inappropriate requirements of hospice and home
health providers and ensure the highest quality of care for patients. A healthcare background is essential for
proper assessment of quality care. Underpaying surveyors limits a state's ability to recruit quality personnel.
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[TOP]
MODIFY HOSPICE REGULATIONS FOR INPATIENT RESPITE CARE
ISSUE: The Health Care Financing Administration's (HCFA) regulations under the Medicare Hospice
Benefit (MHB) requirements for both inpatient acute care and inpatient respite care are that a registered
nurse (RN) be available 24-hours a day. This stipulation is understandable for inpatient acute care (e.g.,
hospitals) because of inherent and implied patient need. However, institutional respite care is provided as a
means of relieving the family caregiver, not because a patient's condition requires skilled care in an
institution. The 24-hour hospice requirement constitutes a higher standard than that required of routine
skilled nursing facility (SNF) [42 CFR $483.28] or nursing facility (NF) care, which allows some SNFs and
NFs to seek a waiver from the 24-hour RN requirement and allows an RN for the eight-hour day shift only,
with licensed nurses for the balance of the shifts.
Hospices generally contract with SNFs and NFs for in-patient respite care. However, with the
implementation of the new SNF/NF regulation under OBRA-87 which allows application for a waiver of the
24-hour RN staffing requirement for some SNFs/NFs, hospices that continue to contract with a facility that
has such a waiver will automatically be out of compliance with the Medicare Hospice Benefit regulations.
RECOMMENDATION: Change the requirement in the MHB for nursing care under the inpatient respite
care provision to mirror the less stringent requirements for skilled nursing facilities and nursing facilities in
the Omnibus Budget Reconciliation Act of 1987 (OBRA-87). The 24-hour RN staffing requirement should
be removed from the hospice Conditions of Participation for NF and SNF in-patient respite care.
RATIONALE: Under the current regulations, the only in-patient respite option hospices often have is to
place the patient in a hospital which results in unnecessary utilization of a hospital bed and increased costs.
Hospice caregivers require respite; hospice patients receiving the respite level of care do not necessarily
require skilled care in an institution.
[TOP]
SURVEY FREQUENCY FOR MEDICARE HOSPICE PROVIDERS SHOULD BE BASED ON
PERFORMANCE
ISSUE: Only 10% of Medicare hospice providers are surveyed each year. There is no legislative requirement
for the frequency of surveys for providers of the Medicare Hospice Benefit (MHB). HCFA's failure to require
survey hospice providers be surveyed on a regular basis can result in lack of compliance with regulations and
poor quality of care.
RECOMMENDATION: Limited resources available for hospice surveys should be used to target quality
issues by adopting the following survey frequency guidelines:
New Medicare hospice agencies should be surveyed annually for at least the first two years of
certification.
Agencies with condition level deficiencies should be surveyed at least annually until they are
deficiency free.
Complaint surveys should be conducted following significant complaints. If deficiencies are found,
annual surveys should be conducted until deficiency free.
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All hospices should be surveyed, at a minimum, every three years.
RATIONALE: When the MHB was created by the Congress, in order to assure quality of care and
implement the benefit, HCFA was given the responsibility of creating regulations to be followed by
providers of hospice services. As the next step of this responsibility, there needs to be regular surveys to
ensure compliance with these regulations. Recipients of the MHB should be afforded the same protections
provided to recipients of other Medicare benefits.
[TOP]
Legislation and Regulations I Regulatory Blueprint Table of Contents
Return to the HomeCare On-Line Center!
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CFR Part 409-Hospital Insurance Benefit
42 CFR Part 409-Subpart E-Home Health
Services Under Hospital Insurance
409.40 Basis, purpose, and scope.
(c) In need of skilled services. The beneficiary must
This subpart implements sections 1814(a)(2)(C),
need at least one of the following skilled services
1835(a)(2)(A), and 1861(m) of the Act with respect to the
as certified by a physician in accordance with the
requirements that must be met for Medicare payment to
physician certification and recertification require-
be made for home health services furnished to eligible ben-
ments for home health services under 424.22 of
eficiaries.
this chapter.
159 FR 65493, Dec. 20, 1994]
(1) Intermittent skilled nursing services that meet
the criteria for skilled services and the need
409.41 Requirement for payment.
for skilled services found in 409.32. (Also
In order for home health services to qualify for payment
see 409.33(a) and (b) for a description of
under the Medicare program the following requirements
examples of skilled nursing and rehabilita-
must be met:
tion services.)
(a) The services must be furnished to an eligible ben-
(2) Physical therapy services that meet the
eficiary by, or under arrangements with, an HHA
requirements of 409.44(c).
that-
(3) Speech-language pathology services that meet
(1) Meets the conditions of participation for
the requirements of 409.44(c).
HHAs at part 484 of this chapter; and
(4) Continuing occupational therapy services that
(2) Has in effect a Medicare provider agreement
meet the requirements of 409.44(c) if the ben-
as described in part 489, subparts A, B, C, D,
eficiary's eligibility for home health services
and E of this chapter.
has been established by virtue of a prior need
(b) The physician certification and recertification
for intermittent skilled nursing care, speech-lan-
requirements for home health services described
guage pathology services, or physical therapy
in 424.22.
in the current or prior certification period.
(c) All requirements contained in 409.42 through
(d) Under a plan of care. The beneficiary must be
409.47.
under a plan of care that meets the requirements
159 FR 65494, Dec. 20, 1994]
for plans of care specified in 409.43.
(e) By whom the services must be furnished. The
409.42 Beneficiary qualifications for coverage of
home health services must be furnished by, or
services.
under arrangements made by, a participating
To qualify for Medicare coverage of home health services,
HHA.
a beneficiary must meet each of the following require-
159 FR 65494, Dec. 20, 1994; 60 FR 39122, Aug. 1, 1995/
ments:
(a) Confined to the home. The beneficiary must be
409.43 Plan of care requirements.
confined to the home or in an institution that is
(a) Contents. The plan of care must contain those
not a hospital, SNF or nursing facility as defined
items listed in 484.18(a) of this chapter that spec-
in section 1861(e)(1), 1819(a)(1) or 1919(a)(1) of
ify the standards relating to a plan of care that an
the Act, respectively.
HHA must meet in order to participate in the
(b) Under the care of a physician. The beneficiary
Medicare program.
must be under the care of a physician who estab-
(b) Physician's orders. The physician's orders for ser-
lishes the plan of care. A doctor of podiatric med-
vices in the plan of care must specify the medical
icine may establish a plan of care only if that is
treatments to be furnished as well as the type of
consistent with the functions he or she is autho-
home health discipline that will furnish the ordered
rized to perform under State law.
services and at what frequency the services will
CHCE Resource Manual II-131
be furnished. Orders for services to be provided
409.44 Skilled services requirements.
"as needed" or "PRN" must be accompanied by
(a) General. The intermediary's decision on whether
a description of the beneficiary's medical signs
care is reasonable and necessary is based on
and symptoms that would occasion the visit and
information provided on the forms and in the
a specific limit on the number of those visits to be
medical record concerning the unique medical
made under the order before an additional physi-
condition of the individual beneficiary. A cover-
cian order would have to be obtained. Orders for
age denial is not made solely on the basis of the
care may indicate a specific range in frequency of
reviewer's general inferences about patients with
visits to ensure that the most appropriate level of
similar diagnoses or on data related to utilization
services is furnished. If a range of visits is ordered,
generally but is based upon objective clinical evi-
the upper limit of the range is considered the spe-
dence regarding the beneficiary's individual need
cific frequency.
for care.
(c) Physician signature. The plan of care must be
(b) Skilled nursing care.
signed and dated by a physician who meets the
(1) Skilled nursing care consists of those services
certification and recertification requirements of
that must, under State law, be performed by
424.22 of this chapter. The plan of care must be
a registered nurse, or practical (vocational)
signed by the physician before the bill for services
nurse, as defined in 484.4 of this chapter, and
is submitted. Any changes in the plan must be
meet the criteria for skilled nursing services
signed and dated by the physician.
specified in 409.32. See 409.33(a) and (b) for
(d) Oral (verbal) orders. If any services are provid-
a description of skilled nursing services and
ed based on a physician's oral orders, the orders
examples of them.
must be put in writing and be signed and dated
(i) In determining whether a service requires
with the date of receipt by the registered nurse
the skill of a licensed nurse, considera-
or qualified therapist (as defined in 484.4 of
tion must be given to the inherent com-
this chapter) responsible for furnishing or super-
plexity of the service, the condition of
vising the ordered services. Oral orders may
the beneficiary, and accepted standards
only be accepted by personnel authorized to
of medical and nursing practice.
do so by applicable State and Federal laws and
(ii) If the nature of a service is such that it
regulations as well as by the HHA's internal poli-
can safely and effectively be performed
cies. The oral orders must also be countersigned
by the average nonmedical person with-
and dated by the physician before the HHA bills
out direct supervision of a licensed nurse,
for the care.
the service cannot be regarded as a
(e) Frequency of review. The plan of care must be
skilled nursing service.
reviewed by the physician (as specified in
(iii) The fact that a skilled nursing service can
409.42(b)) in consultation with agency profes-
be or is taught to the beneficiary or to the
sional personnel at least every 62 days. Each
beneficiary's family or friends does not
review of a beneficiary's plan of care must con-
negate the skilled aspect of the service
tain the signature of the physician who reviewed
when performed by the nurse.
it and the date of review.
(iv) If the service could be performed by
(f) Termination of the plan of care. The plan of care
the average nonmedical person, the
is considered to be terminated if the beneficiary
absence of a competent person to per-
does not receive at least one covered skilled nurs-
form it does not cause it to be a skilled
ing, physical therapy, speech-language patholo-
nursing service.
gy services, or occupational therapy visit in a 62-
(2) The skilled nursing care must be provided on
day period unless the physician documents that
a part-time or intermittent basis.
the interval without such care is appropriate to
(3) The skilled nursing services must be reason-
the treatment of the beneficiary's illness or injury.
able and necessary for the treatment of the
159 FR 65494, Dec. 20, 1994]
illness or injury.
#132 National Association for Home Care
(i) To be considered reasonable and nec-
(ii) The services must be of such a level of
essary, the services must be consistent
complexity and sophistication or the con-
with the nature and severity of the ben-
dition of the beneficiary must be such
eficiary's illness or injury, his or her par-
that the services required can safely and
ticular medical needs, and accepted stan-
effectively be performed only by a qual-
dards of medical and nursing practice.
ified physical therapist or by a qualified
(ii) The skilled nursing care provided to the
physical therapy assistant under the
beneficiary must be reasonable within
supervision of a qualified physical ther-
the context of the beneficiary's condition.
apist, by a qualified speech-language
(iii) The determination of whether skilled
pathologist, or by a qualified occupa-
nursing care is reasonable and necessary
tional therapist or a qualified occupa-
must be based solely upon the benefi-
tional therapy assistant under the super-
ciary's unique condition and individual
vision of a qualified occupational thera-
needs, without regard to whether the ill-
pist (as defined in 484.4 of this chap-
ness or injury is acute, chronic, terminal,
ter). Services that do not require the per-
or expected to last a long time.
formance or supervision of a physical
(c) Physical therapy, speech-language pathology ser-
therapist or an occupational therapist are
vices, and occupational therapy. To be covered,
not considered reasonable or necessary
physical therapy, speech-language pathology ser-
physical therapy or occupational thera-
vices, and occupational therapy must satisfy the
py services, even if they are performed
criteria in paragraphs (c)(1) through (4) of this
by or supervised by a physical therapist
section. Occupational therapy services initially
or occupational therapist. Services that
qualify for home health coverage only if they are
do not require the skills of a speech-lan-
part of a plan of care that also includes intermit-
guage pathologist are not considered to
tent skilled nursing care, physical therapy, or
be reasonable and necessary speech-lan-
speech-language pathology services as follows:
guage pathology services even if they
(1) Speech-language pathology services and
are performed by or supervised by a
physical or occupational therapy services
speech-language pathologist.
must relate directly and specifically to a treat-
(iii) There must be an expectation that the
ment regimen (established by the physician,
beneficiary's condition will improve
after any needed consultation with the qual-
materially in a reasonable (and general-
ified therapist) that is designed to treat the
ly predictable) period of time based on
beneficiary's illness or injury. Services relat-
the physician's assessment of the bene-
ed to activities for the general physical wel-
ficiary's restoration potential and unique
fare of beneficiaries (for example, exercis-
medical condition, or the services must
es to promote overall fitness) do not con-
be necessary to establish a safe and effec-
stitute physical therapy, occupational ther-
tive maintenance program required in
apy, or speech-language pathology services
connection with a specific disease, or the
for Medicare purposes.
skills of a therapist must be necessary to
(2) Physical and occupational therapy and
perform a safe and effective maintenance
speech-language pathology services must be
program. If the services are for the estab-
reasonable and necessary. To be considered
lishment of a maintenance program, they
reasonable and necessary, the following con-
may include the design of the program,
ditions must be met:
the instruction of the beneficiary, family,
(i) The services must be considered under
or home health aides, and the necessary
accepted standards of medical practice to
infrequent reevaluations of the benefi-
be a specific, safe, and effective treat-
ciary and the program to the degree that
ment for the beneficiary's condition.
the specialized knowledge and judgment
CHCE Resource Manual II.133
of a physical therapist, speech-language
and oral hygiene that are needed to facil-
pathologist, or occupational therapist is
itate treatment or to prevent deteriora-
required.
tion of the beneficiary's health, changing
(iv) The amount, frequency, and duration of
the bed linens of an incontinent benefi-
the services must be reasonable.
ciary, shaving, deodorant application,
159 FR 65496, Dec. 20, 1994]
skin care with lotions and/or powder,
foot care, ear care, feeding, assistance
409.45 Dependent services requirements.
with elimination (including enemas
(a) General. Services discussed in paragraphs (b)
unless the skills of a licensed nurse are
through (g) of this section may be covered only
required due to the beneficiary's condi-
if the beneficiary needs skilled nursing care on
tion, routine catheter care, and routine
an intermittent basis, as described in 409.44(b);
colostomy care), assistance with ambu-
physical therapy or speech-language pathology
lation, changing position in bed, and
services as described in 409.44(c); or has a con-
assistance with transfers.
tinuing need for occupational therapy services
(ii) Simple dressing changes that do not
as described in 409.44(c) if the beneficiary's eli-
require the skills of a licensed nurse.
gibility for home health services has been estab-
(iii) Assistance with medications that are ordi-
lished by virtue of a prior need for intermittent
narily self-administered and that do not
skilled nursing care, speech-language pathology
require the skills of a licensed nurse to
services, or physical therapy in the current or
be provided safely and effectively.
prior certification period; and otherwise meets
(iv) Assistance with activities that are direct-
the qualifying criteria (confined to the home,
ly supportive of skilled therapy services
under the care of a physician, in need of skilled
but do not require the skills of a thera-
services, and under a plan of care) specified in
pist to be safely and effectively per-
409.42. Home health coverage is not available
formed, such as routine maintenance
for services furnished to a beneficiary who is no
exercises and repetitive practice of func-
longer in need of one of the qualifying skilled ser-
tional communication skills to support
vices specified in this paragraph. Therefore,
speech-language pathology services.
dependent services furnished after the final qual-
(v) Routine care of prosthetic and orthotic
ifying skilled service are not covered, except
devices.
when the dependent service was not followed by
(2) The services to be provided by the home
a qualifying skilled service as a result of the unex-
health aide must be-
pected inpatient admission or death of the ben-
(i) Ordered by a physician in the plan of
eficiary, or due to some other unanticipated event.
care; and
(b) Home health aide services. To be covered, home
(ii) Provided by the home health aide on a
health aide services must meet each of the fol-
part-time or intermittent basis.
lowing requirements:
(3) The services provided by the home health
(1) The reason for the visits by the home health
aide must be reasonable and necessary. To
aide must be to provide hands-on personal
be considered reasonable and necessary, the
care to the beneficiary or services that are
services must-
needed to maintain the beneficiary's health or
(i) Meet the requirement for home health
to facilitate treatment of the beneficiary's illness
aide services in paragraph (b)(1) of this
or injury. The physician's order must indicate
section;
the frequency of the home health aide ser-
(ii) Be of a type the beneficiary cannot per-
vices required by the beneficiary. These ser-
form for himself or herself; and
vices may include but are not limited to:
(iii) Be of a type that there is no able or
(i) Personal care services such as bathing,
willing caregiver to provide, or, if there
dressing, grooming, caring for hair, nail
is a potential caregiver, the beneficiary
II-134 National Association for Home Care
is unwilling to use the services of that
(e) Durable medical equipment. Durable medical
individual.
equipment in accordance with 410.38 of this
(4) The home health aide also may perform ser-
chapter, which describes the scope and condi-
vices incidental to a visit that was for the pro-
tions of payment for durable medical equipment
vision of care as described in paragraphs
under Part B, may be covered under the home
(b)(3)(i) through (iii) of this section. For exam-
health benefit as either a Part A or Part B service.
ple, these incidental services may include
Durable medical equipment furnished by an HHA
changing bed linens, personal laundry, or
as a home health service is always covered by Part
preparing a light meal.
A if the beneficiary is entitled to Part A.
(c) Medical social services. Medical social services
(f) Medical supplies. Medical supplies (including
may be covered if the following requirements
catheters, catheter supplies, ostomy bags, and
are met:
supplies relating to ostomy care but excluding
(1) The services are ordered by a physician and
drugs and biologicals) may be covered as a home
included in the plan of care.
health benefit. For medical supplies to be covered
(2) (i) The services are necessary to resolve
as a Medicare home health benefit, the medical
social or emotional problems that are
supplies must be needed to treat the beneficia-
expected to be an impediment to the
ry's illness or injury that occasioned the home
effective treatment of the beneficiary's
health care.
medical condition or to his or her rate of
(g) Intern and resident services. The medical services
recovery.
of interns and residents in training under an
(ii) If these services are furnished to a bene-
approved hospital teaching program are covered
ficiary's family member or caregiver, they
if the services are ordered by the physician who
are furnished on a short-term basis and
is responsible for the plan of care and the HHA
it can be demonstrated that the service
is affiliated with or under the common control of
is necessary to resolve a clear and direct
the hospital furnishing the medical services.
impediment to the effective treatment of
Approved means-
the beneficiary's medical condition or to
(1) Approved by the Accreditation Council for
his or her rate of recovery.
Graduate Medical Education;
(3) The frequency and nature of the medical
(2) In the case of an osteopathic hospital,
social services are reasonable and necessary
approved by the Committee on Hospitals of
to the treatment of the beneficiary's condition.
the Bureau of Professional Education of the
(4) The medical social services are furnished by
American Osteopathic Association;
a qualified social worker or qualified social
(3) In the case of an intern or resident-in-train-
work assistant under the supervision of a
ing in the field of dentistry, approved by the
social worker as defined in 484.4 of this
Council on Dental Education of the American
chapter.
Dental Association; or
(5) The services needed to resolve the problems
(4) In the case of an intern or resident-in-train-
that are impeding the beneficiary's recovery
ing in the field of podiatry, approved by the
require the skills of a social worker or a social
Council on Podiatric Medical Education of
work assistant under the supervision of a
the American Podiatric Medical Association.
social worker to be performed safely and
159 FR 65495, Dec. 20, 1994; 60 FR 39122, 39123, Aug. 1, 1995/
effectively.
(d) Occupational therapy. Occupational therapy
409.46 Allowable administrative costs.
services that are not qualifying services under
Services that are allowable as administrative costs but
409.44(c) are nevertheless covered as dependent
are not separately billable include, but are not limited
services if the requirements of 409.44(c)(2)(i)
to, the following:
through (iv), as to reasonableness and necessity,
(a) Registered nurse initial evaluation visits. Initial eval-
are met.
uation visits by a registered nurse for the purpose
CHCE Resource Manual 11.135
of assessing a beneficiary's health needs, deter-
(a) Beneficiary's home. A beneficiary's home is any
mining if the agency can meet those health needs,
place in which a beneficiary resides that is not a
and formulating a plan of care for the beneficiary
hospital, SNF, or nursing facility as defined in sec-
are allowable administrative costs. If a physician
tions 1861(e)(1), 1819(a)(1), of 1919(a)(1) of the
specifically orders that a particular skilled service
Act, respectively.
be furnished during the evaluation in which the
(b) Outpatient setting. For purposes of coverage of
agency accepts the beneficiary for treatment and
home health services, an outpatient setting may
all other coverage criteria are met, the visit is bill-
include a hospital, SNF or a rehabilitation center
able as a skilled nursing visit. Otherwise it is con-
with which the HHA has an arrangement in accor-
sidered to be an administrative cost.
dance with the requirements of 484.14(h) of this
(b) Visits by registered nurses or qualified profes-
chapter and that is used by the HHA to provide
sionals for the supervision of home health aides.
services that either-
Visits by registered nurses or qualified profes-
(1) Require equipment that cannot be made avail-
sionals for the purpose of supervising home
able at the beneficiary's home; or
health aides as required at 484.36(d) of this chap-
(2) Are furnished while the beneficiary is at the facil-
ter are allowable administrative costs. Only if the
ity to receive services requiring equipment
registered nurse or qualified professional visits
described in paragraph (b)(1) of this section.
the beneficiary for the purpose of furnishing care
159 FR 65496, Dec. 20, 1994]
that meets the coverage criteria at 409.44, and
409.48 Visits.
the supervisory visit occurs simultaneously with
(a) Number of allowable visits under Part A. To the
the provision of covered care, is the visit billable
extent that all coverage requirements specified
as a skilled nursing or therapist's visit.
in this subpart are met, payment may be made
(c) Respiratory care services. If a respiratory thera-
on behalf of eligible beneficiaries under Part A
pist is used to furnish overall training or consul-
for an unlimited number of covered home health
tative advice to an HHA's staff and incidentally
visits. All Medicare home health services are cov-
provides respiratory therapy services to benefi-
ered under hospital insurance unless there is no
ciaries in their homes, the costs of the respirato-
Part A entitlement.
ry therapist's services are allowable as adminis-
(b) Number of visits under Part B. To the extent that
trative costs. Visits by a respiratory therapist to a
all coverage requirements specified in this sub-
beneficiary's home are not separately billable.
part are met, payment may be made on behalf
However, respiratory therapy services that are fur-
of eligible beneficiaries under Part B for an unlim-
nished as part of a plan of care by a skilled nurse
ited number of covered home health visits.
or physical therapist and that constitute skilled
Medicare home health services are covered under
care may be separately billed as skilled visits.
Part B only when the beneficiary is not entitled
(d) Dietary and nutrition personnel. If dieticians or
to coverage under Part A.
nutritionists are used to provide overall training
(c) Definition of visit. A visit is an episode of person-
or consultative advice to HHA staff and inciden-
al contact with the beneficiary by staff of the HHA
tally provide dietetic or nutritional services to
or others under arrangements with the HHA, for
beneficiaries in their homes, the costs of these pro-
the purpose of providing a covered service.
fessional services are allowable as administrative
(1) Generally, one visit may be covered each
costs. Visits by a dietician or nutritionist to a ben-
time an HHA employee or someone pro-
eficiary's home are not separately billable.
viding home health services under arrange-
159 FR 65496, Dec. 20, 1994]
ments enters the beneficiary's home and pro-
vides a covered service to a beneficiary who
409.47 Place of service requirements.
meets the criteria of 409.42 (confined to the
To be covered, home health services must be furnished
in either the beneficiary's home or an outpatient setting
home, under the care of a physician, in need
as defined in this section.
of skilled services, and under a plan of care).
II-136 National Association for Home Care
(2) If the HHA furnishes services in an outpa-
costs, but no separate payment is made for them.
tient facility under arrangements with the
(c) Services that would not be covered as inpatient ser-
facility, one visit may be covered for each
vices. Services that would not be covered if fur-
type of service provided.
nished as inpatient hospital services are excluded
(3) If two individuals are needed to provide a
from home health coverage.
service, two visits may be covered. If two
(d) Housekeeping services. Services whose sole pur-
individuals are present, but only one is need-
pose is to enable the beneficiary to continue resid-
ed to provide the care, only one visit may
ing in his or her home (for example, cooking,
be covered.
shopping, Meals on Wheels, cleaning, laundry) are
(4) A visit is initiated with the delivery of covered
excluded from home health coverage.
home health services and ends at the con-
(e) Services covered under the End Stage Renal
clusion of delivery of covered home health
Disease (ESRD) program. Services that are cov-
services. In those circumstances in which all
ered under the ESRD program and are contained
reasonable and necessary home health ser-
in the composite rate reimbursement methodol-
vices cannot be provided in the course of a
ogy, including any service furnished to a Medicare
single visit, HHA staff or others providing ser-
ESRD beneficiary that is directly related to that
vices under arrangements with the HHA may
individual's dialysis, are excluded from coverage
remain at the beneficiary's residence between
under the Medicare home health benefit.
visits (for example, to provide non-covered
(f) Prosthetic devices. Items that meet the require-
services). However, if all covered services
ments of 410.36(a)(2) of this chapter for pros-
could be provided in the course of one visit,
thetic devices covered under Part B are exclud-
only one visit may be covered.
ed from home health coverage. Catheters,
159 FR 65497, Dec. 20, 1994]
catheter supplies, ostomy bags, and supplies
relating to ostomy care are not considered pros-
409.49 Excluded services.
thetic devices if furnished under a home health
(a) Drugs and biologicals. Drugs and biologicals are
plan of care and are not subject to this exclusion
excluded from payment under the Medicare home
from coverage.
health benefit.
(g) Medical social services provided to family mem-
(1) A drug is any chemical compound that may
be used on or administered to humans or
bers. Except as provided in 409.45(c)(2), med-
animals as an aid in the diagnosis, treat-
ical social services provided solely to members
ment or prevention of disease or other con-
of the beneficiary's family and that are not inci-
dition or for the relief of pain or suffering
dental to covered medical social services being
or to control or improve any physiological
provided to the beneficiary are not covered.
pathologic condition.
159 FR 65497, Dec. 20, 1994; 60 FR 39123, Aug. 1, 1995]
(2) A biological is any medicinal preparation
made from living organisms and their prod-
409.50 Coinsurance for durable medical equip-
ucts including, but not limited to, serums,
ment (DME) furnished as a home health service.
vaccines, antigens, and antitoxins.
The coinsurance liability of the beneficiary or other per-
(b) Transportation. The transportation of beneficiaries,
son for DME furnished as a home health service is 20 per-
whether to receive covered care or for other pur-
cent of the customary (insofar as reasonable) charge for
poses, is excluded from home health coverage.
the services.
Costs of transportation of equipment, materials, sup-
[51 FR 41339, Nov. 14, 1986. Redesignated at 59 FR 65496, Dec. 20,
plies, or staff may be allowable as administrative
1994]
CHCE Resource Manual II.137
CFR Part 413-Principles of Reasonable
Cost Reimbursement
42 CFR Part 413-Subpart B-Accounting Records and Reports
413.1 [Amended] Introduction.
(F) Section 1834(g) of the Act provides
[Amended by: 62 FR 26 - 01/02/97 - MEDICARE
for payment for rural primary care
PROGRAM; ELECTRONIC COST REPORTING FOR
hospital (RPCH) outpatient services
SKILLED NURSING FACILITIES AND HOME
on the basis of prospectively deter-
HEALTH AGENCIES]
mined amounts.
(a) Basis, scope, and applicability.
(G) Section 1881 of the Act authorizes
(1) Statutory basis.
payment for services furnished to
(i) Basic provisions.
ESRD patients.
(A) Section 1815 of the Act requires that
(H) Section 1883 of the Act provides for
the Secretary make interim payments
payment for post-hospital SNF care
to providers and periodically deter-
furnished by a rural hospital that has
mine the amount that should be paid
swing-bed approval.
under Part A of Medicare to each
(I) Sections 1886(a) and (b) of the Act
provider for the services it furnishes.
impose a ceiling on the rate of
(B) Section 1814(b) of the Act (for Part
increase in hospital inpatient costs.
A) and section 1833(a) (for Part B)
(J) Section 1886(h) of the Act provides
provide for payment on the basis of
for payment to a hospital for the ser-
the lesser of a provider's reasonable
vices of interns and residents in
costs or customary charges.
approved teaching programs on the
(C) Section 1861(v) of the Act defines
basis of a "per resident" amount.
"reasonable cost."
(2) Scope. This part sets forth regulations gov-
(ii) Additional provisions.
erning Medicare payment for services fur-
(A) Section 1138(b) of the Act specifies
nished to beneficiaries by-
the conditions for Medicare payment
(i) Hospitals and rural primary care hos-
for organ procurement costs.
pitals (RPCHs);
(B) Section 1814(j) of the Act provides
(ii) Skilled nursing facilities (SNFs);
for exceptions to the "lower of costs
(iii) Home health agencies (HHAs);
or charges" provisions.
(iv) Comprehensive outpatient rehabilitation
(C) Section 1833(a)(4) and (i)(3) of the
facilities (CORFs);
Act provide for payment of a blend-
(v) End-stage renal disease (ESRD) facilities;
ed amount for certain surgical ser-
(vi) Providers of outpatient physical thera-
vices furnished in a hospital's out-
py and speech pathology services
patient department.
(OPTs); and
(D) Section 1833(n) of the Act provides
(vii) Organ procurement agencies (OPAs) and
for payment of a blended amount
histocompatibility laboratories.
for outpatient hospital diagnostic
(viii) Community mental health centers
procedures such as radiology.
(CMHCs) but only for purposes of fur-
(E) Section 1834(c)(1)(C) of the Act
nishing partial hospitalization services.
establishes the method for deter-
(3) Applicability. The payment principles and
mining Medicare payment for
related policies set forth in this part are bind-
screening mammograms performed
ing on HCFA and its fiscal intermediaries, on
by hospitals.
the Provider Reimbursement Review Board,
II-138 National Association for Home Care
and on the entities listed in paragraph (a)(2)
(ii) Payment to children's, psychiatric, reha-
of this section.
bilitation and long-term hospitals (as
(b) Reasonable cost reimbursement. Except as pro-
well as separate psychiatric and reha-
vided under paragraphs (c) through (f) of this
bilitation units (distinct parts) of short-
section, Medicare is generally required, under
term general hospitals), which are
section 1814(b) of the Act (for services covered
excluded from the prospective payment
under Part A) and under section 1833(a)(2) of
system under subpart B of part 412 of
the Act (for services covered under Part B) to pay
this chapter, and to hospitals outside the
for services furnished by providers on the basis
50 States and the District of Columbia is
of reasonable costs as defined in section 1861(v)
on a reasonable cost basis, subject to
of the Act, or the provider's customary charges for
the provisions of 413.40.
those services, if lower. Regulations implement-
(iii) Payment to hospitals subject to a State
ing section 1861(v) are found generally in this
reimbursement control system is described
part beginning at 413.5.
in paragraph (e) of this section.
(c) Outpatient maintenance dialysis and related
(e) State reimbursement control systems. Beginning
services. Section 1881 of the Act authorizes spe-
October 1, 1983, Medicare reimbursement for
cial rules for the coverage of and payment for
inpatient hospital services may be made in
services furnished to ESRD patients. Sections
accordance with a State reimbursement con-
413.170 and 413.174 implement various provi-
trol system rather than under the Medicare reim-
sions of section 1881. In particular, 413.170
bursement principles set forth in this part, if
establishes a prospective payment method for
the State system is approved by HCFA.
outpatient maintenance dialysis services that
Regulations implementing this alternative reim-
applies both to hospital-based and indepen-
bursement authority are set forth in subpart C
dent ESRD facilities, and under which Medicare
of part 403 of this chapter.
pays for both home and infacility dialysis ser-
(f) Services of qualified nonphysician anesthetists.
vices furnished on or after August 1, 1983.
For cost reporting periods, or any part of a cost
(d) Payment for inpatient hospital services.
reporting period, beginning on or after January
(1) For cost reporting periods beginning before
1, 1989, costs incurred for the services of quali-
October 1, 1983, the amount paid for inpa-
fied nonphysician anesthetists are not paid on a
tient hospital services is determined on a rea-
reasonable cost basis unless the provisions of
sonable cost basis.
412.113(c)(2) of this chapter apply. These ser-
(2) Payment to short-term general hospitals
vices are paid under the special rules set forth in
located in the 50 States and the District of
405.553 of this chapter.
Columbia for the operating costs of hospi-
(g) Prospectively determined payment rates for low
tal inpatient services for cost reporting peri-
Medicare volume SNFs. Rules governing requests
ods beginning on or after October 1, 1983,
by SNFs for prospectively determined payment
and for the capital-related costs of inpa-
rates under section 1888(d) of the Act are set forth
tient services for cost reporting periods
in subpart I of this part.
beginning on or after October 1, 1991, are
[51 FR 34793, Sept. 30, 1986, as amended at 57 FR 33898, July 31,
determined prospectively on a per dis-
1992; 57 FR 39829, Sept. 1, 1992; 58 FR 30670, May 26, 1993; 59
charge basis under part 412 of this chapter
FR 6578, Feb. 11, 1994; 60 FR 33136, June 27, 1995; 60 FR 37594,
except as follows:
July 21, 1995; 60 FR 50441, Sept. 29, 1995]
(i) Payment for capital-related costs for cost
reporting periods beginning before
413.5 [Amended] [Revised] Cost reimbursement:
October 1, 1991, medical education costs,
General.
kidney acquisition costs, and the costs
[Amended by: 60 FR 63123 12/08/95 - MEDICARE
of certain anesthesia services, is described
PROGRAM; PHYSICIAN FEE SCHEDULE FOR
in 412.113 of this chapter.
CALENDAR YEAR 1996; PAYMENT POLICIES AND
CHCE Resource Manual 11.139
RELATIVE VALUE UNIT ADJUSTMENTS; FINAL RULE
the beneficiaries of this program and that is
AND NOTICE]
fair to each provider individually.
[Revised by: 61 FR 63740 - 12/02/96 - MEDICARE
(4) That there be sufficient flexibility in the meth-
PROGRAM; CHANGES CONCERNING SUSPENSION
ods of reimbursement to be used, particu-
OF MEDICARE PAYMENTS, AND DETERMINATIONS
larly at the beginning of the program, to take
OF ALLOWABLE INTEREST EXPENSES]
account of the great differences in the pre-
(a) In formulating methods for making fair and equi-
sent state of development of recordkeeping.
table reimbursement for services rendered ben-
(5) That the principles should result in the equi-
eficiaries of the program, payment is to be made
table treatment of both nonprofit organiza-
on the basis of current costs of the individual
tions and profit-making organizations.
provider, rather than costs of a past period or a
(6) That there should be a recognition of the
fixed negotiated rate. All necessary and proper
need of hospitals and other providers to keep
expenses of an institution in the production of ser-
pace with growing needs and to make
vices, including normal standby costs, are rec-
improvements.
ognized. Furthermore, the share of the total insti-
(c) As formulated herein, the principles given recog-
tutional cost that is borne by the program is relat-
nition to such factors as depreciation, interest,
ed to the care furnished beneficiaries so that no
bad debts, educational costs, compensation of
part of their cost would need to be borne by
owners, and an allowance for a reasonable return
other patients. Conversely, costs attributable to
on equity capital (in the case of certain propri-
other patients of the institution are not to be borne
etary providers). With respect to allowable costs
by the program. Thus, the application of this
some items of inclusion and exclusion are:
approach, with appropriate accounting support,
(1) An appropriate part of the net cost of approved
will result in meeting actual costs of services to
educational activities will be included.
beneficiaries as such costs vary from institution
(2) Costs incurred for research purposes, over
to institution. However, payments to providers
and above usual patient care, will not be
of services for services furnished Medicare ben-
included.
eficiaries are subject to the provisions of 413.13
(3) Grants, gifts, and income from endowments
and 413.30.
will not be deducted from operating costs
(b) Putting these several points together, certain tests
unless they are designated by the donor for
have been evolved for the principles of reim-
the payment of specific operating costs.
bursement and certain goals have been estab-
(4) The value of services provided by nonpaid
lished that they should be designed to accomplish.
workers, as members of an organization
In general terms, these are the tests or objectives:
(including services of members of religious
(1) That the methods of reimbursement should
orders) having an agreement with the
result in current payment so that institutions
provider to furnish such services, is includable
will not be disadvantaged, as they sometimes
in the amount that would be paid others for
are under other arrangements, by having to
similar work.
put up money for the purchase of goods and
(5) Discounts and allowances received on the
services well before they receive reimburse-
purchase of goods or services are reductions
ment.
of the cost to which they relate.
(2) That, in addition to current payment, there
(6) Bad debts growing out of the failure of a
should be retroactive adjustment so that increas-
beneficiary to pay the deductible, or the coin-
es in costs are taken fully into account as they
surance, will be reimbursed (after bona fide
actually occurred, not just prospectively.
efforts at collection).
(3) That there be a division of the allowable costs
(7) Charity and courtesy allowances are not includ-
between the beneficiaries of this program
able, although "fringe benefit" allowances for
and the other patients of the provider that
employees under a formal plan will be includ-
takes account of the actual use of services by
able as part of their compensation.
II.140 National Association for Home Care
(8) A reasonable allowance of compensation
[51 FR 34793, Sept. 30, 1986; 51 FR 37398, Oct. 22, 1986, as amend-
for the services of owners in profitmaking
ed at 52 FR 21225, June 4, 1987; 52 FR 23398, June 19, 1987; 57
organizations will be allowed providing
FR 39829, Sept. 1, 1992]
their services are actually performed in a
necessary function.
413.9 Cost related to patient care.
(9) Reasonable cost of physicians' direct med-
Principle. All payments to providers of services must be
ical and surgical services (including supervi-
based on the reasonable cost of services covered under
sion of interns and residents in the care of
Medicare and related to the care of beneficiaries.
individual patients) furnished in a teaching
Reasonable cost includes all necessary and proper costs
hospital may be reimbursed as a provider
incurred in furnishing the services, subject to principles
cost (as described in 405.465 of this chapter)
relating to specific items of revenue and cost. However,
where elected as provided for in 405.521 of
for cost reporting periods beginning after December 31,
this chapter.
1973, payments to providers of services are based on the
(d) In developing these principles of reimbursement
lesser of the reasonable cost of services covered under
for the Medicare program, all of the considerations
Medicare and furnished to program beneficiaries or the
inherent in allowances for depreciation were stud-
customary charges to the general public for such services,
ied. The principles, as presented, provide options
as provided for in 413.13.
to meet varied situations. Depreciation will essen-
Definitions-(1) Reasonable cost. Reasonable cost of any
tially be on an historical cost basis but since many
services must be determined in accordance with regula-
institutions do not have adequate records of old
tions establishing the method or methods to be used, and
the items to be included. The regulations in this part take
assets, the principles provide an optional
into account both direct and indirect costs of providers of
allowance in lieu of such depreciation for assets
services. The objective is that under the methods of deter-
acquired before 1966. For assets acquired after
mining costs, the costs with respect to individuals covered
1965, the historical cost basis must be used. All
by the program will not be borne by individuals not so
assets actually in use for production of services
covered, and the costs with respect to individuals not so
for Medicare beneficiaries will be recognized even
covered will not be borne by the program. These regu-
though they may have been fully or partially
lations also provide for the making of suitable retroactive
depreciated for other purposes. Assets financed
adjustments after the provider has submitted fiscal and
with public funds may be depreciated. Although
statistical reports. The retroactive adjustment will represent
funding of depreciation is not required, there is
the difference between the amount received by the
an incentive for it since income from funded
provider during the year for covered services from both
depreciation is not considered as an offset which
Medicare and the beneficiaries and the amount deter-
must be taken to reduce the interest expense that
mined in accordance with an accepted method of cost
is allowable as a program cost.
apportionment to be the actual cost of services furnished
(e) A return on the equity capital of proprietary facil-
to beneficiaries during the year. Necessary and proper
ities, as described in 413.157, is an allowance in
costs. Necessary and proper costs are costs that are appro-
addition to the reasonable cost of covered services
priate and helpful in developing and maintaining the oper-
furnished to beneficiaries.
ation of patient care facilities and activities. They are usu-
(f) Renal dialysis items and services furnished under
ally costs that are common and accepted occurrences in
the ESRD provision are reimbursed and report-
the field of the provider's activity.
ed under 413.170 and 413.174 respectively. For
(c) Application.
special rules concerning health maintenance orga-
(1) It is the intent of Medicare that payments to
nizations (HMOs), and providers of services and
providers of services should be fair to the
other health care facilities that are owned or oper-
providers, to the contributors to the Medicare
ated by an HMO, or related to an HMO by com-
trust funds, and to other patients.
mon ownership or control, see 417.242(b)(14)
(2) The costs of providers' services vary from
and 417.250(c) of this chapter.
one provider to another and the variations
CHCE Resource Manual #141
generally reflect differences in scope of ser-
(f) of this section, the reasonable cost of covered
vices and intensity of care. The provision in
services furnished to beneficiaries. New provider
Medicare for payment of reasonable cost of
means a provider that has operated as the type of
services is intended to meet the actual costs,
facility for which it has been approved for partic-
however widely they may vary from one
ipation in the Medicare program (for example, as
institution to another. This is subject to a lim-
a SNF or an HHA) under present and previous
itation if a particular institution's costs are
ownership for less than three full years. Provider
found to be substantially out of line with
with a significant portion of low-income patients
other institutions in the same area that are
means a nonpublic provider whose charges are 60
similar in size, scope of services, utilization,
percent or less of the reasonable cost represented
and other relevant factors.
by the charges, and that demonstrates, as required
(3) The determination of reasonable cost of ser-
under paragraph (c)(1)(iii) of this section, that its
vices must be based on cost related to the
charges are less than costs because its customary
care of Medicare beneficiaries. Reasonable
practice is to charge patients based on their abili-
cost includes all necessary and proper expens-
ty to pay. Public provider means a provider oper-
es incurred in furnishing services, such as
ated by a Federal, State, county, city, or other local
administrative costs, maintenance costs, and
government agency or instrumentality.
premium payments for employee health and
(b) Application of the principle of lesser of costs or
pension plans. It includes both direct and indi-
charges.
rect costs and normal standby costs. However,
(1) General rule. Except as provided in paragraph
if the provider's operating costs include
(c) of this section, effective with cost report-
amounts not related to patient care, specifically
ing periods beginning on or after January 1,
not reimbursable under the program, or flow-
1974, hospitals, SNFs, HHAs, OPTs, and
ing from the provision of luxury items or ser-
CMHCs but only for purposes of providing
vices (that is, those items or services substan-
partial hospitalization services, are paid the
tially in excess of or more expensive than
lesser of the reasonable cost (as described in
those generally considered necessary for the
paragaraph (d) of this section) of covered ser-
provision of needed health services), such
vices furnished to beneficiaries or the cus-
amounts will not be allowable. The reasonable
tomary charges (as defined in paragraph (e)
cost basis of reimbursement contemplates that
of this section) made by the provider for the
the providers of services would be reimbursed
same services. The carryover of unreimbursed
the actual costs of providing quality care how-
reasonable costs from previous cost reporting
ever widely the actual costs may vary from
periods is recognized, in accordance with the
provider to provider and from time to time
provisions of paragraph (h) of this section.
for the same provider.
(2) Example. A provider's reasonable cost for
[51 FR 34795, Sept. 30, 1986; 51 FR 37398, Oct. 22, 1986]
covered services furnished to Medicare ben-
eficiaries during a cost reporting period is
413.13 [Amended] Amount of payment if cus-
$125,000. The customary charges to those
tomary charges for services furnished are less
beneficiaries for these services is $110,000.
than reasonable costs.
The provider is to be reimbursed $110,000
[Amended by: 60 FR 63123 - 12/08/95 - MEDICARE
less deductible and coinsurance amounts that
PROGRAM; PHYSICIAN FEE SCHEDULE FOR CAL-
the beneficiaries are charged.
ENDAR YEAR 1996; PAYMENT POLICIES AND
(c) Providers and services not subject to the principle.
RELATIVE VALUE UNIT ADJUSTMENTS; FINAL
(1) Providers.
RULE AND NOTICE]
(i) CORFs. Payment to CORFs is based on
(a) Definitions. As used in this section-Fair com-
the reasonable cost of the services.
pensation means, for the purpose of providers that
(ii) Public providers. Public providers fur-
meet the nominal charge provisions in paragraph
nishing services free of charge or at a
II*142 National Association for Home Care
nominal charge (as specified in para-
for durable medical equipment fur-
graph (f) of this section) are paid fair
nished by an HHA as a home health
compensation for services furnished to
service on or after July 18, 1984, the
beneficiaries.
HHA is paid the lesser of the rea-
(iii) Providers furnishing services to a signifi-
sonable cost of the equipment or the
cant portion of low-income patients.
customary charges (less a 20 percent
Effective with cost reporting periods
coinsurance as provided in section
beginning on or after October 1, 1984, a
1866(a)(2)(A)(ii) of the Act), not to
provider furnishing services at a nominal
exceed 80 percent of the reasonable
charge (as specified in paragraph (f) of
cost of the equipment. The lesser of
this section) is paid fair compensation,
cost or charges determination for
upon request, for services furnished to
durable medical equipment is made
beneficiaries if the provider can demon-
separately from all other items or ser-
strate to its intermediary that a significant
vices furnished in an HHA regardless
portion of its patients are low income and
of whether the equipment is fur-
that its charges are less than costs because
nished under Part A or Part B.
its customary practice is to charge patients
(B) HHAs meeting the nominal charge
based on their ability to pay.
provisions. A public HHA, or an
(2) Services—
HHA that demonstrates that a sig-
(i) Part A inpatient hospital services. The
nificant portion of its patients are
lesser of costs or charges principle does
low-income patients under the nom-
not apply to Part A inpatient hospital ser-
inal charge provisions, as provided
vices subject to-
in paragraph (f)(2) of this section,
(A) The rate-of-increase limits under
are paid 80 percent of fair compen-
413.40, effective with cost reporting
sation for durable medical equip-
periods beginning on or after
ment furnished as a home health ser-
October 1, 1982; or
vice on or after July 18, 1984.
(B) The prospective payment system
(iv) Rural Primary Care Hospital (RPCH) ser-
under Part 412 of this chapter, effec-
vices. The lesser of costs or charges prin-
tive with cost reporting periods begin-
ciple does not apply in determining pay-
ning on or after October 1, 1983.
ment for inpatient services furnished by
(ii) Special rule for facility services related to
a RPCH under 413.70(a) or outpatient
ambulatory surgical procedures per-
RPCH services that are paid under the
formed in outpatient hospital depart-
all-inclusive rate method described in
ments. Effective for hospitals with cost
413.70(b)(3).
reporting periods beginning on or after
(3) Hospital outpatient radiology services. The
October 1, 1987, reasonable costs and
reasonable costs and customary charges for
customary charges for those services relat-
hospital outpatient radiology services fur-
ing to ambulatory surgical procedures
nished on or after October 1, 1988, that are
that are subject to the payment method-
subject to the payment method described in
ology described in 413.118 are aggregat-
413.122, are aggregated and treated sepa-
ed and treated separately from all other
rately from all other hospital costs and charges
hospital costs and charges incurred dur-
incurred during the cost reporting period.
ing the cost reporting period.
(4) Other diagnostic procedures performed by a
(iii) Durable medical equipment furnished
hospital on an outpatient basis. The reason-
by HHAs—
able costs and customary charges for other
(A) General. Except as provided in para-
diagnostic procedures identified by HCFA,
graph (c)(2)(iii)(B) of this section,
that are performed on an outpatient basis by
CHCE Resource Manual II-143
a hospital on or after October 1, 1989, and
equipment furnished by HHAs as provided
that are subject to the payment method
in paragraph (c)(2)(iii) of this section, if a
described in 413.122, are aggregated and
public provider's total charges, for cost report-
treated separately from all other hospital costs
ing periods beginning before October 1, 1984,
or charges incurred during the cost reporting
are less than onehalf of the reasonable cost
period.
of services or items represented by these
(d) Exclusions from reasonable cost. For purposes
charges, then the provider is reimbursed fair
of comparison with customary charges under this
compensation.
section, reasonable cost does not include-
(2) Cost reporting periods beginning on or after
(1) Payments made to a provider as reimburse-
October 1, 1984. For cost reporting periods
ment for bad debts arising from noncollec-
beginning on or after October 1, 1984, the fol-
tion of Medicare deductible and coinsurance
lowing provisions apply in determining nom-
amounts (413.80);
inal charges:
(2) Amounts that represent the recovery of excess
(i) Reimbursement of fair compensation.
depreciation resulting from termination in
Except for the limitations on reimburse-
the Medicare program or a decrease in
ment for durable medical equipment fur-
Medicare utilization (413.134(d)(3)) applic-
nished by HHAs as provided in para-
able to prior cost reporting periods;
graph (c)(2)(iii) of this section, public
(3) Amounts that result from a disposition of
providers, and providers with a signifi-
depreciable assets (413.134(f)), applicable to
cant portion of low-income patients that
prior cost reporting periods;
request payment under this paragraph
(4) Payments to funds for the donated services
are reimbursed fair compensation if total
of teaching physicians (413.85); and
charges are 60 percent or less of the rea-
(5) Graduate medical education costs for cost
sonable cost of services or items repre-
reporting periods beginning on or after July
sented by these charges.
1, 1985.
(ii) Separate determination of nominal
(e) Customary charges:
charges. Except as provided in paragraph
(1) General. As used in this paragraph (e), cus-
(f)(2)(iii) of this section, the determina-
tomary charges means the charges for ser-
tion of nominal charges, which is based
vices, as defined in 413.53(b), furnished to
on charges actually billed to charge-pay-
beneficiaries. These charges must be
ing, non-Medicare patients, is made sep-
recorded on all bills submitted for program
arately with respect to inpatient and out-
reimbursement.
patient services (other than clinical diag-
(2) Special situations in which customary charges
nostic laboratory tests that are paid under
are reduced. Customary charges are reduced
section 1833(h) of the Act).
in proportion to the ratio of the aggregate
(iii) Determination of nominal charges in spe-
amount actually collected from chargepaying
cial situations.
non-Medicare patients to the amount that
(A) For providers that have a sliding
would have been realized had customary
scale or discounted schedule of
charges been paid and the provider-
charges based on patients' ability to
(i) Did not actually impose charges in the
pay, the determination of nominal
case of most patients liable for payment
charges is based on charges billed
for its services on a charge basis; or
to all charge-paying patients. This
(ii) Failed to make a reasonable effort to col-
determination is made using the
lect those charges.
ratio of sliding scale or discounted
(f) Nominal charges:
charges to the provider's full cus-
(1) Cost reporting periods beginning before
tomary charges. For determining
October 1, 1984. Except for durable medical
nominal charges, the ratio is applied
II*144 National Association for Home Care
to the provider's Medicare charges
not be used. For covered items and services
to equate those charges to cus-
furnished during these periods, total reason-
tomary charges.
able cost of covered items and services is
(B) For HHAs, the determination of
compared with total customary charges for
nominal charges for all items and
those items and services, separately for Part
services other than durable medical
A and for Part B.
equipment is made on an aggregate
(h) Accumulation of unreimbursed costs and carry-
basis. The nominal charge determi-
over to subsequent periods:
nation for durable medical equip-
(1) General rule. A provider whose charges are
ment is made separately from other
lower than its reasonable cost for those ser-
items or services furnished by HHAs.
vices in any cost reporting period beginning
(C) For cost reporting periods beginning
on or after January 1, 1974 but before April
on or after July 1, 1985, graduate
28, 1988, may carry forward costs that are
medical education payments (or a
unreimbursed under paragraph (b) of this
provider's graduate medical educa-
section for the two succeeding cost reporting
tion reasonable costs if supported by
periods. However, no recovery may be made
appropriate data) are included in rea-
in any period in which costs are unreim-
sonable costs when making the
bursed because a provider's costs exceed the
nominal charge determination.
limitations on reimbursable costs (413.30)
(g) The aggregation method:
or the ceiling on the rate of hospital cost
(1) Cost reporting periods beginning before
increases ( 413.40).
October 1, 1984 - Application. In comparing
(2) Reimbursement as a result of carryover.
costs and charges under the lesser of costs or
The provider is reimbursed for the costs
charges principle for cost reporting periods
that are carried forward to a succeeding
beginning before October 1, 1984, the rea-
cost reporting period-
sonable cost for items and services and the
(i) If total charges for services provided in
customary charges for those same items and
that subsequent period exceed the total
services are to be aggregated (that is, totalled
reasonable cost of the services; and
and compared) without regard to whether
(ii) To the extent that accumulation of the
the services are reimbursable under Part A or
costs being carried forward and the costs
Part B of Medicare. This aggregation method
for the services provided in that subse-
is to be applied after the provider's charges
quent period do not exceed the cus-
and costs have been adjusted to exclude the
tomary charges for those services.
amounts described in paragraph (d) of this
(3) Two succeeding periods less than 24 months.
section and to exclude-
If the two succeeding cost reporting periods
(i) Any amounts attributable to physician
are less than 24 full calendar months, the
services not reimbursable to the
provider may carry forward the unreimbursed
provider on a reasonable cost basis as
costs for one additional cost reporting period.
described in 405.480 through 405.482
(4) Example. In the cost reporting period end-
of this chapter; and
ing September 30, 1982, a provider's rea-
(ii) All costs and charges for noncovered
sonable costs were $100,000. The provider's
provider services.
customary charges for those services were
(2) Cost reporting periods beginning on or after
$90,000. The provider is reimbursed $90,000
October 1, 1984. Effective with cost report-
less any deductible and coinsurance
ing periods beginning on or after October 1,
amounts but is permitted to carry forward
1984, the aggregation method used for com-
the unreimbursed reasonable costs of
puting the lesser of costs or charges, as set
$10,000 for the next two succeeding cost
forth in paragraph (g)(1) of this section, may
reporting periods. If, in the cost reporting
CHCE Resource Manual 11.145
period ending September 30, 1983, cus-
(iii) Five succeeding periods less than 60
tomary charges to beneficiaries exceeded
months. If the five succeeding cost
the reasonable costs for those services by
reporting periods are less than 60 full
$10,000 or more, and the provider had no
calendar months, the provider may carry
costs unreimbursed under 413.30 or 413.40,
forward the unreimbursed costs for one
the provider would recover the entire
additional cost reporting period.
$10,000 previously not reimbursed. If, how-
(iv) Example. A provider begins its opera-
ever, beneficiary charges for that cost report-
tions on March 5, 1972. However, it
ing period exceeded costs by only $8,000,
begins to participate in the Medicare
this amount ($8,000) would be added to the
program as of January 1, 1973, and
provider's reimbursable costs for this peri-
reports on a calendar year basis. Because
od. The balance of the unreimbursed
the provider would be subject to the
amount ($2,000) would be carried forward
lesser of cost or charges principle for its
to the next cost reporting period.
cost reporting period beginning with
(5) New providers.
January 1, 1974, it would be permitted
(i) General rule. A new provider whose
to accumulate any unreimbursed costs
cost reporting period begins before
(excess of costs over its charges)
April 28, 1988, may carry forward costs
incurred during this reporting period.
that are unreimbursed from previous
Therefore, because this cost reporting
periods, as described in paragraph (b)
period ends before the end of the third
of this section, during a provider's base
year of operation, its carryover period
period. The base period includes any
would be the succeeding five cost
cost reporting period beginning on or
reporting periods ending with December
after January 1, 1974, and ending on
31, 1979. If this provider had begun its
or before the last day of its third year
operation on July 1, 1973, and become
of operation. The unreimbursed costs
a participating provider as of the same
may be carried forward for the five
date (with a fiscal year ending June 30),
succeeding cost reporting periods.
it would have been able to accumulate
However, no recovery may be made in
any unreimbursed costs for the two cost
any period in which costs are unre-
reporting periods ending June 30, 1975,
imbursed because a provider's costs
and June 30, 1976. Its carryover period
exceed the limitations on reimbursable
would then be the five cost reporting
costs (413.30) or the ceiling on the rate
periods ending no later than June 30,
of hospital cost increases (413.40).
1981, in the case of costs unreimbursed
(ii) Reimbursement as a result of carryover.
in either of the reporting periods ending
The new provider is reimbursed for the
June 30, 1975, or June 30, 1976.
costs that are carried forward to a suc-
153 FR 10085, Mar. 29, 1988; 53 FR 12641, Apr. 15, 1988; 54 FR
ceeding cost reporting period-
40315, Sept. 29, 1989; 56 FR 8842, Mar. 1, 1991; 58 FR 30670,
(A) If total charges for the services pro-
May 26, 1993; 59 FR 6578, Feb. 11, 1994]
vided in that subsequent period
exceed the total reasonable cost of
413.17 Cost to related organizations.
the services; and
(a) Principle. Except as provided in paragraph (d)
(B) To the extent that accumulation of
of this section, costs applicable to services,
the costs being carried forward and
facilities, and supplies furnished to the provider
the costs for the services provided in
by organizations related to the provider by
that subsequent period do not
common ownership or control are includable
exceed the customary charges for
in the allowable cost of the provider at the cost
those services.
to the related organization. However, such cost
National Association for Home Care
must not exceed the price of comparable ser-
reimbursable cost should include the costs
vices, facilities, or supplies that could be pur-
for these items at the cost to the supplying
chased elsewhere.
organization. However, if the price in the
(b) Definitions.
open market for comparable services, facili-
(1) Related to the provider. Related to the
ties, or supplies is lower than the cost to the
provider means that the provider to a sig-
supplier, the allowable cost to the provider
nificant extent is associated or affiliated
may not exceed the market price.
with or has control of or is controlled by
(d) Exception.
the organization furnishing the services,
(1) An exception is provided to this general prin-
facilities, or supplies.
ciple if the provider demonstrates by con-
(2) Common ownership. Common ownership
vincing evidence to the satisfaction of the fis-
exists if an individual or individuals possess
cal intermediary (or, if the provider has not
significant ownership or equity in the
nominated a fiscal intermediary, HCFA) that-
provider and the institution or organization
(i) The supplying organization is a bona fide
serving the provider.
separate organization;
(3) Control. Control exists if an individual or an
(ii) A substantial part of its business activity
organization has the power, directly or indi-
of the type carried on with the provider
rectly, significantly to influence or direct
is transacted with others than the provider
the actions or policies of an organization or
and organizations related to the suppli-
institution.
er by common ownership or control and
(c) Application.
there is an open, competitive market for
(1) Individuals and organizations associate with
the type of services, facilities, or supplies
others for various reasons and by various
furnished by the organization;
means. Some deem it appropriate to do so
to assure a steady flow of supplies or ser-
(iii) The services, facilities, or supplies are
vices, to reduce competition, to gain a tax
those that commonly are obtained by
advantage, to extend influence, and for other
institutions such as the provider from
reasons. These goals may be accomplished
other organizations and are not a basic
by means of ownership or control, by finan-
element of patient care ordinarily fur-
cial assistance, by management assistance,
nished directly to patients by such insti-
and other ways.
tutions; and
(2) If the provider obtains items of services, facil-
(iv) The charge to the provider is in line with
ities, or supplies from an organization, even
the charge for such services, facilities, or
though it is a separate legal entity, and the
supplies in the open market and no more
organization is owned or controlled by the
than the charge made under comparable
owner(s) of the provider, in effect the items
circumstances to others by the organiza-
are obtained from itself. An example would
tion for such services, facilities, or supplies.
be a corporation building a hospital or a nurs-
(2) In such cases, the charge by the supplier to
ing home and then leasing it to another cor-
the provider for such services, facilities, or
poration controlled by the owner. Therefore,
supplies is allowable as cost.
CHCE Resource Manual II*147
42 CFR Part 413-Subpart D-Apportionment
413.20 [Amended] Financial data and reports.
(2) No financial arrangements exist that will
[Amended by: 61 FR 63740 12/02/96 - MEDICARE
thwart the commitment of the Medicare
PROGRAM; CHANGES CONCERNING SUSPENSION
program to reimburse providers the rea-
OF MEDICARE PAYMENTS, AND DETERMINATIONS
sonable cost of services furnished benefi-
OF ALLOWABLE INTEREST EXPENSES]
ciaries. The data and information to be
(a) General. The principles of cost reimbursement
examined include cost, revenue, statisti-
require that providers maintain sufficient finan-
cal, and other information pertinent to
cial records and statistical data for proper deter-
reimbursement including, but not limited
mination of costs payable under the program.
to, that described in paragraph (d) of this
Standardized definitions, accounting, statistics,
section and in 413.24.
and reporting practices that are widely accepted
(d) Continuing provider recordkeeping requirements.
in the hospital and related fields are followed.
(1) The provider must furnish such information
Changes in these practices and systems will not
to the intermediary as may be necessary to-
be required in order to determine costs payable
(i) Assure proper payment by the program,
under the principles of reimbursement. Essentially
including the extent to which there is
the methods of determining costs payable under
any common ownership or control (as
Medicare involve making use of data available
described in 413.17(b)(2) and (3))
from the institution's basis accounts, as usually
between providers or other organiza-
maintained, to arrive at equitable and proper pay-
tions, and as may be needed to identify
ment for services to beneficiaries.
the parties responsible for submitting
(b) Frequency of cost reports. Cost reports are
program cost reports;
required from providers on an annual basis with
(ii) Receive program payments; and
reporting periods based on the provider's
(iii) Satisfy program overpayment determi-
accounting year. In the interpretation and appli-
nations.
cation of the principles of reimbursement, the fis-
(2) The provider must permit the intermediary
cal intermediaries will be an important source of
to examine such records and documents as
consultative assistance to providers and will be
are necessary to ascertain information perti-
available to deal with questions and problems
nent to the determination of the proper
on a day-to-day basis.
amount of program payments due. These
(c) Recordkeeping requirements for new providers. A
records include, but are not limited to, mat-
newly participating provider of services (as defined
ters pertaining to-
in 400.202 of this chapter) must make available to
(i) Provider ownership, organization, and
its selected intermediary for examination its fiscal
operation;
and other records for the purpose of determining
(ii) Fiscal, medical, and other recordkeeping
such provider's ongoing recordkeeping capabili-
systems;
ty and inform the intermediary of the date its ini-
(iii) Federal income tax status;
tial Medicare cost reporting period ends. This exam-
(iv) Asset acquisition, lease, sale, or other
ination is intended to assure that-
action;
(1) The provider has an adequate ongoing sys-
(v) Franchise or management arrangements;
tem for furnishing the records needed to pro-
(vi) Patient service charge schedules;
vide accurate cost data and other information
(vii) Costs of operation;
capable of verification by qualified auditors
(viii) Amounts of income received by source
and adequate for cost reporting purposes
and purpose; and
under section 1815 of the Act; and
(ix) Flow of funds and working capital.
II.148 National Association for Home Care
(3) The provider, upon request, must furnish the
of the various types of services furnished. It
intermediary copies of patient service charge
is the determination of these costs by the allo-
schedules and changes thereto as they are
cation of direct costs and proration of indi-
put into effect. The intermediary will evalu-
rect costs.
ate such charge schedules to determine the
(2) Accrual basis of accounting. As used in this part,
extent to which they may be used for deter-
the term accrual basis of accounting means that
mining program payment.
revenue is reported in the period in which it is
(e) Suspension of program payments to a provider.
earned, regardless of when it is collected; and
If an intermediary determines that a provider does
an expense is reported in the period in which
not maintain or no longer maintains adequate
it is incurred, regardless of when it is paid. (See
records for the determination of reasonable cost
413.100 regarding limitations on allowable
under the Medicare program, payments to such
accrued costs in situations in which the related
provider will be suspended until the intermedi-
liabilities are not liquidated timely.)
ary is assured that adequate records are main-
(c) Adequacy of cost information. Adequate cost
tained. Before suspending payments to a provider,
information must be obtained from the provider's
the intermediary will, in accordance with the pro-
records to support payments made for services
visions in 405.371(a) of this chapter, send written
furnished to beneficiaries. The requirement of
notice to such provider of its intent to suspend
adequacy of data implies that the data be accu-
payments. The notice will explain the basis for the
rate and in sufficient detail to accomplish the pur-
intermediary's determination with respect to the
poses for which it is intended. Adequate data
provider's records and will identify the provider's
capable of being audited is consistent with good
recordkeeping deficiencies. The provider must
business concepts and effective and efficient man-
be given the opportunity, in accordance with
agement of any organization, whether it is oper-
405.371(a) of this chapter, to submit a statement
ated for profit or on a nonprofit basis. It is a rea-
(including any pertinent evidence) as to why the
sonable expectation on the part of any agency
suspension must not be put into effect.
paying for services on a costreimbursement basis.
In order to provide the required cost data and
413.24 [Amended] Adequate cost data and cost
not impair comparability, financial and statistical
finding.
records should be maintained in a manner con-
[Amended by: 62 FR 26 - 01/02/97 - MEDICARE
sistent from one period to another. However, a
PROGRAM; ELECTRONIC COST REPORTING FOR
proper regard for consistency need not preclude
SKILLED NURSING FACILITIES AND HOME
a desirable change in accounting procedures if
HEALTH AGENCIES]
there is reason to effect such change.
(a) Principle. Providers receiving payment on the basis
(d) Cost finding methods. After the close of the
of reimbursable cost must provide adequate cost
accounting period, providers must use one of the
data. This must be based on their financial and sta-
following methods of cost finding to determine the
tistical records which must be capable of verifi-
actual costs of services furnished during that peri-
cation by qualified auditors. The cost data must be
od. (These provisions do not apply to SNFs that
based on an approved method of cost finding and
elect and qualify for prospectively determined
on the accrual basis of accounting. However, if
payment rates under subpart I of this part for cost
governmental institutions operate on a cash basis
reporting periods beginning on or after October
of accounting, cost data based on such basis of
1, 1986. For the special rules that are applicable
accounting will be acceptable, subject to appro-
to those SNFs, see 413.321.) For cost reporting
priate treatment of capital expenditures.
periods beginning after December 31, 1971,
(b) Definitions.
providers using the departmental method of cost
(1) Cost finding. Cost finding is the process of
apportionment must use the step-down method
recasting the data derived from the accounts
described in paragraph (d)(1) of this section or an
ordinarily kept by a provider to ascertain costs
"other method" described in paragraph (d)(2) of
CHCE Resource Manual 11.149
this section. For cost reporting periods beginning
that the nonrevenue-producing depart-
after December 31, 1971, providers using the com-
ments or centers furnish services to other
bination method of cost apportionment must use
nonrevenue-producing centers as well as
the modified cost finding method described in
to revenue-producing centers. A prelim-
paragraph (d)(3) of this section. Effective for cost
inary allocation of the costs of non-rev-
reporting periods beginning on or after October
enue-producing centers is made. These
1, 1980, HHAs not based in hospitals or SNFs must
centers or departments are not "closed"
use the step-down method described in para-
after this preliminary allocation. Instead,
graph (d)(1) of this section. (HHAs based in hos-
they remain "open," accumulating a por-
pitals or SNFs must use the method applicable to
tion of the costs of all other centers from
the parent institution.) However, an HHA not
which services are received. Thus, after the
based in a hospital or SNF that received less than
first or preliminary allocation, some costs
$35,000 in Medicare payment for the immediate-
will remain in each center representing
ly preceding cost reporting period, and for whom
services received from other centers. The
this payment represented less than 50 percent of
first or preliminary allocation is followed
the total operating cost of the agency, may use a
by a second or final apportionment of
simplified version of the step-down method, as
expenses involving the allocation of all
specified in instructions for the cost report issued
costs remaining in the nonrevenue-pro-
by HCFA.
ducing functions directly to revenue-pro-
(1) Step-down Method. This method recognizes
ducing centers.
that services furnished by certain nonrev-
(ii) More sophisticated methods. A more
enue-producing departments or centers are
sophisticated method designed to allo-
utilized by certain other nonrevenue-pro-
cate costs more accurately may be used
ducing centers as well as by the revenue-
by the provider upon approval of the
producing centers All costs of nonrevenue-
intermediary. However, having elected to
producing centers are allocated to all cen-
use the double-apportionment method,
ters that they serve, regardless of whether or
the provider may not thereafter use the
not these centers produce revenue. The cost
step-down method without approval of
of the nonrevenueproducing center serving
the intermediary. Written request for the
the greatest number of other centers, while
approval must be made on a prospective
receiving benefits from the least number of
basis and must be submitted before the
centers, is apportioned first. Following the
end of the fourth month of the prospec-
apportionment of the cost of the nonrev-
tive reporting period. Likewise, once hav-
enue-producing center, that center will be
ing elected to use a more sophisticated
considered "closed" and no further costs are
method, the provider may not thereafter
apportioned to that center. This applies even
use either the double-apportionment or
though it may have received some service
step-down methods without similar
from a center whose cost is apportioned later.
request and approval.
Generally, if two centers furnish services to
(3) Modified cost finding for providers using
an equal number of centers while receiving
the Combination Method for reporting
benefits from an equal number, that center
periods beginning after December 31, 1971.
which has the greatest amount of expense
This method differs from the step-down
should be allocated first.
method in that services furnished by non-
(2) Other methods.
revenue-producing departments or centers
(i) The double-apportionment method. The
are allocated directly to revenueproducing
double-apportionment method may be
departments or centers even though these
used by a provider upon approval of the
services may be utilized by other nonrev-
intermediary. This method also recognizes
enue-producing departments or centers. In
II.150 National Association for Home Care
the application of this method the cost of
(B) On the first day of the cost reporting
nonrevenue-producing centers having a
period, the hospital and distinct part
common basis of allocation are combined
SNF have fewer than 50 beds in total
and the total distributed to revenue-pro-
(with the exception of beds for new-
ducing centers. All nonrevenue-producing
borns and beds in intensive care type
centers having significant percentages of
inpatient units).
cost in relation to total costs will be allo-
(ii) In applying the optional reimbursement
cated this way. The combined total costs of
method, only those beds located in the
remaining nonrevenue-producing costs
hospital general routine service area and
centers will be allocated to revenue-pro-
in the distinct part SNF certified by
ducing cost centers in the proportion that
Medicare are combined into a single cost
each bears to total costs, direct and indirect,
center for purposes of cost finding.
already allocated. The bases which are to
(iii) The reasonable cost of the routine
be used and the centers which are to be
extended care services is determined in
combined for allocation are not optional
accordance with 413.114(c). The rea-
but are identified and incorporated in the
sonable cost of the hospital general rou-
cost report forms developed for this
tine services is determined in accordance
method. Providers using this method must
with 413.53(a)(2).
use the program cost report forms devised
(iv) The hospital must make its election to
for it. Alternative forms may not be used
use the optional swing-bed reimburse-
without prior approval by HCFA based
ment method in writing to the interme-
upon a written request by the provider sub-
diary before the beginning of the hospi-
mitted through the intermediary.
tal's cost reporting year. The hospital must
(4) Temporary method for initial period. If the
make any request to revoke the election
provider is unable to use either cost-finding
in writing before the beginning of the
method when it first participates in the pro-
affected cost reporting period.
gram, it may apply to the intermediary for
(v) The intermediary must approve requests
permission to use some other acceptable
to terminate use of the optional swing-
method that would accurately identify costs
bed reimbursement method. If a hospi-
by department or center, and appropriately
tal terminates use of this optional method,
segregate inpatient and outpatient costs.
no further elections may be made by the
Such other method may be used for cost
facility to use the optional method.
reports covering periods ending before
(e) Accounting basis. The cost data submitted must
January 1, 1968.
be based on the accrual basis of accounting which
(5) Simplified optional reimbursement method
is recognized as the most accurate basis for deter-
for small, rural hospitals with distinct parts
mining costs. However, governmental institutions
for cost reporting periods beginning on or
that operate on a cash basis of accounting may
after July 20, 1982.
submit cost data on the cash basis subject to
(i) A rural hospital with a Medicare-certified
appropriate treatment of capital expenditures.
distinct part SNF may elect to be reim-
(f) Cost reports. For cost reporting purposes, the
bursed for services furnished in its hospi-
Medicare program requires each provider of
tal general routine service area and distinct
services to submit periodic reports of its oper-
part SNF using the reimbursement method
ations that generally cover a consecutive 12-
specified in 413.53 for swing-bed hospi-
month period of the provider's operations.
tals, if it meets the following conditions:
Amended cost reports to revise cost report
(A) The institution is located in a rural
information that has been previously submit-
area as defined in 482.66 of this
ted by a provider may be permitted or required
chapter.
as determined by HCFA.
CHCE Resource Manual 11.151
(1) Cost reports. Terminated providers and
must be capable of producing the HCFA
changes of ownership. A provider that vol-
standardized output file in a form that
untarily or involuntarily ceases to participate
can be read by intermediary's automat-
in the Medicare program or experiences a
ed system. This electronic file, which
change of ownership must file a cost report
must contain the input data required to
for that period under the program beginning
complete the cost report and the data
with the first day not included in a previous
required to pass specified edits, is for-
cost reporting period and ending with the
warded to the fiscal intermediary for
effective date of termination of its provider
processing through its system.
agreement or change of ownership.
(ii) The fiscal intermediary stores the hospi-
(2) Due dates for cost reports.
tal's as-filed electronic cost report and may
(i) Cost reports are due on or before the
not alter that file for any reason. The fis-
last day of the fifth month following the
cal intermediary makes a "working copy"
close of the period covered by the report.
of the as-filed electronic cost report to be
For cost reports ending on a day other
used, as necessary, throughout the settle-
than the last day of the month, cost
ment process (that is, desk review, pro-
reports are due 150 days after the last
cessing audit adjustments, final settlement,
day of the cost reporting period.
etc). The hospital's electronic program
(ii) Extensions of the due date for filing a
must be able to disclose if any changes
cost report may be granted by the inter-
have been made to the as-filed electron-
mediary only when a provider's oper-
ic cost report after acceptance by the inter-
ations are significantly adversely affect-
mediary. If the as-filed electronic cost
ed due to extraordinary circumstances
report does not pass all specified edits,
over which the provider has no control,
the fiscal intermediary rejects the cost
such as flood or fire.
report and returns it to the hospital for
(3) Changes in cost reporting periods. A provider
correction. For purposes of the require-
may change its cost reporting period if a
ments in paragraph (f)(2) of this section
change in ownership is experienced or if the-
concerning due dates, an electronic cost
(i) Provider requests the change in writing
report is not considered to be filed until
from its intermediary;
it is accepted by the intermediary.
(ii) Intermediary receives the request at least
(iii) Effective for cost reporting periods ending
120 days before the close of the new
on or after September 30, 1994, a hospi-
reporting period requested by the
tal must submit a hard copy of a settlement
provider; and
summary, a statement of certain work-
(iii) Intermediary determines that good cause
sheet totals found within the electronic
for the change exists. Good cause would
file, and a statement signed by its admin-
not be found to exist if the effect is to
istrator or chief financial officer certifying
change the initial date that a hospital
the accuracy of the electronic file or the
would be affected by the rate of increase
manually prepared cost report. The fol-
ceiling (see 413.40), or be paid under
lowing statement must immediately pre-
the prospective payment systems (see
cede the dated signature of the hospital's
part 412 of this chapter).
administrator or chief financial officer:
(4) Electronic submission of cost reports.
I hereby certify that I have read the above
(i) Effective for cost reporting periods
certification statement and that I have
beginning on or after October 1, 1989,
examined the accompanying electroni-
a hospital is required to submit its cost
cally filed or manually submitted cost
reports in a standardized electronic for-
report and the Balance Sheet Statement
mat. The hospital's electronic program
of Revenue and Expenses prepared by
II-152 National Association for Home Care
XXXX (Provider Name(s) and
requirements of paragraphs (f)(4) and
Number(s)) for the cost reporting period
(f)(5)(i) of this section, the provider must
beginning XXXX and ending XXXX and
submit its cost reports in an electronic cost
that to the best of my knowledge and
report format in conformance with the
belief, this report and statement are true,
requirements contained in the Electronic
correct, complete and prepared from the
Cost Report (ECR) Specifications Manual
books and records of the provider in
(unless the provider has received an
accordance with applicable instructions,
exemption from HCFA).
except as noted. I further certify that I
(iii) The intermediary makes a determination
am familiar with the laws and regulations
of acceptability within 30 days of receipt
regarding the provision of health care
of the provider's cost report. If the cost
services, and that the services identified
report is considered unacceptable, the
in this cost report were provided in com-
intermediary returns the cost report with
pliance with such laws and regulations.
a letter explaining the reasons for the rejec-
(iv) A hospital may request a delay or waiver
tion. When the cost report is rejected, it is
of the electronic submission requirement
deemed an unacceptable submission and
in paragraph (f)(4)(i) of this section if this
treated as if a report had never been filed.
requirement would cause a financial hard-
(g) Exception from full cost reporting for lack of pro-
ship. The hospital must submit a written
gram utilization. If a provider does not furnish any
request for delay or waiver with necessary
covered services to Medicare beneficiaries during
supporting documentation to its interme-
a cost reporting period, it is not required to sub-
diary at least 120 days prior to the end of
mit a full cost report. It must, however, submit an
its cost reporting period. The intermedi-
abbreviated cost report, as prescribed by HCFA.
ary reviews the request and forwards it
(h) Waiver of full or simplified cost reporting for low
with a recommendation for approval or
program utilization.
denial, to HCFA central office within 30
(1) If the provider has had low utilization of cov-
days of receipt of the request. HCFA cen-
ered services by Medicare beneficiaries (as
tral office either approves or denies the
determined by the intermediary) and has
request and notifies the intermediary with-
received correspondingly low interim pay-
in 60 days of receipt of the request.
ments for the cost reporting period, the inter-
(5) An acceptable cost report submission is
mediary may waive a full cost report or the
defined as follows:
simplified cost report described in 413.321 if
(i) All providers. The provider, must com-
it decides that it can determine, without a full
plete and submit the required cost
or simplified report, the reasonable cost of
reporting forms, including all necessary
covered services provided during that period.
signatures. A cost report is rejected for
(2) If a full or simplified cost report is waived,
lack of supporting documentation only
the provider must submit within the same
if it does not include the Provider
time period required for full or simplified
Cost Reimbursement Questionnaire.
cost reports:
Additionally, a cost report for a teaching
(i) The cost reporting forms prescribed by
hospital is rejected for lack of support-
HCFA for this situation; and
ing documentation if the cost report does
(ii) Any other financial and statistical data
not include a copy of the Intern and
the intermediary requires.
Resident Information System diskette.
[51 FR 34793, Sept. 30, 1986, as amended at 57 FR 39829, Sept. 1.
(ii) For providers that are required to file elec-
1992; 59 FR 26964, May 25, 1994; 60 FR 33125, 33136, 33143, June
tronic cost reports. In addition to the
27, 1995; 60 FR 37594, July 21, 1995/
CHCE Resource Manual 11.153
42 CFR Part 413-Subpart C-Limits on Cost Reimbursement
413.30 Limitations on reimbursable costs.
(iii) Size of institution;
(a) Introduction.
(iv) Nature and mix of services furnished; or
(1) Scope. This section implements section
(v) Type and mix of patients treated.
1861(v)(1)(A) of the Act, by setting forth the
(2) Estimates of the costs necessary for efficient
general rules under which HCFA may estab-
delivery of health services may be based on
lish limits on provider costs recognized as
cost reports or other data providing indica-
reasonable in determining Medicare program
tors of current costs. Current and past peri-
payments, and sections 1861(v)(7)(B) and
od data will be adjusted to arrive at estimat-
1886(a) of the Act, by setting forth the gen-
ed costs for the prospective periods to which
eral rules under which HCFA may establish
limits are being applied.
limits on the operating costs of inpatient hos-
(3) Prior to the beginning of a cost period to
pital services that are recognized as reason-
which revised limits will be applied, HCFA
able in determining Medicare program pay-
will publish a notice in the FEDERAL REG-
ments. (For cost reporting periods beginning
ISTER, establishing cost limits and explaining
on or after October 1, 1983, the operating
the basis on which they were calculated.
costs incurred in furnishing inpatient hospi-
(4) In establishing limits under paragraph (b)(1)
tal services are not subject to the provisions
of this section, HCFA may find it inappropri-
of this section.) This section also sets forth
ate to apply particular limits to a class of
rules governing exemptions, exceptions, and
providers due to the characteristics of the
adjustments to limits established under this
provider class, the data on which those lim-
section that HCFA may make as appropriate
its are based, or the method by which the lim-
in consideration of special needs or situa-
its are determined. In such cases, HCFA may
tions of particular providers.
exclude that class of providers from the lim-
(2) General principle. Reimbursable provider costs
its, explaining the basis of the exclusion in
may not exceed the costs estimated by HCFA
the notice setting forth the limits for the
to be necessary for the efficient delivery of
appropriate cost reporting periods.
needed health services. HCFA may establish
(c) Provider requests regarding applicability of cost
estimated cost limits for direct or indirect over-
limits. A provider may request a reclassification,
all costs or for costs of specific items or ser-
exception, or exemption from the cost limits
vices or groups of items or services. These
imposed under this section. In addition, a hospi-
limits will be imposed prospectively and may
tal may request an adjustment to the cost limits
be calculated on a per admission, per dis-
imposed under this section. The provider's request
charge, per diem, per visit, or other basis.
must be made to its fiscal intermediary within 180
(b) Procedure for establishing limits.
days of the date on the intermediary's notice of
(1) In establishing limits under this section, HCFA
program reimbursement. The intermediary makes
may classify providers by type of provider
a recommendation on the provider's request to
(for example, hospitals, SNFs, and HHAs)
HCFA, which makes the decision. HCFA responds
and by other factors HCFA finds appropriate
to the request within 180 days from the date HCFA
and practical, including-
receives the request from the intermediary. The
(i) Type of services furnished;
intermediary notifies the provider of HCFA's deci-
(ii) Geographical area where services are
sion. The time required for HCFA to review the
furnished, allowing for grouping of non-
request is considered good cause for the granti-
contiguous areas having similar demo-
ng of an extension of the time limit to apply for
graphic and economic characteristics;
a Board review, as specified in 405.1841 of this
II-154 National Association for Home Care
chapter. HCFA's decision is subject to review under
population that varies significantly dur-
subpart R of part 405 of this chapter.
ing the year;
(d) Reclassification. A provider may obtain a reclas-
(ii) The appropriate health planning agency
sification if it can show that its classification is
has determined that the area does not
at variance with the criteria specified in pro-
have a surplus of beds and similar ser-
mulgating the limits.
vices and has certified that the beds and
(e) Exemptions. Exemptions from the limits imposed
services made available by the provider
under this section may be granted to a new
are necessary; and
provider. A new provider is a provider of inpa-
(iii) The provider meets occupancy standards
tient services that has operated as the type of
established by the Secretary.
provider (or the equivalent) for which it is certi-
(4) Medical and paramedical education. The
fied for Medicare, under present and previous
provider can demonstrate that, if compared
ownership, for less than three full years. An
to other providers in its group, it incurs
exemption granted under this paragraph expires
increased costs for items or services covered
at the end of the provider's first cost reporting
by limits under this section because of its
period beginning at least two years after the
operation of an approved education program
provider accepts its first patient.
specified in 413.85.
(f) Exceptions. Limits established under this section
(5) Unusual labor costs. The provider has a per-
may be adjusted upward for a provider under
centage of labor costs that varies more than
the circumstances specified in paragraphs (f)(1)
10 percent from that included in the pro-
through (f)(5) of this section. An adjustment is
mulgation of the limits.
made only to the extent the costs are reasonable,
(g) Operational review of providers receiving an
attributable to the circumstances specified, sepa-
exception. Any provider that applies for an excep-
rately identified by the provider, and verified by
tion to the limits established under paragraph (f)
the intermediary.
of this section must agree to an operational review
(1) Atypical services. The provider can show that
at the discretion of HCFA. The findings from any
the-
such review may be the basis for recommenda-
(i) Actual cost of items or services furnished
tions for improvements in the efficiency and econ-
by a provider exceeds the applicable limit
omy of the provider's operations. If such recom-
because such items or services are atyp-
mendations are made, any future exceptions shall
ical in nature and scope, compared to
be contingent on the provider's implementation
the items or services generally furnished
of these recommendations.
by providers similarly classified; and
(h) Adjustments. For cost reporting periods begin-
(ii) Atypical items or services are furnished
ning on or after October 1, 1982 and before
because of the special needs of the
October 1, 1983, HCFA may adjust the amount of
patients treated and are necessary in the
a hospital's inpatient operating costs to take into
efficient delivery of needed health care.
account factors that could result in a significant
(2) Extraordinary circumstances. The provider
distortion in the operating costs of inpatient hos-
can show that it incurred higher costs due to
pital services. Such factors could include a
extraordinary circumstances beyond its con-
decrease in the inpatient services that a hospital
trol. These circumstances include, but are not
provides that are customarily provided directly
limited to, strikes, fire, earthquake, flood, or
by similar hospitals, or the manipulation of dis-
similar unusual occurrences with substantial
charges to increase reimbursement. A decrease in
cost effects.
inpatient services could result from changes that
(3) Providers in areas with fluctuating popu-
include, but are not limited to, such actions as clos-
lations.
ing a special care unit or changing the arrange-
(i) The provider is located in an area
ments under which such services may be fur-
(for example, a resort area) that has a
nished, such as leasing a department.
CHCE Resource Manual 11.155
[51 FR 34793, Sept. 30, 1986, as amended at 52 FR 21225, June 4,
period exceed the prospective limits estab-
1987; 53 FR 38533, Sept. 30, 1988; 60 FR 45849, Sept. 1, 1995]
lished for such costs, the intermediary will,
at the provider's request, validate in advance
413.35 Limitations on coverage of costs: Charges to
the charges that may be made to the bene-
beneficiaries if cost limits are applied to services.
ficiaries for the excess.
Principle. A provider of services that customarily furnish-
(2) If a provider does not have a second pre-
es an individual items or services that are more expen-
ceding cost period and is a new provider as
sive than the items or services determined to be neces-
defined in 413.30(e), the provider, subject to
sary in the efficient delivery of needed health services
validation by the intermediary, will estimate
described in 413.30, may charge an individual entitled to
the current cost of the service to which a limit
benefits under Medicare for such more expensive items
is being applied. Such amount will be adjust-
or services even though not requested by the individual.
ed to an amount equivalent to costs in the
The charge, however, may not exceed the amount by
second preceding year by use of a factor to
which the cost of (or, if less, the customary charges for)
be developed based on estimates of cost
such more expensive items or services furnished by such
increases during the preceding two years and
provider in the second cost reporting period immediate-
published by SSA or HCFA. The amount thus
ly preceding the cost reporting period in which such
derived will be used in lieu of the second
charges are imposed exceeds the applicable limit imposed
preceding cost period amount in determin-
under the provisions of 413.30. This charge may be made
ing the charge to the beneficiary.
only if-
(3) To obtain consideration of such a request,
(1) The intermediary determines that the charges
the provider must submit to the intermediary
have been calculated properly in accordance
a statement indicating the chagre for which
with the provisions of this section;
it is seeking validation and providing the data
(2) The services are not emergency services as
and method used to determine the amount.
defined in paragraph (d) of this section;
Such statement should include the-
(3) The admitting physician has no direct or indi-
(i) Provider's name and number;
rect financial interest in such provider;
(ii) Identity of class and prospective cost limit
(4) HCFA has provided notice to the public
for the class in which the provider has
through notice in a newspaper of general
been included;
circulation servicing the provider's locality
(iii) Amount of charge and cost period in
and such other notice as the Secretary may
which the charge is to be imposed;
require, of any charges the provider is autho-
(iv) Cost and customary charge for items and
rized to impose on individuals entitled to
services furnished to beneficiaries; and
benefits under Medicare on account of costs
(v) Cost period ending date of the second
in excess of the costs determined to be nec-
reporting period immediately preceding
essary in the efficient delivery of needed
the cost period in which the charge is to
health services under Medicare; and
be imposed. The intermediary may
(5) The provider has, in the manner described
request such additional information as it
in paragraph (e) of this section, identified
finds necessary with respect to the request.
such charges to such individual or person
(c) Provider charges.
acting on his behalf as charges to meet the
(1) Establishing the charges. If the actual cost
costs in excess of the costs determined to be
incurred (or, if less, the customary charges)
necessary in the efficient delivery of needed
in the prior period determined under para-
health services under Medicare.
graph (a) of this section exceeds the limits
(b) Provider request to charge beneficiaries for costs
applicable to the pertinent period, the
in excess of limits.
provider may charge the beneficiary to the
(1) If a provider's actual costs (or, if less, the cus-
extent costs in the second preceding cost
tomary charges) in the second preceding cost
reporting period (or the equivalent when
11.156 National Association for Home Care
there is no second preceding period) exceed
(d) Definition of emergency services. For purposes
the current cost limits. (Data from the most
of paragraph (a)(2) of this section, emergency
recently submitted appropriate cost report
services are those hospital services that are nec-
will be used in determining the actual cost.)
essary to prevent the death or serious impairment
For example, if a limit of $58 per day is
of the health of the individual, and which, because
applied to the cost of general routine services
of the threat to the life or health of the individ-
for the provider's cost reporting period start-
ual, necessitate the use of the most accessible
ing in calendar year 1975 and if the
hospital (as determined under 424.106 of this
provider's actual general routine cost in the
second preceding reporting period, that is,
chapter) available and equipped to furnish such
the reporting period starting in calendar year
services. If an individual has been admitted to
1973, was $60 per day, the provider (after
such hospital as an inpatient because of an emer-
first having obtained intermediary valida-
gency, the emergency will be deemed to contin-
tion and subject to the considerations and
ue until it is safe from a medical standpoint to
requirements specified in paragraph (a) of
move the individual to another hospital or other
this section) may charge Medicare Part A
institution or to discharge him.
beneficiaries up to $2 per day for general
(e) Identification of charges to individual. For pur-
routine services.
poses of paragraph (a)(5) of this section, a provider
(2) Adjusting cost. Program reimbursement for
must give or send to the individual or his repre-
the costs to which limits imposed under
sentative, a schedule of all items and services that
413.30 are applied in any cost reporting peri-
the individual might need and for which the
od will not exceed the lesser of the provider's
provider imposes charges under this section, and
actual cost or the limits imposed under 413.30.
the charge for each. Such schedule must specify
If program reimbursement for items or ser-
that the charges are necessary to meet the costs in
vices to which such limits are applied plus the
excess of the costs determined to be necessary in
charges to beneficiaries for such items or ser-
the efficient delivery of needed health services
vices imposed under this section exceed the
under Medicare and include such other informa-
provider's actual cost for such items or ser-
vices, program payment to the provider will
tion as HCFA considers necessary to protect the
be reduced to the extent program payment
individual's rights under this section. The provider,
plus charges to the beneficiaries exceed actu-
in arranging for the individual's admission, first ser-
al cost. If the provider's actual cost for gen-
vice, or start of care, must give or send this sched-
eral routine services in 1975 was $57,000, the
ule to the individual or his representative when
cost limit was $58,000, and billed charges to
arrangements are being made for such services or
Medicare Part A beneficiaries were $2,000,
if this is not feasible, as soon thereafter as is prac-
the provider would receive $55,000 from the
ticable but no later than at the initiation of services.
program ($57,000 actual cost minus the $2,000
[51 FR 34793, Sept. 30, 1986, as amended at 53 FR 6648, Mar. 20,
in charges to the beneficiaries).
1988; 60 FR 45849, Sept. 1, 1995]
CHCE Resource Manual 11.157
42 CFR Part 413-Subpart D-Apportionment
413.50 Apportionment of allowable costs.
(d) The method of cost reimbursement most wide-
(a) Consistent with prevailing practice in which third-
ly used at the present time by third-party pur-
party organizations pay for health care on a cost
chasers of inpatient hospital care apportions a
basis, reimbursement under the Medicare program
provider's total costs among groups served on
involves a determination of-
the basis of the relative number of days of care
(1) Each provider's allowable costs for produc-
used. This method, commonly referred to as
ing services; and
average-per-diem cost, does not take into
(2) The share of these costs which is to be borne
account, variations in the amount of service
by Medicare. The provider's costs are to be
which a day of care may represent and there-
determined in accordance with the princi-
by assumes that the patients for whom pay-
ples reviewed in the preceding discussion
ment is made on this basis are average in their
relating to allowable costs. The share to be
use of service.
borne by Medicare is to be determined in
(e) In considering the average-per-diem method of
accordance with principles relating to appor-
apportioning cost for use under the program, the
tionment of cost.
difficulty encountered is that the preponderance
(b) In the study and consideration devoted to the
of presently available evidence strongly indicates
method of apportioning costs, the objective
that the over-age 65 patient is not typical from the
has been to adopt methods for use under
standpoint of average-per-diem cost. On the aver-
Medicare that would, to the extent reasonably
age this patient stays in the hospital twice as long
possible, result in the program's share of a
and therefore the ancillary services that he uses
provider's total allowable costs being the same
are averaged over the longer period of time,
as the program's share of the provider's total
resulting in an average-per-diem cost for the aged
services. This result is essential for carrying out
alone, significantly below the average-per-diem
the statutory directive that the program's pay-
for all patients.
ments to providers should be such that the
(f) Moreover, the relative use of services by aged
costs of covered services for beneficiaries
patients as compared to other patients differs sig-
would not be passed on to nonbeneficiaries,
nificantly among institutions. Consequently, con-
nor would the cost of services for nonbenefi-
siderations of equity among institutions are involved
ciaries be borne by the program.
as well as that of effectiveness of the apportionment
(c) A basic factor bearing upon apportionment of
method under the program in accomplishing the
costs is that Medicare beneficiaries are not a cross
objective of paying each provider fully, but only
section of the total population. Nor will they con-
for services to beneficiaries.
stitute a cross section of all patients receiving ser-
(g) A further consideration of long-range impor-
vices from most of the providers that participate
tance is that the relative use of services by aged
in the program. Available evidence shows that
and other patients can be expected to change,
the use of services by persons age 65 and over
possibly to a significant extent in future years.
differs significantly from other groups.
The ability of apportionment methods used
Consequently, the objective sought in the deter-
under the program to reflect such change is an
mination of the Medicare share of a provider's
element of flexibility which has been regard-
total costs means that the methods used for appor-
ed as important in the formulation of the cost
tionment must take into account the differences
reimbursement principles.
in the amount of services received by patients
(h) An alternative to the relative number of days of
who are beneficiaries and other patients serviced
care as a basis for apportioning costs is the rel-
by the provider.
ative amount of charges billed by the provider
II-158 National Association for Home Care
for services to patients. The amount of charges
[Amended by: 61 FR 51611 - 10/03/96 - MEDICARE
is the basis upon which the cost of hospital care
AND MEDICAID PROGRAMS; NEW PAYMENT
is distributed among patients who pay directly
METHODOLOGY FOR ROUTINE EXTENDED CARE
for the services they receive. Payment for services
SERVICES PROVIDED IN A SWING-BED HOSPITAL]
on the basis of charges applies generally under
Principle. Total allowable costs of a provider will be appor-
insurance programs in which individuals are
tioned between program beneficiaries and other patients
indemnified for incurred expenses, a form of
so that the share borne by the program is based upon actu-
health insurance widely held throughout the
al services received by program beneficiaries. The meth-
United States. Also, charges to patients are com-
ods of apportionment are defined as follows:
monly a factor in determining the amount of
(1) Departmental method.
payment to hospitals under insurance programs
(i) Methodology. Except as provided in para-
providing service benefits, many of which pay
graph (a)(1)(ii) of this section with respect
"costs or charges, whichever is less" and some
to the treatment of the private room cost
of which pay exclusively on the basis of charges.
differential for cost reporting periods start-
In all of these instances, the provider's own
ing on or after October 1, 1982, the ratio
charge structure and method of itemizing ser-
of beneficiary charges to total patient
vices for the purpose of assessing charges is uti-
charges for the services of each ancillary
lized as a measure of the amount of services
department is applied to the cost of the
received and as the basis for allocating respon-
department; to this is added the cost of
sibility for payment among those receiving the
routine services for program beneficia-
provider's services.
ries, determined on the basis of a sepa-
(i) An increasing number of third-party purchasers
rate average cost per diem for general
who pay for services on the basis of cost are
routine patient care areas as defined in
developing methods that utilize charges to mea-
paragraph (b) of this section, taking into
sure the amount of services for which they have
account, in hospitals, a separate average
responsibility for payment. In this approach,
cost per diem for each intensive care unit,
the amount of charges for such services as a
coronary care unit, and other intensive
proportion of the provider's total charges to all
care type inpatient hospital units.
patients is used to determine the proportion of
(ii) Exception: Indirect cost of private rooms.
the provider's total costs for which the third-
For cost reporting periods starting on or
party purchaser assumes responsibility. The
after October 1, 1982, except with respect
approach is subject to numerous variations. It
to a hospital receiving payment under
can be applied to the total of charges for all ser-
part 412 of this chapter, the additional
vices combined or it can be applied to com-
cost of furnishing services in private room
ponents of the provider's activities for which the
accommodations is apportioned to
amount of costs and charges are ascertained
Medicare only if these accommodations
through a breakdown of data from the
are furnished to program beneficiaries,
provider's accounting records.
and are medically necessary. To deter-
(j) For the application of the approach to compo-
mine routine service cost applicable to
nents, which represent types of services, the
beneficiaries—
breakdown of total costs is accomplished by
(A) Multiply the average cost per diem
"cost-finding" techniques under which indirect
(as defined in paragraph (b) of this
costs and nonrevenue activities are allocated
section) by the total number of
to revenue producing components for which
Medicare patient days (including pri-
charges are made as services are furnished.
vate room days whether or not med-
ically necessary);
413.53 [Amended] Determination of cost of services
(B) Add the product of the average per
to beneficiaries.
diem private room cost differential
CHCE Resource Manual 11.159
(as defined in paragraph (b) of this
a Medicaid program, the cost per
section) and the number of med-
diem for ICF services will be based on
ically necessary private room days
the average ratio of the ICF rate to
used by beneficiaries; and
the SNF rate in those States that pro-
(C) Do not include private rooms fur-
vide for both SNF and ICF services
nished for SNF-type and ICF-type
under Medicaid. The ratio will be
services under the swingbed pro-
applied to the SNF cost per diem
vision in the number of days in
determined under paragraph (a)(2)(ii)
paragraphs (a)(1)(ii)(A) and (B) of
of this section.
this section.
(iv) The sum of total SNF-type days fur-
(2) Carve out method.
nished to all classes of patients multi-
(i) The carve out method is used to allocate
plied by the SNF cost per diem, and
hospital inpatient general routine ser-
total ICF-type days furnished to all
vice costs in a participating swing-bed
classes of patients multiplied by the
hospital, as defined in 413.114(b). Under
appropriate ICF cost per diem, will be
this method, the total costs attributable
subtracted from inpatient general rou-
to the SNF-type and ICF-type services
tine service costs. The cost per diem
furnished to all classes of patients are
for inpatient general routine hospital
subtracted from total general routine
care will be based on the remaining
inpatient service costs before computing
general routine service costs.
the average cost per diem for general
(v) Costs other than general inpatient rou-
routine hospital care.
tine service costs will be determined
(ii) The cost per diem attributable to the
in the same manner as specified in the
routine SNF-type services furnished by
Departmental Method in paragraph
a swing-bed hospital is based on the
(a)(1) of this section.
reasonable cost per diem for services
(3) Cost per visit by type-of-service method-
determined in accordance with 413.114.
HHAs. For cost reporting periods beginning
(iii) The cost per diem attributable to the rou-
on or after October 1, 1980, all HHAs must
tine ICF services furnished by the swing-
use the cost per visit by type-of-service
bed hospital is determined as follows:
method of apportioning costs between
(A) If the hospital is located in a State
Medicare and non-Medicare beneficiaries.
that provides for ICF services
Under this method, the total allowable cost
under Medicaid, the cost per diem
of all visits for each type of service is divid-
for ICF services furnished by a
ed by the total number of visits for that type
swing-bed hospital in that State is
of service. Next, for each type of service, the
based on the Statewide average
number of Medicare covered visits is multi-
rate paid for routine services in
plied by the average cost per visit just com-
ICFs (other than ICFs for the men-
puted. This represents the cost Medicare will
tally retarded) during the preced-
recognize as the cost for that service, subject
ing calendar year under the State
to cost limits published by HCFA (see 413.30).
Medicaid plan. The Statewide aver-
Definitions. As used in this section-
age rate will be computed either
Ancillary services means the services for which charges are
by the State and furnished to
customarily made in addition to routine services.
HCFA, or by HCFA directly based
Apportionment means an allocation or distribution of
on the best available data.
allowable cost between the beneficiaries of the Medicare
(B) If the hospital is located in a State that
program and other patients.
does not provide for ICF services
Average cost per diem for general routine services means
under Medicaid or that does not have
the following:
II-160 National Association for Home Care
(1) For cost reporting periods beginning on or
Average per diem private room cost
after October 1, 1982, subject to the provisions
differential means the difference in the
on swing-bed hospitals, the average cost of
average per diem cost of furnishing
general routine services net of the private room
routine services in a private room and
cost differential. The average cost per diem is
in a semi-private room. (This differen-
computed by the following methodology:
tial is not applicable to hospital inten-
(i) Determine the total private room cost
sive care type units.) (The method for
differential by multiplying the average
computing this differential is described
per diem private room cost differential
in paragraph (c) of this section.)
determined in paragraph (c) of this sec-
Charges means the regular rates for
tion by the total number of private room
various services that are charged to
patient days.
both beneficiaries and other paying
(ii) Determine the total inpatient general
patients who receive the services.
routine service costs net of the total
Implicit in the use of charges as the
private room cost differential by sub-
basis for apportionment is the objec-
tracting the total private room cost dif-
tive that charges for services be relat-
ferential from total inpatient general
ed to the cost of the services.
routine service costs.
ICF-type services means routine services
(iii) Determine the average cost per diem by
furnished by a swing-bed hospital that
dividing the total inpatient general routine
would constitute intermediate care facil-
service cost net of private room cost dif-
ity (ICF) services, as defined in 440.150
ferential by all inpatient general routine
of this chapter, if furnished by an ICF.
days, including total private room days.
ICF-type services are not covered under
(2) For swing-bed hospitals, the amount com-
the Medicare program.
puted by-
Intensive care type inpatient hospital unit
(i) Subtracting the costs attributable to
means a hospital unit that furnishes ser-
SNF-type and ICF-type services from
vices to critically ill inpatients. Examples
the total allowable inpatient cost for
of intensive care type units include, but
routine services (excluding the cost of
are not limited to, intensive care units,
services provided in intensive care
trauma units, coronary care units, pul-
units, coronary care units, and other
monary care units, and burn units.
intensive care type inpatient hospital
Excluded as intensive care type units are
units, and nursery costs); and
postoperative recovery rooms, postanes-
(ii) Dividing the remainder (excluding the
thesia recovery rooms, maternity labor
total private room cost differential) by
rooms, and subintensive or intermediate
the total number of inpatient hospital
care units. (The unit must also meet the
days of care (excluding SNFtype and ICF-
criteria of paragraph (d) of this section.)
type days of care, days of care in inten-
SNF-type services means routine services
sive care units, coronary care units, and
furnished by a swing-bed hospital that
other intensive care type inpatient hos-
would constitute extended care services
pital units, and newborn days and includ-
if furnished by an SNF. SNFtype services
ing total private room days).
include routine services furnished in the
Average cost per diem for hospital inten-
distinct part SNF of a hospital complex
sive care type units means the amount
that is combined with the hospital gen-
computed by dividing the total allowable
eral routine service area cost center under
costs for routine services in each of these
413.24(d)(5).
units by the total number of inpatient days
Ratio of beneficiary charges to total
of care furnished in each of these units.
charges on a departmental basis means
CHCE Resource Manual 11.161
Hospital Y
Department
Charges to
Total
Ratio of
Total
Cost of
Program
Charges
Beneficiary Charges
Cost
Beneficiary
Beneficiaries
to Total Charges
Services
Percent
Operating rooms
$20,000
$70,000
28 4/7
$77,000
$22,000
Delivery rooms
0
12,000
0
30,000
0
Pharmacy
20,000
60,000
33 1/3
45,000
15,000
X-ray
24,000
100,000
24
75,000
18,000
Laboratory
40,000
140,000
28 4/7
98,000
28,000
Others
6,000
30,000
20
25,000
5,000
Total
110,000
412,000
350,000
88,000
Total
Total
Average
Program in
Cost of
Inpatient
Cost
Cost per Diem
Patient Days
Beneficiary
beneficiaries
Services
General routine
30,000
$630,000
$21
8,000
$168,000
Coronary care unit
500
20,000
40
200
8,000
Intensive care unit
3,000
108,000
36
1,000
36,000
33,500
758,000
9,200
212,000
Total
300,000
the ratio of charges to beneficiaries of
and the use of equipment and facilities
the Medicare program for services of a
for which a separate charge is not cus-
revenue-producing department or cen-
tomarily made.
ter to the charges to all patients for that
(c) Method for computing the average per diem pri-
center during an accounting period. After
vate room cost differential. Compute the average
each revenue-producing center's ratio is
per diem private room cost differential as follows:
determined, the cost of services furnished
(1) Determine the average per diem private
to beneficiaries of the Medicare program
room charge differential by subtracting the
is computed by applying the individual
average per diem charge for all semi-pri-
ratio for the center to the cost of the relat-
vate room accommodations from the aver-
ed center for the period.
age per diem charge for all private room
Routine services means the regular
accommodations. The average per diem
room, dietary, and nursing services,
charge for private room accommodations is
minor medical and surgical supplies,
determined by dividing the total charges for
#-162 National Association for Home Care
private room accommodations by the total
allocation. If such records are not available,
number of days of care furnished in private
then the costs must be allocated to the gen-
room accommodations. The average per
eral routine services cost areas;
diem charge for semi-private accommoda-
(3) Has specific written policies that include
tions is determined by dividing the total
criteria for admission to, and discharge
charges for semi-private room accommoda-
from, the unit;
tions by the total number of days of care
(4) Has registered nursing care available on a
furnished in semi-private accommodations.
continuous 24-hour basis with at least one
(2) Determine the inpatient general routine cost
registered nurse present in the unit at all times;
to charge ratio by dividing total inpatient
(5) Maintains a minimum nurse-patient ratio of
general routine service cost by the total
one nurse to two patients per patient day.
inpatient general routine service charges.
Included in the calculation of this nurse-
(3) Determine the average per diem private room
patient ratio are registered nurses, licensed
cost differential by multiplying the average
vocational nurses, licensed practical nurses,
per diem private room charge differential
and nursing assistants who provide patient
determined in paragraph (c)(1) of this section
care. Not included are general support per-
by the ratio determined in paragraph (c)(2)
sonnel such as ward clerks, custodians, and
of this section.
housekeeping personnel; and
(d) Criteria for identifying intensive care type units.
(6) Is equipped, or has available for immediate
For purposes of determining costs under this sec-
use, lifesaving equipment necessary to treat
tion, a unit will be identified as an intensive care
the critically ill patients for which it is designed.
type inpatient hospital unit only if the unit-
This equipment may include, but is not limit-
(1) Is in a hospital;
ed to, respiratory and cardiac monitoring equip-
(2) Is physically and identifiably separate from
ment, respirators, cardiac defibrillators, and
general routine patient care areas, including
wall or canister oxygen and compressed air.
subintensive or intermediate care units, and
(e) Application -
ancillary service areas. There cannot be a
(1) Departmental method. Cost reporting peri-
concurrent sharing of nursing staff between
ods beginning on or after October 1, 1982.
an intensive care type unit and units or areas
(i) The following example illustrates how
furnishing different levels or types of care.
costs would be determined, using only
However, two or more intensive care type
inpatient data, for cost reporting peri-
units that concurrently share nursing staff can
ods beginning on or after October 1,
be reimbursed as one combined intensive
1982, based on apportionment of-
care type unit if all other criteria are met. Float
(A) The average cost per diem for general
nurses (nurses who work in different units on
routine services (subject to the pri-
an as-needed basis) can be utilized in the
vate room differential provisions of
intensive care type unit. If a float nurse works
paragraph (a)(1)(iii) of this section);
in two different units during the same eight
(B) The average cost per diem for each
hour shift, then the costs must be allocated
intensive care type unit;
to the appropriate units depending upon the
(C) The ratio of beneficiary charges to
time spent in those units. The hospital must
total charges applied to cost by
maintain adequate records to support the
department.
CHCE Resource Manual 11.163
(ii) The following illustrates how appor-
tionment based on an average cost per
diem for general routine services is
determined.
Hospital E
Facts
Private
Semi-Private
Total
Accomodations
Accomodations
Total charges
$20,000
$175,000
$195,000
Total days
100
1,000
1,100
Program days
70
400
470
Medically necessary for
20
program beneficiaries
20
Total general routine
service costs
165,000
Average private room per diem charge ($20,000 private room charges 100 days)
Average semi-private room per diem charge ($175,000 semi-private charge 1,000 days)
1 $200
1 $175
1 per diem
Average per diem private room cost differential.
1. Average per diem private room charge differential ($200 private room per diem-$175, semi-private room per diem), $25.
2. Inpatient general routine cost/charge ratio ($165,000 total costs + $195,000 total charges), 0.8461538.
3. Average per diem private room cost differential ($25 charge differential X .8461538 cost/charge ratio), $21.15. Average cost
per diem for inpatient general routine services.
4. Total private room cost differential ($21.15 average per diem cost differential X 100 private room days), $2,115.
5. Total inpatient general routine service costs net of private room cost differential ($165,000 total routine cost -$2,115 private
room cost differential), $162,885.
6. Average cost per diem for inpatient general routine services ($162,885 routine cost net of private room cost differential
1,100 patient days), $148.08. Medicare general routine service cost.
7. Total routine per diem cost applicable to Medicare ($148.08 average cost per diem X 470 Medicare private and semi-private
patient days), $69,598.
8. Total private room cost differential applicable to Medicare ($21.15 average per diem private room cost differential X 20 med-
ically necessary private room days), $423.
9. Medicare inpatient general routine service cost ($423 Medicare private room cost differential + $69,598 Medicare cost of
general routine inpatient services), $70,021.
II-164 National Association for Home Care
(2) Carve out method. The following illus-
trates how apportionment is determined
in a hospital reimbursed under the carve
out method (subject to the private room
differential provisions of paragraph
(a)(1)(ii) of this section):
[51 FR 34793, Sept. 30, 1986, as amended at 59 FR 45401, Sept. 1,
1994]
DAYS OF CARE
General Routine Hospital
SNF-Type
ICF-Type
Facts
2,000
400
100
Total days of care
600
300
Medicare days of care
n/a
$35
$20
Average Medicaid rate
Total inpatient general routine service costs:
$250,000
Calculation of cost of routine SNF-type services applicable to Medicare:
$35 X 300 = $10,500
Calculation of cost of general routine hospital services
Cost of SNF-type services: $35 X 400
$14,000
Cost of ICF-type services: $35 X 400
.2,000
Total
$16,000
Average cost per diem of general routine hospital services:
$250,000 $16,000 2,000 days = $117
Medicare general routine hospital cost:
$117 X 600 = $70,200
Total Medicare reasonable cost for general routine inpatient days:
$10,500 + $70,200 = $80,700
CHCE Resource Manual 11.165
42 CFR Part 413-Subpart E-Payments to Providers
413.60 Payments to providers: General.
Since actual costs of services cannot be determined
(a) The fiscal intermediaries will establish a basis for
until the end of the accounting period, the
interim payments to each provider. This may be
providers must be paid on an estimated cost basis
done by one of several methods. If an interme-
during the year. While Medicare provides that inter-
diary is already paying the provider on a cost
im payments will be made no less often than
basis, the intermediary may adjust its rate of pay-
monthly, intermediaries are expected to make pay-
ment to an estimate of the result under the
ments on the most expeditious basis administra-
Medicare principles of reimbursement. If no orga-
tively feasible. Whatever estimated cost basis is
nization is paying the provider on a cost basis, the
used for determining interim payments during the
intermediary may obtain the previous year's finan-
year, the intent is that the interim payments shall
cial statement from the provider and, by apply-
approximate actual costs as nearly as is practica-
ing the principles of reimbursement, compute or
ble so that the retroactive adjustment based on
approximate an appropriate rate of payment. The
actual costs will be as small as possible.
interim payment may be related to the last year's
(c) Interim payments during initial reporting period.
average per diem, or to charges, or to any other
At the beginning of the program or when a
ready basis of approximating costs.
provider first participates in the program, it will
(b) At the end of the period, the actual apportion-
be necessary to establish interim rates of pay-
ment, based on the cost finding and apportionment
ment to providers of services. Once a provider has
methods selected by the provider, determines the
filed a cost report under the Medicare program,
Medicare reimbursement for the actual services
the cost report may be used as a basis for deter-
provided to beneficiaries during the period.
mining the interim rate of reimbursement for the
(c) Basically, therefore, interim payments to providers
following period. However, since initially there is
will be made for services throughout the year,
no previous history of cost under the program,
with final settlement on a retroactive basis at the
the interim rate of payment must be determined
end of the accounting period. Interim payments
by other methods, including the following:
will be made as often as possible and in no event
(1) If the intermediary is already paying the
less frequently than once a month. The retroac-
provider on a cost or cost-related basis, the
tive payments will take fully into account the
intermediary will adjust its rate of payment
costs that were actually incurred and settle on an
to the program's principles of reimbursement.
actual, rather than on an estimated basis.
This rate may be either an amount per inpa-
tient day, or a percent of the provider's
413.64 Payments to providers: Specific rules.
charges for services furnished to the pro-
(a) Reimbursement on a reasonable cost basis.
gram's beneficiaries.
Providers of services paid on the basis of the rea-
(2) If an organization other than the intermedi-
sonable cost of services furnished to beneficiaries
ary is paying the provider for services on a
will receive interim payments approximating the
cost or cost-related basis, the intermediary
actual costs of the provider. These payments will
may obtain from that organization or from the
be made on the most expeditious schedule admin-
provider itself the rate of payment being used
istratively feasible but not less often than month-
and other cost information as may be need-
ly. A retroactive adjustment based on actual costs
ed to adjust that rate of payment to give
will be made at the end of a reporting period.
recognition to the program's principles of
(b) Amount and frequency of payment. Medicare states
reimbursement.
that providers of services will be paid the reason-
(3) It no organization is paying the provider on
able cost of services furnished to beneficiaries.
a cost or cost-related basis, the intermediary
H.166 National Association for Home Care
will obtain the previous year's financial state-
year's costs. This interim rate of payment may be
ment from the provider. By analysis of such
adjusted by the intermediary during an account-
statement in light of the principles of reim-
ing period if the provider submits appropriate
bursement, the intermediary will compute an
evidence that its actual costs are or will be sig-
appropriate rate of payment.
nificantly higher than the computed rate. Likewise,
(4) After the initial interim rate has been set, the
the intermediary may adjust the interim rate of
provider may at any time request, and be
payment if it has evidence that actual costs may
allowed, an appropriate increase in the com-
fall significantly below the computed rate.
puted rate, upon presentation of satisfactory
(f) Retroactive adjustment.
evidence to the intermediary that costs have
(1) Medicare provides that providers of services
increased. Likewise, the intermediary may
will be paid amounts determined to be due,
adjust the interim rate of payment if it has
but not less often than monthly, with neces-
evidence that actual costs may fall signifi-
sary adjustments due to previously made
cantly below the computed rate.
overpayments or underpayments. Interim
(d) Interim payments for new providers.
payments are made on the basis of estimat-
(1) Newly established providers will not have cost
ed costs. Actual costs reimbursable to a
experience on which to base a determination
provider cannot be determined until the cost
of an interim rate of payment. In such cases,
reports are filed and costs are verified.
the intermediary will use the following meth-
Therefore, a retroactive adjustment will be
ods to determine an appropriate rate:
made at the end of the reporting period to
(i) If there is a provider or providers com-
bring the interim payments made to the
parable in substantially all relevant fac-
provider during the period into agreement
tors to the provider for which the rate is
with the reimbursable amount payable to the
needed, the intermediary will base an
provider for the services furnished to pro-
interim rate of payment on the costs of
gram beneficiaries during that period.
the comparable provider.
(2) In order to reimburse the provider as quick-
(ii) If there are no substantially comparable
ly as possible, an initial retroactive adjust-
providers from whom data are available,
ment will be made as soon as the cost report
the intermediary will determine an inter-
is received. For this purpose, the costs will be
im rate of payment based on the bud-
accepted as reported, unless there are obvi-
geted or projected costs of the provider.
ous errors or inconsistencies, subject to later
(2) Under either method, the intermediary will
audit. When an audit is made and the final
review the provider's cost experience after a
liability of the program is determined, a final
period of three months. If need for an adjust-
adjustment will be made.
ment is indicated, the interim rate of payment
(3) To determine the retroactive adjustment, the
will be adjusted in line with the provider's cost
amount of the provider's total allowable cost
experience.
apportioned to the program for the reporting
(e) Interim payments after initial reporting period.
year is computed. This is the total amount of
Interim rates of payment for services provided
reimbursement the provider is due to receive
after the initial reporting period will be estab-
from the program and the beneficiaries for
lished on the basis of the cost report filed for the
covered services furnished during the report-
previous year covering Medicare services. The
ing period. The total of the interim payments
current rate will be determined - whether on a per
made by the program in the reporting year
diem or percentage of charges basis - using the
and the deductibles and coinsurance amounts
previous year's costs of covered services and mak-
receivable from beneficiaries is computed.
ing any appropriate adjustments required to bring,
The difference between the reimbursement
as closely as possible, the current year's rate of
due and the payments made is the amount
interim payment into agreement with current
of the retroactive adjustment.
CHCE Resource Manual 11.167
(g) Accelerated payments to providers. Upon request,
trol system, PIP is available for the hos-
an accelerated payment may be made to a
pital under paragraph (h)(1)(i) of this
provider of services that is not receiving period-
section for hospitals excluded from the
ic interim payments under paragraph (h) of this
prospective payment systems or under
section if the provider has experienced financial
412.116(b) of this chapter for prospective
difficulties due to a delay by the intermediary in
payment hospitals.
making payments or in exceptional situations, in
(iii) Part A SNF services.
which the provider has experienced a temporary
(iv) Part A and Part B HHA services.
delay in preparing and submitting bills to the
(v) Part A services furnished in hospitals paid
intermediary beyond its normal billing cycle. Any
under the prospective payment system,
such payment must be approved first by the inter-
including distinct part psychiatric or reha-
mediary and then by HCFA. The amount of the
bilitation units, as described in 412.116(b)
payment is computed as a percentage of the net
of this chapter.
reimbursement for unbilled or unpaid covered
(vi) Services furnished in a hospice as spec-
services. Recovery of the accelerated payment
ified in part 418 of this chapter. Payment
may be made by recoupment as provider bills are
on a PIP basis is described in 418.307 of
processed or by direct payment.
this chapter.
(h) Periodic interim payment method of reim-
(3) Any participating provider furnishing the ser-
bursement-
vices described in paragraph (h)(1) of this
(1) Covered services furnished before July 1,
section that establishes to the satisfaction of
1987. In addition to the regular methods of
the intermediary that it meets the following
interim payment on individual provider
requirements may elect to be reimbursed
billings for covered services, the periodic
under the PIP method, beginning with the
interim payment (PIP) method is available
first month after its request that the interme-
for Part A hospital and SNF inpatient services
diary finds administratively feasible:
and for both Part A and Part B HHA services.
(i) The provider's estimated total Medicare
(2) Covered services furnished on or after July 1,
reimbursement for inpatient services is
1987. Effective with claims received on or after
at least $25,000 a year computed under
July 1, 1987, the periodic interim payment
the PIP formula or, in the case of an
(PIP) method is available for the following:
HHA, either its estimated-
(i) Part A inpatient hospital services fur-
(A) Total Medicare reimbursement for
nished in hospitals that are excluded from
Part A and Part B services is at least
the prospective payment systems under
$25,000 a year computed under the
subpart B of part 412 of this chapter.
PIP formula; or
(ii) Part A services furnished in hospitals
(B) Medicare reimbursement comput-
receiving payment in accordance with a
ed under the PIP formula is at least
demonstration project authorized under
50 percent of estimated total allow-
section 402(a) of Public Law 90-248 (42
able cost.
U.S.C. 1395b-1) or section 222(a) of
(ii) The provider has filed at least one com-
Public Law 92-603 (42 U.S.C. 1395b-1
pleted Medicare cost report accepted
(note)), or a State reimbursement control
by the intermediary as providing an
system approved under section 1886(c)
accurate basis for computation of pro-
of the Act and subpart C of part 403 of
gram payment (except in the case of a
this chapter, if that type of payment is
provider requesting reimbursement
specifically approved by HCFA as an inte-
under the PIP method upon first enter-
gral part of the demonstration or control
ing the Medicare program).
system. If that type of payment is not an
(iii) The provider has the continuing capa-
integral part of the demonstration or con-
bility of maintaining in its records the
II-168 National Association for Home Care
cost, charge, and statistical data needed
presents or the intermediary otherwise obtains
to accurately complete a Medicare cost
evidence relating to the provider's costs or
report on a timely basis.
Medicare utilization that warrants such adjust-
(iv) The provider has repaid or agrees to
ment. In addition, the intermediary will recom-
repay any outstanding current financing
pute the payment immediately upon comple-
payment in full, such payment to be
tion of the desk review of a provider's cost
made before the effective date of its
report and also at regular intervals not less
requested conversion from a regular
often than quarterly. The intermediary may
interim payment method to the PIP
make a retroactive lump sum interim payment
method.
to a provider, based upon an increase in its PIP
(4) No conversion to the PIP method may be
amount, in order to bring past interim pay-
made with respect to any provider until after
ments for the provider's current cost reporting
that provider has repaid in full its outstand-
period into line with the adjusted payment
ing current financing payment.
amount. The objective of intermediary moni-
(5) The intermediary's approval of a provider's
toring of provider costs and utilization is to
request for reimbursement under the PIP
assure payments approximating, as closely as
method will be conditioned upon the inter-
possible, the reimbursement to be determined
mediary's best judgment as to whether pay-
at settlement for the cost reporting period. A
ment can be made to the provider under the
significant factor in evaluating the amount of
PIP method without undue risk of its result-
the payment in terms of the realization of the
ing in an overpayment because of greatly
projected Medicare utilization of services is
varying or substantially declining Medicare
the timely submittal to the intermediary of
utilization, inadequate billing practices, or
completed admission and billing forms. All
other circumstances. The intermediary may
providers must complete billings in detail
terminate PIP reimbursement to a provider at
under this method as under regular interim
any time it determines that the provider no
payment procedures.
longer meets the qualifying requirements or
(i) Bankruptcy or insolvency of provider. If
that the provider's experience under the PIP
on the basis of reliable evidence, the
method shows that proper payment cannot
intermediary has a valid basis for believ-
be made under this method.
ing that, with respect to a provider, pro-
(6) Payment will be made biweekly under the PIP
ceedings have been or will shortly be
method unless the provider requests a longer
instituted in a State or Federal court for
fixed interval (not to exceed one month)
purposes of determining whether such
between payments. The payment amount will
provider is insolvent or bankrupt under
be computed by the intermediary to approx-
an appropriate State or Federal law, any
imate, on the average, the cost of covered
payments to the provider will be adjust-
inpatient or home health services furnished
ed by the intermediary, notwithstanding
by the provider during the period for which
any other regulation or program instruc-
the payment is to be made, and each payment
tion regarding the timing or manner of
will be made two weeks after the end of such
such adjustments, to a level necessary to
period of services. Upon request, the inter-
insure that no overpayment to the
mediary will, if feasible, compute the provider's
provider is made.
payments to recognize significant seasonal
(j) Interest payments resulting from judicial review-
variation in Medicare utilization of services on
(1) Application. If a provider of services seeks
a quarterly basis starting with the beginning of
judicial review by a Federal court (see 405.1877
the provider's reporting year.
of this chapter) of a decision furnished
(7) A provider's PIP amount may be appropri-
by the Provider Reimbursement Review
ately adjusted at any time if the provider
Board or subsequent reversal, affirmation, or
CHCE Resource Manual 11.169
modification by the Secretary, the amount of
January 1, 1975, would be at the rate of
any award of such Federal court will be
11.625 percent per annum.
increased by interest payable by the party
[51 FR 34793, Sept. 30, 1986, as amended at 51 FR 42238, Nov. 24,
against whom the judgment is made (see
1986; 53 FR 1628, Jan. 21, 1988; 57 FR 39830, Sept. 1, 1992; 59
413.153 for treatment of interest). The inter-
FR 36713, July 19, 1994]
est is payable for the period beginning on the
first day of the first month following the 180-
413.70 Payment for services of an RPCH.
day period which began on either the date the
(a) Payment for inpatient services furnished by an
intermediary made a final determination or
RPCH.
the date the intermediary would have made
(1) Initial 12-month period of operation. Payment
a final determination had it been done on a
for the first 12month cost reporting period
timely basis (see 405.1835(b) and 405.1841(a)
for which the RPCH operates as an RPCH is
of this chapter).
made on a per diem basis for the reasonable
(2) Amount due. Section 1878(f) of the Act, 42
costs of the RPCH for inpatient services. This
U.S.C. 1395oo(f), authorizes a court to award
payment does not include physician and
interest in favor of the prevailing party on
other practitioner services paid on a charge
any amount due as a result of the court's
or fee basis, and is subject to the principles
decision. If the intermediary withheld any
of cost reimbursement in this part and in part
portion of the amount in controversy prior to
405, subpart D of this chapter; however, the
the date the provider seeks judicial review by
principle of the lesser of costs or charges in
a Federal court, and the Medicare program
413.13 does not apply.
is the prevailing party, interest is payable by
(2) Subsequent periods. Payment for a cost
the provider only on the amount not with-
reporting period subsequent to the initial 12-
held. Similarly, if the Medicare program seeks
month period for which the RPCH operates
to recover amounts previously paid to a
as an RPCH is made on the basis of adjust-
provider, and the provider is the prevailing
ing the amount determined in paragraph
party, interest on the amounts previously paid
(a)(1) of this section. The adjustment added
to a provider is not payable by the Medicare
to the per diem amount is the market basket
program since that amount had been paid
percentage increase under section
and is not due the provider.
1886(b)(3)(B)(i) of the Act for the subsequent
(3) Rate. The amount of interest to be paid is
cost reporting period applicable to hospitals
equal to the rate of return on equity capital
located in rural areas.
(see 413.157) in effect for the month in which
(3) Reduction for grants. The payment amounts
the civil action is commenced.
otherwise determined under this paragraph
Example: An intermediary made a final
(a) are reduced to the extent necessary to
determinaton on the amount of Medicare
avoid any duplication of any grant payments
program reimbursement on June 15, 1974,
made under section 1820(a)(2) of the Act or
and the provider appealed that determi-
under section 4005(e) of the Omnibus Budget
nation to the Provider Reimbursement
Reconciliation Act of 1987, Grant Program
Review Board. The Board heard the appeal
for Rural Health Care Transition, to cover the
and rendered a decision adverse to the
provision of inpatient RPCH services.
provider. On October 28, 1974, the
(b) Payment for outpatient services furnished by an
provider commenced civil action to have
RPCH.
such decision reviewed. The rate of return
(1) General. An RPCH may elect either the
on equity capital for the month of October
method in paragraph (b)(2) of this section
1974 was 11.625 percent. The period for
or the method in paragraph (b)(3) of this sec-
which interest is computed begins on
tion for payment for outpatient services. The
January 1, 1975, and the interest beginning
method of payment elected by the RPCH
II+170 National Association for Home Care
must be made in writing on an annual basis
divided by the number of outpatient
prior to the beginning of the affected cost
RPCH visits. In determining reasonable
reporting period.
costs, the principle of the lesser of costs
(2) Cost-based RPCH payment plus professional
or charges in 413.13 does not apply.
services method.
(ii) All health professionals must have a com-
(i) RPCH services. Payment under this
pensation arrangement with the RPCH.
method for outpatient RPCH services is
The health professionals' actual time is
equal to the amounts described in sec-
divided among inpatient services, out-
tion 1833(a)(2)(B) of the Act (which
patient services, and nonallowable activ-
describes amounts paid for hospital out-
ities such as research; the percentage of
patient services) and subject to the applic-
actual time applicable to outpatient ser-
able principles of cost reimbursement in
vices is applied to total compensation.
this part and in part 405, subpart D of this
The resulting amount is included with
chapter, except for the principle of the
the RPCH's outpatient facility costs for
lesser of costs or charges in 413.13. This
determination of the average cost per
payment is subject to applicable part B
outpatient RPCH visit. (No breakdown
deductible and coinsurance amounts.
is required for physician professional ser-
This payment does not include payment
vices versus technical services.)
for physician services or other profes-
(iii) A RPCH outpatient visit represents a face-
sional services paid on a charge or other
toface encounter between the patient
fee basis.
and a health professional during which
(ii) Professional services. Payment for pro-
the RPCH outpatient services are fur-
fessional medical services furnished in
nished. Encounters with more than one
an RPCH is made on a charge or other
health professional and multiple encoun-
fee basis under the provisions of this
ters with the same health professionals
chapter that would apply to payment for
which take place on the same day con-
the services if they had not been fur-
stitute a single visit, except for cases in
nished in an RPCH. For purposes of
which subsequent encounters occur on
RPCH payment, professional medical ser-
the same day for an injury or illness
vices are defined as those services pro-
requiring additional diagnosis or treat-
vided by a physician or other profes-
ment different from the injury or illness
sional (for example, a physician assis-
associated with the initial encounter.
tant, an anesthetist, and a nurse practi-
These subsequent encounters are count-
tioner) that could be billed separately to
ed as separate visits.
a carrier under Medicare.
(iv) Final reimbursement to the RPCH is based
(3) All-inclusive rate method.
on a year-end cost report, as required
(i) If the RPCH elects payment under this
under 413.20(b), that provides for the aver-
method, a combined payment including
age per visit amount methodology.
both RPCH facility services and profes-
158 FR 30670, May 26, 1993, as amended at 60 FR 45850, Sept. 1,
sional medical services is made at an all-
1995]
inclusive rate per visit. This rate is sub-
ject to applicable part B deductible and
413.74 Payment to a foreign hospital.
coinsurance amounts, as described in
(a) Principle. Section 1814(f) of the Act provides for
410.3(b) of this chapter. The all-inclusive
the payment of emergency and nonemergency
rate is an average rate based on the rea-
inpatient hospital services furnished by foreign
sonable costs of RPCH facility services
hospitals to Medicare beneficiaries. Subpart H
and professional services, as defined in
of part 424 of this chapter, together with this
the principles of cost reimbursement,
section, specify the conditions for payment.
CHCE Resource Manual 11.171
These conditions may result in payments only
customary charges for the services by submitting
to Canadian and Mexican hospitals.
an itemized bill with each claim it files in accordance
(b) Amount of payment. Effective with admissions
with its election under 424.104 of this chapter.
on or after January 1, 1980, the reasonable cost
(d) Exchange rate. Payment to the hospital will be
for services covered under the Medicare pro-
subject to the official exchange rate on the date
gram furnished to beneficiaries by a foreign hos-
the patient is discharged and to the applicable
pital will be equal to 100 percent of the hospi-
deductible and coinsurance amounts described
tal's customary charges (as defined in 413.13(b))
in 409.80 through 409.83.
for the services.
[51 FR 34793, Sept. 30, 1986, as amended at 51 FR 41351, Nov. 14,
(c) Submittal of claims. The hospital must establish its
1986; 53 FR 6648, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988]
II-172 National Association for Home Care
CFR Part 418-Hospice Care
42 CFR Part 418-Subpart A-General Provisions and Definitions
418.1 Statutory basis.
(b) Is identified by the individual, at the time he or
This part implements section 1861(dd) of the Social Security
she elects to receive hospice care, as having the
Act. Section 1861(dd) specifies services covered as hos-
most significant role in the determination and
pice care and the conditions that a hospice program must
delivery of the individual's medical care.
meet in order to participate in the Medicare program.
Bereavement counseling means counseling services pro-
The following sections of the Act are also pertinent:
vided to the individual's family after the individual's death.
(a) Sections 1812(a)(4) and (d) of the Act specify eli-
Cap period means the twelve-month period ending
gibility requirements for the individual and the
October 31 used in the application of the cap on overall
benefit periods.
hospice reimbursement specified in 418.309.
(b) Section 1813(a)(4) of the Act specifies coinsur-
Employee means an employee (defined by section 210(j)
ance amounts.
of the Act)of the hospice or, if the hospice is a subdivi-
(c) Sections 1814(a)(7) and 1814(i) of the Act contain
sion of an agency or organization, an employee of the
conditions and limitations on coverage of, and
agency or organization who is appropriately trained and
payment for, hospice care.
assigned to the hospice unit. "Employee" also refers to a
(d) Sections 1862(a)(1), (6) and (9) of the Act estab-
volunteer under the jurisdiction of the hospice.
lish limits on hospice coverage.
Hospice means a public agency or private organization or
[48 FR 56026, Dec. 16, 1983, as amended at 57 FR 36017, Aug. 12,
1992/
subdivision of either of these that - is primarily engaged
in providing care to terminally ill individuals.
418.2 Scope of part.
Physician means physician as defined in 410.20 of this
Subpart A of this part sets forth the statutory basis and
chapter.
scope and defines terms used in this part. Subpart B spec-
Representative means an individual who has been autho-
ifies the eligibility requirements and the benefit periods.
rized under State law to terminate medical care or to
Subpart C specifies conditions of participation for hos-
elect or revoke the election of hospice care on behalf
pices. Subpart D describes the covered services and spec-
of a terminally ill individual who is mentally or physi-
ifies the limits on services covered as hospice care. Subpart
cally incapacitated.
E specifies the reimbursement methods and procedures.
Social worker means a person who has at least a bache-
Subpart F specifies coinsurance amounts applicable to
lor's degree from a school accredited or approved by the
hospice care.
Council on Social Work Education.
Terminally ill means that the individual has a medical
418.3 Definitions.
prognosis that his or her life expectancy is 6 months or
For purposes of this part-
less if the illness runs its normal course.
Attending physician means a physician who-
[48 FR 56026, Dec. 16, 1983, as amended at 52 FR 4499, Feb. 12,
(a) Is a doctor of medicine or osteopathy; and
1987; 50 FR 50834, Dec. 11, 1990]
CHCE Resource Manual II*173
42 CFR Part 418-Subpart B-Eligibility,
Election, and Duration of Benefits
418.20 Eligibility requirements.
(1) For the initial 90-day period, the hospice
In order to be eligible to elect hospice care under Medicare,
must obtain written certification statements
an individual must be-
(and oral certification statements if required
(a) Entitled to Part A of Medicare; and
under paragraph (a)(3) of this section)
(b) Certified as being terminally ill in accordance with
from -
418.22.
(i) The medical director of the hospice or
the physician member of the hospice
418.21 Duration of hospice care coverage-
interdisciplinary group; and
Election periods.
(ii) The individual's attending physician if the
(a) Subject to the conditions set forth in this part, an
individual has an attending physician.
individual may elect to receive hospice care dur-
(2) For subsequent periods, the only require-
ing one or more of the following election periods:
ment is certification by one of the physicians
(1) An initial 90-day period.
listed in paragraph (c)(1)(i) of this section.
(2) A subsequent 90-day period.
(d) Maintenance of records. Hospice staff must -
(3) A subsequent 30-day period.
(1) Make an appropriate entry in the patient's
(4) A subsequent extension period of unlimited
medical record as soon as they receive an
duration during the individual's lifetime.
oral certification; and
(b) The periods of care are available in the order list-
(2) File written certifications in the medical
ed and may be elected separately at different times.
record.
155 FR 50834, Dec. 11, 1990, as amended at 36017, Aug. 12,
155 FR 50834, Dec. 11, 1990, as amended at 57FR 36017, Aug. 12,
1992/
1992]
418.22 Certification of terminal illness.
418.24 Election of hospice care.
(a) Timing of certification-
(a) Filing an election statement. An individual who
(1) General rule. The hospice must obtain writ-
meets the eligibility requirement of 418.20 may
ten certification of terminal illness for each of
file an election statement with a particular hos-
the periods listed in 418.21, even if a single
pice. If the individual is physically or mentally
election continues in effect for two, three, or
incapacitated, his or her representative (as defined
four periods, as provided in 418.24(c).
in 418.3) may file the election statement.
(2) Basic requirement. Except as provided in para-
(b) Content of election statement. The election state-
graph (a)(3)of this section, the hospice must
ment must include the following:
obtain the written certification no later than two
(1) Identification of the particular hospice that
calendar days after the period begins.
will provide care to the individual.
(3) Exception. For the initial 90-day period, if
(2) The individual's or representative's
the hospice cannot obtain the written certi-
acknowledgement
fications within two calendar days, it must
that he or she has been given a full understand-
obtain oral certifications within two calendar
ing of the palliative rather than curative nature
days, and written certifications no later than
of hospice care, as it relates to the individual's
eight calendar days after the period begins.
terminal illness.
(b) Content of certification. The certification must
(3) Acknowledgement that certain Medicare ser-
specify that the individual's prognosis is for a life
vices, as set forth in paragraph (d) of this sec-
expectancy of 6 months or less if the terminal ill-
tion, are waived by the election.
ness runs its normal course.
(4) The effective date of the election, which may
(c) Sources of certification.
be the first day of hospice care or a later date,
II.174 National Association for Home Care
but may be no earlier than the date of the
(a) An individual or representative may revoke the
election statement.
individual's election of hospice care at any time
(5) The signature of the individual or repre-
during an election period.
sentative.
(b) To revoke the election of hospice care, the indi-
(c) Duration of election. An election to receive hos-
vidual or representative must file a statement with
pice care will be considered to continue through
the hospice that includes the following information:
the initial election period and through the sub-
(1) A signed statement that the individual or rep-
sequent election periods without a break in care
resentative revokes the individual's election
as long as the individual-
for Medicare coverage of hospice care for the
(1) Remains in the care of a hospice; and
remainder of that election period.
(2) Does not revoke the election under the
(2) The date that the revocation is to be effective.
provisions of 418.28.
(An individual or representative may not des-
(d) Waiver of other benefits. For the duration of
ignate an effective date earlier than the date
an election of hospice care, an individual
that the revocation is made).
waives all rights to Medicare payments for the
(c) An individual, upon revocation of the election of
following services—
Medicare coverage of hospice care for a particu-
(1) Hospice care provided by a hospice other
lar election period-
than the hospice designated by the indi-
(1) Is no longer covered under Medicare for
vidual (unless provided under arrange-
hospice care;
ments made by the designated hospice).
(2) Resumes Medicare coverage of the benefits
(2) Any Medicare services that are related to the
treatment of the terminal condition for
waived under 418.24(e)(2); and
which hospice care was elected or a relat-
(3) May at any time elect to receive hospice cov-
ed condition or that are equivalent to hos-
erage for any other hospice election periods
pice care except for services—
that he or she is eligible to receive.
(i) Provided by the designated hospice:
(ii) Provided by another hospice under
418.30 Change of the designated hospice.
arrangements made by the designated
(a) An individual or representative may change, once
hospice; and
in each election period, the designation of the
(iii) Provided by the individual's attending
particular hospice from which hospice care will
physician if that physician is not an
be received.
employee of the designated hospice or
(b) The change of the designated hospice is not a
receiving compensation from the hos-
revocation of the election for the period in which
pice for those services.
it is made.
(e) Re-election of hospice benefits. If an election has
(c) To change the designation of hospice programs,
been revoked in accordance with 418.28, the indi-
the individual or representative must file, with
vidual (or his or her representative if the indi-
the hospice from which care has been received
vidual is mentally or physically incapacitated)
and with the newly designated hospice, a state-
may at any time file an election, in accordance
ment that includes the following information:
with this section, for any other election period
(1) The name of the hospice from which the
that is still available to the individual.
individual has received care and the name of
155 FR 50834, Dec. 11, 1990]
the hospice from which he or she plans to
receive care.
418.28 Revoking the election of hospice care.
(2) The date the change is to be effective.
CHCE Resource Manual 11.175
42 CFR Part 418-Subpart C-Conditions of Participation-
General Provisions and Administration
418.50 Condition of participation-General
Subject to the conditions of participation pertaining to
provisions.
services in 418.80 and 418.90, a hospice may arrange for
(a) Standard: Compliance. A hospice must maintain
another individual or entity to furnish services to the hos-
compliance with the conditions of this subpart
pice's patients. If services are provided under arrange-
and subparts D and E of this part.
ment, the hospice must meet the following standards:
(b) Standard: Required services. A hospice must be
(a) Standard: Continuity of care. The hospice pro-
primarily engaged in providing the care and ser-
gram assures the continuity of patient/family care
vices described in 418.202, must provide bereave-
in home, outpatient, and inpatient settings.
ment counseling and must-
(b) Standard: Written agreement. The hospice has a
(1) Make nursing services, physician services,
legally binding written agreement for the provi-
and drugs and biologicals routinely available
sion of arranged services. The agreement includes
on a 24-hour basis;
at least the following:
(2) Make all other covered services available on
(1) Identification of the services to be provided.
a 24-hour basis to the extent necessary to meet
(2) A stipulation that services may be provided
the needs of individuals for care that is rea-
only with the express authorization of the
sonable and necessary for the palliation and
hospice.
management of terminal illness and related
(3) The manner in which the contracted services
conditions; and
are coordinated, supervised, and evaluated
(3) Provide these services in a manner consistent
by the hospice.
with accepted standards of practice.
(4) The delineation of the role(s) of the hospice
(c) Standard: Disclosure of information. The hospice
and the contractor in the admission process,
must meet the disclosure of information require-
patient/family assessment, and the interdis-
ments at 420.206 of this chapter.
ciplinary group care conferences.
[48 FR 56026, Dec. 16, 1983, as amended at 55 FR 50834, Dec. 11,
(5) Requirements for documenting that ser-
1990]
vices are furnished in accordance with the
agreement.
418.52 Condition of participation-Governing body.
(6) The qualifications of the personnel providing
A hospice must have a governing body that assumes full
the services.
legal responsibility for determining, implementing and mon-
(c) Standard: Professional management responsibil-
itoring policies governing the hospice's total operation. The
ity. The hospice retains professional management
governing body must designate an individual who is respon-
responsibility for those services and ensures that
sible for the day to day management of the hospice pro-
they are furnished in a safe and effective manner
gram. The governing body must also ensure that all services
by persons meeting the qualifications of this part,
provided are consistent with accepted standards of practice.
and in accordance with the patient's plan of care
and the other requirements of this part.
418.54 Condition of participation-Medical
(d) Standard: Financial responsibility. The hospice
director.
retains responsibility for payment for services.
The medical director must be a hospice employee who
(e) Standard: Inpatient care. The hospice ensures
is a doctor of medicine or osteopathy who assumes
that inpatient care is furnished only in a facili-
overall responsibility for the medical component of
ty which meets the requirements in 418.98 and
the hospice's patient care program.
its arrangement for inpatient care is described
in a legally binding written agreement that meets
418.56 Condition of participation-Professional
the requirements of paragraph (b) and that also
management.
specifies, at a minimum-
11.176 National Association for Home Care
(1) That the hospice furnishes to the inpatient
418.62 Condition of participation-Informed
provider a copy of the patient's plan of care
consent.
and specifies the inpatient services to be
A hospice must demonstrate respect for an individual's
furnished;
rights by ensuring that an informed consent form that
(2) That the inpatient provider has established
specifies the type of care and services that may be pro-
policies consistent with those of the hospice
vided as hospice care during the course of the illness has
and agrees to abide by the patient care pro-
been obtained for every individual, either from the indi-
tocols established by the hospice for its
vidual or representative as defined in 418.3.
patients;
(3) That the medical record includes a record of
418.64 Condition of participation-Inservice
all inpatient services and events and that a
training.
copy of the discharge summary and, if
A hospice must provide an ongoing program for the
requested, a copy of the medical record are
training of its employees.
provided to the hospice;
(4) The party responsible for the implementa-
418.66 Condition of participation-Quality
tion of the provisions of the agreement; and
assurance.
(5) That the hospice retains responsibility for
A hospice must conduct an ongoing, comprehensive,
appropriate hospice care training of the
integrated, selfassessment of the quality and appro-
personnel who provide the care under the
priateness of care provided, including inpatient care,
agreement.
home care and care provided under arrangements.
[48 FR 56026, Dec. 16, 1983; 48 FR 57282, Dec. 29, 1983]
The findings are used by the hospice to correct iden-
tified problems and to revise hospice policies if nec-
418.58 Condition of participation-Plan of care.
essary. Those responsible for the quality assurance
A written plan of care must be established and maintained
program must-
for each individual admitted to a hospice program, and
(a) Implement and report on activities and mecha-
the care provided to an individual must be in accordance
nisms for monitoring the quality of patient care;
with the plan.
(b) Identify and resolve problems; and
(a) Standard: Establishment of plan. The plan must
(c) Make suggestions for improving patient care.
be established by the attending physician, the
medical director or physician designee and inter-
418.68 Condition of participation-Interdisciplinary
disciplinary group prior to providing care.
group.
(b) Standard: Review of plan. The plan must be
The hospice must designate an interdisciplinary group
reviewed and updated, at intervals specified in the
or groups composed of individuals who provide or
plan, by the attending physician, the medical direc-
supervise the care and services offered by the hospice.
tor or physician designee and interdisciplinary
(a) Standard: Composition of group. The hospice
group. These reviews must be documented.
must have an interdisciplinary group or groups
(c) Standard: Content of plan. The plan must include
that include at least the following individuals
an assessment of the individual's needs and iden-
who are employees of the hospice:
tification of the services including the management
(1) A doctor of medicine or osteopathy.
of discomfort and symptom relief. It must state in
(2) A registered nurse.
detail the scope and frequency of services need-
(3) A social worker.
ed to meet the patient's and family's needs.
(4) A pastoral or other counselor.
(b) Standard: Role of group. The interdisciplinary
418.60 Condition of participation-Continuation
group is responsible for-
of care.
(1) Participation in the establishment of the plan
A hospice may not discontinue or diminish care provid-
of care;
ed to a Medicare beneficiary because of the beneficiary's
(2) Provision or supervision of hospice care and
inability to pay for that care.
services;
CHCE Resource Manual II*177
(3) Periodic review and updating of the plan of
including the type of services and the time
care for each individual receiving hospice
worked, must be recorded.
care; and
(f) Standard: Availability of clergy. The hospice
(4) Establishment of policies governing the
must make reasonable efforts to arrange for
day-to-day provision of hospice care and
visits of clergy and other members of religious
services.
organizations in the community to patients who
(c) If a hospice has more than one interdisciplinary
request such visits and must advise patients of
group, it must designate in advance the group it
this opportunity.
chooses to execute the functions described in
paragraph (b)(4) of this section.
418.72 Condition of participation-Licensure.
(d) Standard: Coordinator. The hospice must desig-
The hospice and all hospice employees must be licensed
nate a registered nurse to coordinate the imple-
in accordance with applicable Federal, State and local
mentation of the plan of care for each patient.
laws and regulations.
(a) Standard: Licensure of program. If State or local
418.70 Condition of participation-Volunteers.
law provides for licensing of hospices, the hos-
The hospice in accordance with the numerical standards,
pice must be licensed.
specified in paragraph (e) of this section, uses volunteers,
(b) Standard: Licensure of employees. Employees
in defined roles, under the supervision of a designated
who provide services must be licensed, certified
hospice employee.
or registered in accordance with applicable
(a) Standard: Training. The hospice must provide
Federal or State laws.
appropriate orientation and training that is consis-
tent with acceptable standards of hospice practice.
418.74 Condition of participation-Central clini-
(b) Standard: Role. Volunteers must be used in admin-
cal records.
istrative or direct patient care roles.
In accordance with accepted principles of practice, the hos-
(c) Standard: Recruiting and retaining. The hospice
pice must establish and maintain a clinical record for every
must document active and ongoing efforts to
individual receiving care and services. The record must be
recruit and retain volunteers.
complete, promptly and accurately documented, readily
(d) Standard: Cost saving. The hospice must docu-
accessible and systematically organized to facilitate retrieval.
ment the cost savings achieved through the use
(a) Standard: Content. Each clinical record is a com-
of volunteers. Documentation must include-
(1) The identification of necessary positions
prehensive compilation of information. Entries are
which are occupied by volunteers;
made for all services provided. Entries are made
(2) The work time spent by volunteers occupy-
and signed by the person providing the services.
The record includes all services whether furnished
ing those positions; and
(3) Estimates of the dollar costs which the hos-
directly or under arrangements made by the hos-
pice would have incurred if paid employees
pice. Each individual's record contains-
occupied the positions identified in para-
(1) The initial and subsequent assessments;
graph (d)(1) for the amount of time specified
(2) The plan of care;
in paragraph (d)(2).
(3) Identification data;
(e) Standard: Level of activity. A hospice must doc-
(4) Consent and authorization and election
ument and maintain a volunteer staff sufficient
forms;
to provide administrative or direct patient care
(5) Pertinent medical history; and
in an amount that, at a minimum, equals 5 per-
(6) Complete documentation of all services and
cent of the total patient care hours of all
events (including evaluations, treatments,
paid hospice employees and contract staff. The
progress notes, etc.).
hospice must document a continuing level of
(b) Standard; Protection of information. The hospice
volunteer activity. Expansion of care and ser-
must safeguard the clinical record against loss,
vices achieved through the use of volunteers,
destruction and unauthorized use.
II-178 National Association for Home Care
42 CFR Part 418-Subpart D-Conditions of
Participation: Core Services
418.80 Condition of participation-Furnishing of
(2) Evidence that a hospice was operational on
core services.
or before January 1, 1983 including:
Except as permitted in 418.83, a hospice must ensure that
(i) Proof that the organization was estab-
substantially all the core services described in this subpart
lished to provide hospice services on or
are routinely provided directly by hospice employees. A
before January 1, 1983;
hospice may use contracted staff if necessary to supple-
(ii) Evidence that hospice-type services were
ment hospice employees in order to meet the needs of
furnished to patients on or before January
patients during periods of peak patient loads or under
1, 1983; and
extraordinary circumstances. If contracting is used, the
(iii) Evidence that the hospice care was a dis-
hospice must maintain professional, financial, and admin-
crete activity rather than an aspect of
istrative responsibility for the services and must assure
another type of provider's patient care
that the qualifications of staff and services provided meet
program on or before January 1, 1983.
the requirements specified in this subpart.
(3) Evidence that a hospice made a good faith
152 FR 7416, Mar. 11, 1987, as amended at 55 FR 50835, Dec. 11,
effort to hire nurses, including:
1990]
(i) Copies of advertisements in local
newspapers that demonstrate recruit-
418.82 Condition of participation-Nursing
ment efforts;
services.
(ii) Job descriptions for nurse employees;
The hospice must provide nursing care and services by
(iii) Evidence that salary and benefits are
or under the supervision of a registered nurse.
competitive for the area; and
(a) Nursing services must be directed and staffed to
(iv) Evidence of any other recruiting activ-
assure that the nursing needs of patients are met.
ities (e.g., recruiting efforts at health
(b) Patient care responsibilities of nursing personnel
fairs and contacts with nurses at other
must be specified.
providers in the area);
(c) Services must be provided in accordance with
(b) Any waiver request is deemed to be granted unless
recognized standards of practice.
it is denied within 60 days after it is received.
(c) Waivers will remain effective for one year at a time.
418.83 Nursing services-Waiver of requirement
(d) HCFA may approve a maximum of two one-
that substantially all nursing services be routine-
year extensions for each initial waiver. If a hos-
ly provided directly by a hospice.
pice wishes to receive a one-year extension, the
(a) HCFA may approve a waiver of the require-
hospice must submit a certification to HCFA,
ment in 418.80 for nursing services provided
prior to the expiration of the waiver period, that
by a hospice which is located in a non-urban-
the employment market for nurses has not
ized area. The location of a hospice that oper-
changed significantly since the time the initial
ates in several areas is considered to be the
waiver was granted.
location of its central office. The hospice must
[52 FR 7416, Mar. 11, 1987)
provide evidence that it was operational on or
before January 1, 1983, and that it made a good
418.84 Condition of participation-Medical social
faith effort to hire a sufficient number of nurs-
services.
es to provide services directly. HCFA bases its
Medical social services must be provided by a qualified
decision as to whether to approve a waiver
social worker, under the direction of a physician.
application on the following:
(1) The current Bureau of the Census designa-
418.86 Condition of participation-Physician
tions for determining non-urbanized areas.
services.
CHCE Resource Manual II*179
In addition to palliation and management of terminal ill-
qualified professional. The plan of care for these
ness and related conditions, physician employees of the
services should reflect family needs, as well as a
hospice, including the physician member(s) of the inter-
clear delineation of services to be provided and
disciplinary group, must also meet the general medical
the frequency of service delivery (up to one year
needs of the patients to the extent that these needs are
following the death of the patient). A special COV-
not met by the attending physician.
erage provision for bereavement counseling is
specified 418.204(c).
418.88 Condition of participation-Counseling
(b) Standard: Dietary counseling. Dietary counsel-
services.
ing, when required, must be provided by a
Counseling services must be available to both the indi-
vidual and the family. Counseling includes bereavement
qualified individual.
counseling, provided after the patient's death as well as
(c) Standard: Spiritual counseling. Spiritual counsel-
dietary, spiritual and any other counseling services for
ing must include notice to patients as to the avail-
the individual and family provided while the individual
ability of clergy as provided in 418.70(f).
is enrolled in the hospice.
(d) Standard: Additional counseling. Counseling may
(a) Standard: Bereavement counseling. There must
be provided by other members of the interdisci-
be an organized program for the provision of
plinary group as well as by other qualified pro-
bereavement services under the supervision of a
fessionals as determined by the hospice.
II-180 National Association for Home Care
42 CFR Part 418-Subpart E-Conditions of
Participation: Other Services
418.90 Condition of participation-Furnishing of
(b) Standard: Duties. Written instructions for patient
other services.
care are prepared by a registered nurse. Duties
A hospice must ensure that the services described in this
include, but may not be limited to, the duties
subpart are provided directly by hospice employees or
specified in 484.36(c) of this chapter.
under arrangements made by the hospice as specified
[48 FR 56026, Dec. 16, 1983, as amended at 55 FR 50835, Dec. 11,
in 418.56.
1990]
[48 FR 56026, Dec. 16, 1983, as amended at 55 FR 50835, Dec. 11,
1990]
418.96 Condition of participation-Medical sup-
plies.
418.92 Condition of participation-Physical ther-
Medical supplies and appliances including drugs and bio-
apy, occupational therapy, and speech-language
logicals, must be provided as needed for the palliation and
pathology.
management of the terminal illness and related conditions.
(a) Physical therapy services, occupational therapy
(a) Standard: Administration. All drugs and biologi-
services, and speech-language patholgy services
cals must be administered in accordance with
must be available, and when provided, offered in
accepted standards of practice.
a manner consistent with accepted standards of
(b) Standard: Controlled drugs in the patient's home.
practice.
The hospice must have a policy for the disposal
(b) (1) If the hospice engages in laboratory testing
of controlled drugs maintained in the patient's
outside of the context of assisting an indi-
home when those drugs are no longer needed by
vidual in self-administering a test with an
the patient.
appliance that has been cleared for that pur-
(c) Standard: Administration of drugs and biologi-
pose by the FDA, such testing must be in
cals. Drugs and biologicals are administered only
compliance with all applicable requirements
by the following individuals:
of part 493 of this chapter.
(1) A licensed nurse or physician.
(2) If the hospice chooses to refer specimens
(2) An employee who has completed a State-
for laboratory testing to another laborato-
approved training program in medication
ry, the referral laboratory must be certified
administration.
in the appropriate specialties and subspe-
(3) The patient if his or her attending physician
cialties of services in accordance with the
has approved.
applicable requirements of part 493 of this
(4) Any other individual in accordance with
chapter.
applicable State and local laws. The persons,
157 FR 7135, Feb. 28, 1992]
and each drug and biological they are autho-
rized to administer, must be specified in the
418.94 Condition of participation-Home health
patient's plan of care.
aide and homemaker services.
Home health aide and homemaker services must be
418.98 Condition of participation-Short term
available and adequate in frequency to meet the needs
inpatient care.
of the patients. A home health aide is a person who
Inpatient care must be available for pain control, symp-
meets the training, attitude and skill requirements spec-
tom management and respite purposes, and must be pro-
ified in 484.36 of this chapter.
vided in a participating Medicare or Medicaid facility.
(a) Standard: Supervision. A registered nurse must
(a) Standard: Inpatient care for symptom control.
visit the home site at least every two weeks when
Inpatient care for pain control and symptom
aide services are being provided, and the visit
management must be provided in one of the
must include an assessment of the aide services.
following:
CHCE Resource Manual 11.181
(1) A hospice that meets the condition of par-
(c) Standard: Health and safety laws. The hospice
ticipation for providing inpatient care direct-
must meet all Federal, State, and local laws, regu-
ly as specified in 418.100.
lations, and codes pertaining to health and safety,
(2) A hospital or an SNF that also meets the stan-
such as provisions regulating
dards specified in 418.100 (a) and (e) regard-
(1) Construction, maintenance, and equipment
ing 24-hour nursing service and patient areas.
for the hospice;
(b) Standard: Inpatient care for respite purposes.
(2) Sanitation;
Inpatient care for respite purposes must be pro-
(3) Communicable and reportable diseases; and
vided by one of the following:
(4) Post mortem procedures.
(1) A provider specified in paragraph (a) of this
(d) Standard: Fire protection.
section.
(1) Except as provided in paragraphs (d) (2) and
(2) An ICF that also meets the standards speci-
(3) of this section, the hospice must meet the
fied in 418.100 (a) and (e) regarding 24-hour
provisions of the 1985 edition of the Life
nursing service and patient areas.
Safety Code of the National Fire Protection
(c) Standard: Inpatient care limitation. The total num-
Association (which is incorporated by refer-
ber of inpatient days used by Medicare benefi-
ence) 1 that are applicable to hospices.
ciaries who elected hospice coverage in any 12-
(2) In consideration of a recommendation by the
month period preceding a certification survey in
State survey agency, HCFA may waive, for
a particular hospice may not exceed 20 percent
periods deemed appropriate, specific provi-
of the total number of hospice days for this group
sions of the Life Safety Code which, if rigid-
of beneficiaries.
ly applied would result in unreasonable hard-
(d) Standard: Exemption from limitation. Until
ship for the hospice, but only if the waiver
October 1, 1986, any hospice that began opera-
would not adversely affect the health and
tion before January 1, 1975 is not subject to the
safety of the patients.
limitation specified in paragraph (c).
(3) Any hospice that, on May 9, 1988, complies
[48 FR 56026, Dec. 16, 1983, as amended at 55 FR 50835, Dec. 11,
with the requirements of the 1981 edition of
1990]
the Life Safety Code, with or without waivers,
will be considered to be in compliance with
418.100 Condition of participation: Hospices that
this standard, as long as the hospice contin-
provide inpatient care directly.
ues to remain in compliance with that edition
A hospice that provides inpatient care directly must com-
of the Life Safety Code.
ply with all of the following standards.
(4) Any facility of two or more stories that is
(a) Standard: Twenty-four-hour nursing services.
not of fire resistive construction and is par-
(1) The facility provides 24-hour nursing services
ticipating on the basis of a waiver of con-
which are sufficient to meet total nursing needs
struction type or height, may not house
and which are in accordance with the patient
blind, nonambulatory, or physically hand-
plan of care. Each patient receives treatments,
icapped patients above the street-level
medications, and diet as prescribed, and is
floor unless the facility-
kept comfortable, clean, well-groomed, and
(i) Is one of the following construction types
protected from accident, injury, and infection.
(as defined in the Life Safety Code):
(2) Each shift must include a registered nurse
(A) Type II (1, 1, 1)-protected non-
who provides direct patient care.
combustible.
(b) Standard: Disaster preparedness. The hospice has
(B) Fully sprinklered Type II (0, 0, 0)-
an acceptable written plan, periodically rehearsed
non-combustible.
with staff, with procedures to be followed in the
(C) Fully sprinklered Type III (2, 1, 1)-
event of an internal or external disaster and for
protected ordinary.
the care of casualties (patients and personnel)
arising from such disasters.
1 See footnote to 405.1134(a) of this chapter.
II-182 National Association for Home Care
(D) Fully sprinklered Type V (1, 1, 1)-
the patients and does not adversely affect
protected wood frame; or
their health and safety.
(ii) Achieves a passing score on the Fire
(g) Standard: Bathroom facilities. The hospice must-
Safety Evaluation System (FSES).
(1) Provide an adequate supply of hot water at
(e) Standard: Patient areas. (1) The hospice must
all times for patient use; and
design and equip areas for the comfort and
(2) Have plumbing fixtures with control valves
privacy of each patient and family members.
that automatically regulate the temperature of
(2) The hospice must have-
the hot water used by patients.
(i) Physical space for private patient/
(h) Standard: Linen. The hospice has available at all
family visiting;
times a quantity of linen essential for proper care
(ii) Accommodations for family members
and comfort of patients. Linens are handled,
to remain with the patient throughout
stored, processed, and transported in such a man-
the night;
ner as to prevent the spread of infection.
(iii) Accommodations for family privacy after
(i) Standard: Isolation areas. The hospice must make
a patient's death; and
provision for isolating patients with infectious
(iv) Decor which is homelike in design and
diseases.
function.
(j) Standard: Meal service, menu planning, and super-
(3) Patients must be permitted to receive visitors
vision. The hospice must-
at any hour, including small children.
(1) Serve at least three meals or their equivalent
(f) Standard: Patient rooms and toilet facilities.
each day at regular times, with not more than
Patient rooms are designed and equipped for
14 hours between a substantial evening meal
adequate nursing care and the comfort and
and breakfast;
privacy of patients.
(2) Procure, store, prepare, distribute, and serve
(1) Each patient's room must-
all food under sanitary conditions;
(i) Be equipped with or conveniently locat-
(3) Have a staff member trained or experienced
ed near toilet and bathing facilities;
in food management or nutrition who is
(ii) Be at or above grade level;
responsible for-
(iii) Contain a suitable bed for each patient
(i) Planning menus that meet the nutrition-
and other appropriate furniture;
al needs of each patient, following the
(iv) Have closet space that provides security
orders of the patient's physician and, to
and privacy for clothing and personal
the extent medically possible, the rec-
belongings;
ommended dietary allowances of the
(v) Contain no more than four beds;
Food and Nutrition Board of the National
(vi) Measure at least 100 square feet for a
Research Council, National Academy of
single patient room or 80 square feet
Sciences (Recommended Dietary
for each patient for a multipatient
Allowances (9th ed., 1981) is available
room; and
from the Printing and Publications Office,
(vii) Be equipped with a device for calling
National Academy of Sciences,
the staff member on duty.
Washington, DC 20418); and
(2) For an existing building, HCFA may waive
(ii) Supervising the meal preparation and
the space and occupancy requirements of
service to ensure that the menu plan is
paragraphs (f)(1) (v) and (vi) of this section
followed; and
for as long as it is considered appropriate if
(4) If the hospice has patients who require med-
it finds that-
ically prescribed special diets, have the menus
(i) The requirements would result in
for those patients planned by a profession-
unreasonable hardship on the hospice
ally qualified dietitian and supervise the
if strictly enforced; and
preparation and serving of meals to ensure
(ii) The waiver serves the particular needs of
that the patient accepts the special diet.
CHCE Resource Manual #183
(k) Standard: Pharmaceutical services. The hospice
(4) Control and accountability. The pharmaceu-
provides appropriate methods and procedures
tical service has procedures for control and
for the dispensing and administering of drugs
accountability of all drugs and biologicals
and biologicals. Whether drugs and biologicals
throughout the facility. Drugs are dispensed
are obtained from community or institutional
in compliance with Federal and State laws.
pharmacists or stocked by the facility, the facil-
Records of receipt and disposition of all con-
ity is responsible for drugs and biologicals for
trolled drugs are maintained in sufficient detail
its patients, insofar as they are covered under the
to enable an accurate reconciliation. The
program and for ensuring that pharmaceutical
pharmacist determines that drug records are
services are provided in accordance with accept-
in order and that an account of all controlled
ed professional principles and appropriate
drugs is maintained and reconciled.
Federal, State, and local laws. (See 405.1124(g),
(5) Labeling of drugs and biologicals. The label-
(h), and (i) of this chapter.)
ing of drugs and biologicals is based on cur-
(1) Licensed pharmacist. The hospice must-
rently accepted professional principles, and
(i) Employ a licensed pharmacist; or
includes the appropriate accessory and cau-
(ii) Have a formal agreement with a licensed
tionary instructions, as well as the expiration
pharmacist to advise the hospice on
date when applicable.
ordering, storage, administration, dis-
(6) Storage. In accordance with State and Federal
posal, and recordkeeping of drugs and
laws, all drugs and biologicals are stored in
biologicals.
locked compartments under proper temper-
(2) Orders for medications.
ature controls and only authorized personnel
(i) A physician must order all medications
have access to the keys. Separately locked
for the patient.
compartments are provided for storage of
(ii) If the medication order is verbal-
controlled drugs listed in Schedule II of the
(A) The physician must give it only to a
Comprehensive Drug Abuse Prevention &
licensed nurse, pharmacist, or anoth-
Control Act of 1970 and other drugs subject
er physician; and
to abuse, except under single unit package
(B) The individual receiving the order
must record and sign it immediate-
drug distribution systems in which the quan-
ly and have the prescribing physi-
tity stored is minimal and a missing dose can
cian sign it in a manner consistent
be readily detected. An emergency medica-
with good medical practice.
tion kit is kept readily available.
(3) Administering medications. Medications are
(7) Drug disposal. Controlled drugs no longer
administered only by one of the following
needed by the patient are disposed of in
individuals:
compliance with State requirements. In the
(i) A licensed nurse or physician.
absence of State requirements, the pharma-
(ii) An employee who has completed a State-
cist and a registered nurse dispose of the
approved training program in medica-
drugs and prepare a record of the disposal.
tion administration.
[48 FR 56026, Dec. 16, 1983; 48 FR 57282, Dec. 29, 1983; 49 FR
(iii) The patient if his or her attending physi-
23010, June 1, 1984, as amended at 53 FR 11509, Apr. 7, 1988;
cian has approved.
55 FR 50835, Dec. 11, 1990/=
11.184 National Association for Home Care
42 CFR Part 418-Subpart F-Covered Services
418.200 Requirements for coverage.
necessary for pain control or acute or chronic
To be covered, hospice services must meet the following
symptom management.
requirements.
Inpatient care may also be furnished as a means
They must be reasonable and necessary for the palliation
of providing respite for the individual's family or
or management of the terminal illness as well as related
other persons caring for the individual at home.
conditions. The individual must elect hospice care in accor-
Respite care must be furnished as specified in
dance with 418.24 and a plan of care must be established
418.98(b). Payment for inpatient care will be
as set forth in 418.58 before services are provided. The ser-
made at the rate appropriate to the level of care
vices must be consistent with the plan of care. A certifi-
as specified in 418.302.
cation that the individual is terminally ill must be completed
(f) Medical appliances and supplies, including drugs
as set forth in 418.22.
and biologicals. Only drugs as defined in sec-
tion 1861(t) of the Act and which are used pri-
418.202 Covered services.
marily for the relief of pain and symptom con-
All services must be performed by appropriately qualified
trol related to the individual's terminal illness are
personnel, but it is the nature of the service, rather than
covered. Appliances may include covered
the qualification of the person who provides it, that deter-
durable medical equipment as described in
mines the coverage category of the service. The follow-
410.38 of this chapter as well as other self-help
ing services are covered hospice services:
and personal comfort items related to the palli-
(a) Nursing care provided by or under the supervi-
ation or management of the patient's terminal
sion of a registered nurse.
illness. Equipment is provided by the hospice
(b) Medical social services provided by a social
for use in the patient's home while he or she is
worker under the direction of a physician.
under hospice care. Medical supplies include
(c) Physicians' services performed by a physician
those that are part of the written plan of care.
as defined in 410.20 of this chapter except that
(g) Home health aide services furnished by qualified
the services of the hospice medical director or
aides as designated in 418.94 and homemaker
the physician member of the interdisciplinary
services. Home health aides may provide per-
group must be performed by a doctor of med-
sonal care services as defined in 409.45(b) of this
icine or osteopathy.
chapter. Aides may perform household services
(d) Counseling services provided to the terminally ill
to maintain a safe and sanitary environment in
individual and the family members or other per-
areas of the home used by the patient, such as
sons caring for the individual at home. Counseling,
changing bed linens or light cleaning and laun-
including dietary counseling, may be provided
dering essential to the comfort and cleanliness of
both for the purpose of training the individual's
the patient. Aide services must be provided under
family or other caregiver to provide care, and for
the general supervision of a registered nurse.
the purpose of helping the individual and those
Homemaker services may include assistance in
caring for him or her to adjust to the individual's
maintenance of a safe and healthy environment
approaching death.
and services to enable the individual to carry out
(e) Short-term inpatient care provided in a partici-
the treatment plan.
pating hospice inpatient unit, or a participating
(h) Physical therapy, occupational therapy and
hospital or SNF, that additionally meets the stan-
speech-language pathology services in addition
dards in 418.202 (a) and (e) regarding staffing and
to the services described in 409.33 (b) and (c) of
patient areas. Services provided in an inpatient
this chapter provided for purposes of symptom
setting must conform to the written plan of care.
control or to enable the patient to maintain activ-
Inpatient care may be required for procedures
ities of daily living and basic functional skills.
CHCF Resource Manual 11.185
[48 FR 56026, Dec. 16, 1983, as amended at 51 FR 41351, Nov. 14,
(b) Respite care.
1986; 55 FR 50835, Dec. 11, 1990; 59 FR 65498, Dec. 20, 1994]
(1) Respite care is short-term inpatient care pro-
vided to the individual only when necessary
418.204 Special coverage requirements.
to relieve the family members or other per-
(a) Periods of crisis. Nursing care may be covered on
sons caring for the individual.
a continuous basis for as much as 24 hours a day
(2) Respite care may be provided only on an
during periods of crisis as necessary to maintain
occasional basis and may not be reim-
an individual at home. Either homemaker or
bursed for more than five consecutive days
home health aide services or both may be cov-
at a time.
ered on a 24-hour continuous basis during peri-
ods of crisis but care during these periods must
(c) Bereavement counseling. Bereavement coun-
be predominantly nursing care. A period of cri-
seling is a required hospice service but it is not
sis is a period in which the individual requires
reimbursable.
continuous care to achieve palliation or man-
[48 FR 56026, Dec. 16, 1983, as amended at 55 FR 50835, Dec. 11,
agement of acute medical symptoms.
1990]
42 CFR Part 424-Subpart G-Payment for Hospice Care
418.301 Basic rules.
(c) The payment amounts for the categories of hos-
(a) Medicare payment for covered hospice care is
pice care are fixed payment rates that are estab-
made in accordance with the method set forth in
lished by HCFA in accordance with the proce-
418.302.
dures described in 418.306. Payment rates are
(b) Medicare reimbursement to a hospice in a cap
determined for the following categories:
period is limited to a cap amount specified in
(1) Routine home care.
418.309.
(2) Continuous home care.
[48 FR 56026, Dec. 16, 1983, as amended at 56 FR 26919, June 12,
(3) Inpatient respite care.
1991]
(4) General inpatient care.
(d) The intermediary reimburses the hospice at the
418.302 Payment procedures for hospice care.
appropriate payment amount for each day for
(a) HCFA establishes payment amounts for specific
which an eligible Medicare beneficiary is under
categories of covered hospice care.
the hospice's care.
(b) Payment amounts are determined within each of
(e) The intermediary makes payment according to the
the following categories:
following procedures:
(1) Routine home care day. A routine home care
(1) Payment is made to the hospice for each
day is a day on which an individual who has
day during which the beneficiary is eligi-
elected to receive hospice care is at home
ble and under the care of the hospice,
and is not receiving continuous care as
regardless of the amount of services fur-
defined in paragraph (b)(2) of this section.
nished on any given day.
(2) Continuous home care day. A continuous
(2) Payment is made for only one of the cate-
home care day is a day on which an indi-
gories of hospice care described in 418.302(b)
vidual who has elected to receive hospice
for any particular day.
care is not in an inpatient facility and receives
(3) On any day on which the beneficiary is not
hospice care consisting predominantly of
an inpatient, the hospice is paid the routine
nursing care on a continuous basis at home.
home care rate, unless the patient receives
Home health aide or homemaker services or
continuous care as defined in paragraph
both may also be provided on a continuous
(b)(2) of this section for a period of at least
basis. Continuous home care is only furnished
8 hours. In that case, a portion of the con-
during brief periods of crisis as described in
tinuous care day rate is paid in accordance
418.204(a) and only as necessary to maintain
with paragraph (e)(4) of this section.
the terminally ill patient at home.
(4) The hospice payment on a continuous care
(3) Inpatient respite care day. An inpatient respite
day varies depending on the number of hours
care day is a day on which the individual
of continuous services provided. The con-
who has elected hospice care receives care
tinuous home care rate is divided by 24 to
in an approved facility on a short-term basis
yield an hourly rate. The number of hours of
for respite.
continuous care provided during a continu-
(4) General inpatient care day. A general inpa-
ous home care day is then multiplied by the
tient care day is a day on which an individ-
hourly rate to yield the continuous home care
ual who has elected hospice care receives
payment for that day. A minimum of 8 hours
general inpatient care in an inpatient facility
of care must be furnished on a particular day
for pain control or acute or chronic symp-
to qualify for the continuous home care rate.
tom management which cannot be managed
(5) Subject to the limitations described in para-
in other settings.
graph (f) of this section, on any day on which
CHCE Resource Manual #187
the beneficiary is an inpatient in an approved
(5) If a hospice exceeds the number of inpatient
facility for inpatient care, the appropriate
care days described in paragraph (f)(4), the
inpatient rate (general or respite) is paid
total payment for inpatient care is determined
depending on the category of care furnished.
as follows:
The inpatient rate (general or respite) is paid
(i) Calculate the ratio of the maximum num-
for the date of admission and all subsequent
ber of allowable inpatient days to the actu-
inpatient days, except the day on which the
al number of inpatient care days furnished
patient is discharged. For the day of discharge,
by the hospice to Medicare patients.
the appropriate home care rate is paid unless
(ii) Multiply this ratio by the total reim-
the patient dies as an inpatient. In the case
bursement for inpatient care made by
where the beneficiary is discharged deceased,
the intermediary.
the inpatient rate (general or respite) is paid
(iii) Multiply the number of actual inpatient
for the discharge day. Payment for inpatient
days in excess of the limitation by the
respite care is subject to the requirement that
routine home care rate.
it may not be provided consecutively for
(iv) Add the amounts calculated in para-
more than 5 days at a time. Payment for the
graphs (f)(5)(ii) and (iii) of this section.
sixth and any subsequent day of respite care
[48 FR 56026, Dec. 16, 1983, as amended at 56 FR 26919, June 12,
is made at the routine home care rate.
1991]
(f) Payment for inpatient care is limited as follows:
(1) The total payment to the hospice for inpa-
418.304 Payment for physician services.
tient care (general or respite) is subject to a
(a) The following services performed by hospice
limitation that total inpatient care days for
physicians are included in the rates described in
Medicare patients not exceed 20 percent of
418.302:
the total days for which these patients had
(1) General supervisory services of the medical
elected hospice care.
director.
(2) At the end of a cap period, the intermediary
(2) Participation in the establishment of plans of
calculates a limitation on payment for inpatient
care, supervision of care and services, peri-
care to ensure that Medicare payment is not
odic review and updating of plans of care,
made for days of inpatient care in excess of
and establishment of governing policies by
20 percent of the total number of days of hos-
the physician member of the interdiscipli-
pice care furnished to Medicare patients.
nary group.
(3) If the number of days of inpatient care fur-
(b) For services not described in paragraph (a) of
nished to Medicare patients is equal to or less
this section, a specified Medicare contractor
than 20 percent of the total days of hospice
pays the hospice an amount equivalent to 100
care to Medicare patients, no adjustment is
percent of the physician's reasonable charge
necessary. Overall payments to a hospice are
for those physician services furnished by hos-
subject to the cap amount specified in 418.309.
pice employees or under arrangements with
(4) If the number of days of inpatient care fur-
the hospice. Reimbursement for these physician
nished to Medicare patients exceeds 20 per-
services is included in the amount subject to the
cent of the total days of hospice care to
hospice payment limit described in 418.309.
Medicare patients, the total payment for inpa-
Services furnished voluntarily by physicians are
tient care is determined in accordance with
not reimbursable.
the procedures specified in paragraph (f)(5) of
(c) Services of the patient's attending physician, if
this section. That amount is compared to actu-
he or she is not an employee of the hospice or
al payments for inpatient care, and any excess
providing services under arrangements with the
reimbursement must be refunded by the hos-
hospice, are not considered hospice services
pice. Overall payments to the hospice are sub-
and are not included in the amount subject to
ject to the cap amount specified in 418.309.
the hospice payment limit described in 418.309.
11.188
for
Home
Care
These services are paid by the carrier under the
(d) Federal Register notices. HCFA publishes as a
procedures in subparts D or E, part 405 of this
notice in the FEDERAL REGISTER any proposal
chapter.
to change the methodology for determining the
payment rates.
418.306 Determination of payment rates.
156 FR 26919, June 12, 1991, as amended at 59 FR 26960, May 25,
(a) Applicability. HCFA establishes payment rates for
1994]
each of the categories of hospice care described
in 418.302(b). The rates are established using the
418.307 Periodic interim payments.
methodology described in section 1814(i)(1)(C)
Subject to the provisions of 413.64(h) of this chapter, a hos-
of the Act.
pice may elect to receive periodic interim payments (PIP)
(b) Payment rates. The payment rates for routine
effective with claims received on or after July 1, 1987.
home care and other services included in hospice
Payment is made biweekly under the PIP method unless
care are as follows:
the hospice requests a longer fixed interval (not to exceed
(1) The following rates, which are 120 percent of the
one month) between payments. The biweekly interim
rates in effect on September 30, 1989, are effec-
payment amount is based on the total estimated Medicare
tive January 1, 1990 through September 30, 1990
payments for the reporting period (as described in 418.302-
and October 21, 1990 through December 31, 1990:
418.306). Each payment is made 2 weeks after the end of
Routine home care
$75.80
a biweekly period of service as described in 413.64(h)(5)
Continuous home care:
of this chapter. Under certain circumstances that are
Full rate for 24 hours
442.40
described in 413.64(g) of this chapter, a hospice that is not
Hourly rate
18.43
receiving PIP may request an accelerated payment.
Inpatient respite care
78.40
159 FR 36713, July 19, 1994]
General inpatient care
37.20
(2) Except for the period beginning October 21, 1990,
418.308 Limitation on the amount of hospice
through December 31, 1990, the payment rates for
payments.
routine home care and other services included in
(a) Except as specified in paragraph (b) of this sec-
hospice care for Federal fiscal years 1991, 1992, and
tion, the total Medicare payment to a hospice for
1993 and those that begin on or after October 1,
care furnished during a cap period is limited by
1997, are the payment rates in effect under this
the hospice cap amount specified in 418.309.
paragraph during the previous fiscal year increased
(b) Until October 1, 1986, payment to a hospice that
by the market basket percentage increase as
began operation before January 1, 1975 is not
defined in section 1886(b)(3)(B)(iii) of the Act, oth-
limited by the amount of the hospice cap speci-
erwise applicable to discharges occurring in the fis-
fied in 418.309.
cal year. The payment rates for the period begin-
(c) The intermediary notifies the hospice of the deter-
ning October 21, 1990, through December 31,
mination of program reimbursement at the end of
1990, are the same as those shown in paragraph
the cap year in accordance with procedures sim-
(b)(1) of this section.
ilar to those described in 405.1803 of this chapter.
(3) For Federal fiscal years 1994 through 1997, the
(d) Payments made to a hospice during a cap peri-
payment rate is the payment rate in effect during
od that exceed the cap amount are overpayments
the previous fiscal year increased by a factor equal
and must be refunded.
to the market basket percentage increase minus-
[48 FR 56026, Dec. 16, 1983; 48 FR 57282, Dec. 29, 1983]
(i) 2 percentage points in FY 1994;
(ii) 1.5 percentage points in FYs 1995 and
418.309 Hospice cap amount.
1996; and
The hospice cap amount is calculated using the fol-
(iii) 0.5 percentage points in FY 1997.
lowing procedures:
(c) Adjustment by intermediary. The payment rates
(a) The cap amount is $6,500 per year and is adjust-
established by HCFA are adjusted by the inter-
ed for inflation or deflation for cap years that end
mediary to reflect local differences in wages.
after October 1, 1984, by using the percentage
CHCE Resource Monual 11.189
change in the medical care expenditure catego-
(2) In the case in which a beneficiary has elect-
ry of the Consumer Price Index (CPI) for urban
ed to receive care from more than one hos-
consumers that is published by the Bureau of
pice, each hospice includes in its number of
Labor Statistics. This adjustment is made using
Medicare beneficiaries only that fraction
the change in the CPI from March 1984 to the fifth
which represents the portion of a patient's
month of the cap year. The cap year runs from
total stay in all hospices that was spent in
November 1 of each year until October 31 of the
that hospice. (The hospice can obtain this
following year.
information by contacting the intermediary.)
(b) Each hospice's cap amount is calculated by the
418.310 Reporting and recordkeeping requirements.
intermediary by multiplying the adjusted cap
Hospices must provide reports and keep records as the
amount determined in paragraph (a) of this sec-
Secretary determines necessary to administer the program.
tion by the number of Medicare beneficiaries who
elected to receive hospice care from that hospice
418.311 Administrative appeals.
during the cap period. For purposes of this calcu-
A hospice that believes its payments have not been prop-
lation, the number of Medicare beneficiaries
erly determined in accordance with these regulations
includes—
may request a review from the intermediary or the
(1) Those Medicare beneficiaries who have not
Provider Reimbursement Review Board (PRRB) if the
previously been included in the calculation
amount in controversy is at least $1,000 or $10,000,
of any hospice cap and who have filed an
respectively. In such a case, the procedure in 42 CFR part
election to receive hospice care, in accor-
405, subpart R, will be followed to the extent that it is
dance with 418.24, from the hospice during
applicable. The PRRB, subject to review by the Secretary
the period beginning on September 28 (35
under 405.1874 of this chapter, shall have the authority
days before the beginning of the cap period)
to determine the issues raised. The methods and stan-
and ending on September 27 (35 days before
dards for the calculation of the payment rates by HCFA
the end of the cap period).
are not subject to appeal.
II.190 National Association for Home Care
42 CFR Part 418-Subpart H-Coinsurance
418.400 Individual liability for coinsurance for
in accordance with 418.24 is in effect for
hospice care.
the beneficiary; and
An individual who has filed an election for hospice care
(ii) Ends with the close of the first period
in accordance with 418.24 is liable for the following coin-
of 14 consecutive days on each of
surance payments.
which an election is not in effect for
Hospices may charge individuals the applicable coinsur-
the beneficiary.
ance amounts.
(a) Drugs and biologicals. An individual is liable for
418.402 Individual liability for services that are
a coinsurance payment for each palliative drug
not considered hospice care.
and biological prescription furnished by the
Medicare payment to the hospice discharges an individ-
hospice while the individual is not an inpa-
ual's liability for payment for all services, other than the
tient. The amount of coinsurance for each pre-
hospice coinsurance amounts described in 418.400, that
scription approximates 5 percent of the cost of
are considered covered hospice care (as described in
the drug or biological to the hospice deter-
418.202). The individual is liable for the Medicare deductibles
mined in accordance with the drug copayment
and coinsurance payments and for the difference between
schedule established by the hospice, except
the reasonable and actual charge on unassigned claims on
that the amount of coinsurance for each pre-
other covered services that are not considered hospice care.
scription may not exceed $5. The cost of the
Examples of services not considered hospice care include:
drug or biological may not exceed what a pru-
Services furnished before or after a hospice election peri-
dent buyer would pay in similar circumstances.
od; services of the individual's attending physician, if the
The drug copayment schedule must be
attending physician is not an employee of or working under
reviewed for reasonableness and approved by
an arrangement with the hospice; or Medicare services
the intermediary before it is used.
received for the treatment of an illness or injury not relat-
(b) Respite care.
ed to the individual's terminal condition.
(1) The amount of coinsurance for each respite
care day is equal to 5 percent of the payment
418.405 Effect of coinsurance liability on Medicare
made by HCFA for a respite care day.
payment.
(2) The amount of the individual's coinsurance
The Medicare payment rates established by HCFA in accor-
liability for respite care during a hospice coin-
dance with 418.306 are not reduced when the individual
surance period may not exceed the inpatient
is liable for coinsurance payments. Instead, when estab-
hospital deductible applicable for the year in
lishing the payment rates, HCFA offsets the estimated cost
which the hospice coinsurance period began.
of services by an estimate of average coinsurance amounts
(3) The individual hospice coinsurance period-
hospices collect.
(i) Begins on the first day an election filed
156 FR 26919, June 12, 1991]
CHCE Resource Manual 11.191
CFR Part 420-Program Integrity: Medicare
42 CFR Part 420-Subpart C-Disclosure of
Ownership and Control Information
420.200 Purpose.
(1) An entity (other than an individual practi-
This subpart implements sections 1124, 1124A, 1126,
tioner or group of practitioners) that fur-
and 1861(v)(1)(i) of the Social Security Act. It sets forth
nishes, or arranges for the furnishing of,
requirements for providers, Part B suppliers, intermedi-
items or services for which payment may
aries, and carriers to disclose ownership and control
be claimed by the entity under any plan or
information and the identities of managing employees.
program established under title V of the
It also sets forth requirements for disclosure of infor-
Social Security Act or under an approved
mation about a provider's or Part B supplier's owners,
State Medicaid plan;
those with a controlling interest, or managing employ-
(2) An entity (other than an individual practi-
ees convicted of criminal offenses against Medicare,
tioner or group of practitioners) that furnishes,
Medicaid, or the title V (Maternal and Child Health
or arranges for the furnishing of, health-relat-
Services) and title XX (Social Services) programs.
ed services for which payment may be
157 FR 27306, June 18, 1992, as amended at 60 FR 50442, Sept. 29,
claimed by the entity under an approved
1995)
State plan and services program under title
XX of the Act; or
420.201 Definitions.
(3) A Medicaid fiscal agent.
As used in this subpart unless the context indicates
Group of practitioners means two or more health
otherwise:
care practitioners who practice their profession
Agent means any person who has been delegated
at a common location (whether or not they share
the authority to obligate or act on behalf of a
common facilities, common supporting staff, or
provider.
common equipment).
Disclosing entity means:
Indirect ownership interest means any ownership
(1) A provider of services, an independent clin-
interest in an entity that has an ownership inter-
ical laboratory, a renal disease facility, a rural
est in the disclosing entity. The term includes an
health clinic, a Federally qualified health
ownership interest in any entity that has an indi-
center, or a health maintenance organiza-
rect ownership interest in the disclosing entity.
tion (as defined in section 1301(a) of the
Managing employee means a general manager, busi-
Public Health Service Act);
ness manager, administrator, director, or other
(2) A carrier or other agency or organization
individual who exercises operational or man-
that is acting for one or more providers of
agerial control over, or who directly or indi-
services for purposes of part A and part B
rectly conducts, the day-to-day operation of the
of Medicare; and
institution, organization, or agency.
(3) A part B supplier, as defined in 400.202 of
Ownership interest means the possession of equity
this chapter.
in the capital, the stock, or the profits of the dis-
Other disclosing entity means any other Medicare dis-
closing entity.
closing entity and any entity that does not par-
Person with an ownership or control interest means
ticipate in Medicare, but is required to disclose
a person or corporation that-
certain ownership and control information
(1) Has an ownership interest totaling 5 percent
because of participation in any of the programs
or more in a disclosing entity;
established under title V, XIX, or XX of the Act.
(2) Has an indirect ownership interest equal to
This includes:
5 percent or more in a disclosing entity;
II-192 National Association for Home Care
(3) Has a combination of direct and indirect own-
that owns 5 percent of the stock of the disclos-
ership interests equal to 5 percent or more in
ing entity, B's interest equates to a 4 percent indi-
a disclosing entity;
rect ownership interest in the disclosing entity
(4) Owns an interest of 5 percent or more in
and need not be reported.
any mortgage, deed of trust, note, or other
(b) Person with an ownership or control interest.
obligation secured by the disclosing enti-
In order to determine the percentage of owner-
ty if that interest equals at least 5 percent
ship interest in any mortgage, deed of trust, note,
of the value of the property or assets of the
or other obligation, the percentage of interest
disclosing entity;
owned in obligation is multiplied by the per-
(5) Is an officer or director of a disclosing entity
centage of the disclosing entity's assets used to
that is organized as a corporation; or
secure the obligation. For example, if A owns 10
(6) Is a partner in a disclosing entity that is orga-
percent of a note secured by 60 percent of the
nized as a partnership.
provider's assets, A's interest in the provider's
Significant business transaction means any busi-
assets equates to 6 percent and must be report-
ness transaction or series of transactions dur-
ed. Conversely, if B owns 40 percent of a note
ing any one fiscal year, the total of which
secured by 10 percent of the provider's assets,
exceeds the lesser of $25,000 and 5 percent of
B's interest in the provider's assets equates to 4
the total operating expenses of the provider.
percent and need not be reported.
Subcontractor means-
(1) An individual, agency, or organization to
420.203 Disclosure of hiring of intermediary's for-
which a disclosing entity has contracted or
mer employees.
delegated some of its management functions
A provider must notify the Secretary promptly if it, or its
or responsibilities of providing medical care
home office (in the case of a chain organization), employs
to its patients; or
or obtains the services of an individual who, at any time
(2) An individual, agency, or organization with
during the year preceding such employment, was employed
which an intermediary or carrier has entered
in a managerial, accounting, auditing, or similar capacity by
into a contract, agreement, purchase order
an agency or organization which currently serves, or at any
or lease (or leases of real property) to obtain
time during the preceding year, served as a Medicare fiscal
space, supplies, equipment, or services pro-
intermediary or carrier for the provider. Similar capacity
vided under the Medicare agreement.
means the performance of essentially the same work func-
Wholly owned supplier means a supplier whose total
tions as those of a manager, accountant, or auditor even
ownership interest is held by a provider or by a
though the individual is not so designated by title.
person, persons, or other entity with an owner-
ship or control interest in a provider.
420.204 Principals convicted of a program-related
(44 FR 41642, July 17, 1979, as amended at 57 FR 24982, June 12,
crime.
1992; 57 FR 27306, June 18, 1992; 57 FR 35760, Aug. 11, 1992]
(a) Information required. Prior to HCFA's acceptance
of a provider agreement or issuance or reissuance
420.202 Determination of ownership or control
of a supplier billing number, or at any time upon
percentages.
written request by HCFA, the provider or part B
(a) Indirect ownership interest. The amount of indi-
supplier must furnish HCFA with the identity of
rect ownership interest is determined by multi-
any person who:
plying the percentages of ownership in each enti-
(1) Has an ownership or control interest in the
ty. For example, if A owns 10 percent of the stock
provider or part B supplier;
in a corporation that owns 80 percent of the dis-
(2) Is an agent or managing employee of the
closing entity, A's interest equates to an 8 per-
provider or part B supplier; or
cent indirect ownership interest in the disclosing
(3) Is a person identified in paragraph (a)(1) or
entity and must be reported. Conversely, if B
(a)(2) of this section and has been convict-
owns 80 percent of the stock of a corporation
ed of, or was an owner of, had a controlling
CHCE Resource Manual 11.193
interest in, or was a managing employee of
(b) Any significant business transactions between the
a corporation that has been convicted of a
provider or part B supplier and any wholly owned
criminal offense, subjected to any civil mon-
supplier or between the provider or part B sup-
etary penalty, or excluded from the programs
plier and any subcontractor, during the 5 year
for any activities related to involvement in
period ending on the date of the request;
the Medicare, Medicaid, title V or title XX
(c) The names of managing employees of the sub-
social services program, since the inception
contractors;
of those programs.
(d) The identity of any other entities to which pay-
(b) Refusal to enter into or renew agreement or to
ment may be made by Medicare, which a person
issue or reissue billing numbers. HCFA may
with an ownership or control interest or a man-
refuse to enter into or renew an agreement
aging employee in the subcontractor has or has
with a provider of services, or to issue or reis-
had an ownership or control interest in the 3-
sue a billing number to a part B supplier, if any
year period preceding disclosure; and
person who has an ownership or control inter-
(e) Any penalties, assessments, or exclusions under
est in the provider or supplier, or who is an
sections 1128, 1128A and 1128B of the Act
agent or managing employee, has been con-
incurred by the subcontractor, its owners, man-
victed of a criminal offense or subjected to any
aging employees or those with a controlling inter-
civil penalty or sanction related to the involve-
est in the subcontract.
ment of that person in Medicare, Medicaid, title
157 FR 27306, June 18, 1992]
V or title XX social services programs. In mak-
ing this decision, HCFA considers the facts and
420.206 Disclosure of persons having ownership,
circumstances of the specific case, including
financial, or control interest.
the nature and severity of the crime, penalty or
(a) Information that must be disclosed. A disclosing
sanction and the extent to which it adversely
entity must submit the following information in the
affected beneficiaries and the programs
manner specified in paragraph (b) of this section:
involved. HCFA also considers whether it has
(1) The name and address of each person with
been given reasonable assurance that the per-
an ownership or control interest in the enti-
son will not commit any further criminal or
ty or in any subcontractor in which the enti-
civil offense against the programs.
ty has direct or indirect ownership interest
(c) Notification of Inspector General. HCFA prompt-
totaling 5 percent or more. In the case of a
ly notifies the Inspector General of the
part B supplier that is a joint venture, own-
Department of the receipt of any application or
ership of 5 percent or more of any compa-
request for participation, certification, re-
ny participating in the joint venture should
certification, or for a billing number that identi-
be reported. Any physician who has been
fies any person described in paragraph (a)(3) of
issued a Unique Physician Identification
this section and the action taken on that appli-
Number by the Medicare program must pro-
cation or request.
vide this number.
157 FR 27306, June 18, 1992]
(2) Whether any of the persons named, in com-
pliance with paragraph (a)(1) of this section,
420.205 Disclosure by providers and part B sup-
is related to another as spouse, parent, child,
pliers of business transaction information.
or sibling.
A provider or part B supplier must submit to HCFA,
(3) The name of any other disclosing entity in
within 35 days after the date of a written request, full
which any person with an ownership or con-
and complete information on-
trol interest, or who is a managing employ-
(a) The ownership of a subcontractor with which
ee in the reporting disclosing entity, has, or
the provider or part B supplier has had, during
has had in the previous three-year period,
the previous 12 months, business transactions in
an ownership or control interest or position
an aggregate amount in excess of $25,000;
as managing employee, and the nature of
11.194 National Association for Home Care
the relationship with the other disclosing enti-
tification, or re-enrollment, or contract
ty. If any of these other disclosing entities has
renewals, within 35 days of a written request.
been convicted of a criminal offense or
In the case of a part B supplier, the supplier
received a civil monetary or other adminis-
must report also within 35 days, on its own
trative sanction related to participation in
Medicare, Medicaid, title V (Maternal and
initiative, any changes in the information it
Child Health) or title XX (Social Services) pro-
previously supplied.
grams, such as penalties assessments and
(c) Consequences of failure to disclose.
exclusions under sections 1128, 1128A or
(1) HCFA does not approve an agreement or
1128B of the Act, the disclosing entity must
contract with, or make a determination of eli-
also provide that information.
gibility for, or (in the case of a part B suppli-
(b) Time and manner of disclosure.
er) issue or reissue a billing number to, any
(1) Any disclosing entity that is subject to peri-
disclosing entity that fails to comply with
odic survey and certification of its compli-
paragraph (b) of this section.
ance with Medicare standards must supply the
information specified in paragraph (a) of this
(2) HCFA terminates any existing agreement or
section to the State survey agency at the time
contract with, or withdraws a determination
it is surveyed. The survey agency will prompt-
of eligibility for or (in the case of a part B sup-
ly furnish the information to the Secretary.
plier) revokes the billing number of, any dis-
(2) Any disclosing entity that is not subject to
closing entity that fails to comply with para-
periodic survey and certification must supply
graph (b) of this section.
the information specified in paragraph (a) of
(d) Public disclosure. Information furnished to
this section to HCFA before entering into a
contract or agreement with Medicare or
the Secretary under the provisions of this sec-
before being issued or reissued a billing num-
tion shall be subject to public disclosure as
ber as a part B supplier.
specified in 20 CFR part 422.
(3) A disclosing entity must furnish updated infor-
[44 FR 41642, July 17, 1979, as amended at 57 FR 27306, June 18,
mation to HCFA at intervals between recer-
1992]
CHCE Resource Manual 11.195
CFR Part 424-Conditions for
Medicare Payment
42 CFR Part 424-Subpart A-General Provisions
424.1 Basis and scope.
Federally qualified health center (FQHC) services,
(a) Statutory basis.
or ambulatory surgical center (ASC) services.
(1) This part is based on the indicated provisions
Those conditions are set forth in part 405, sub-
of the following sections of the Act:
part X, and part 481 subpart A of this chapter for
1814-Basic conditions for, and limitations
RHC and FQHC services; and in part 416 of this
on, Medicare payments for Part A services.
chapter, for ASC services. The rules for physician
1815-Payment to providers for Part A
certification of terminal illness, required in con-
services.
nection with hospice care, are set forth in 418.22
1835-Procedures for payment to providers
of this chapter.
for Part B services. 1842(b)(3)(B)(ii)-
153 FR 6634, Mar. 2, 1988, as amended at 60 FR 38271, July 26,
Assignment of Part B Medicare claims.
1995; 60 FR 50442, Sept. 29, 1995]
1842(b)(6)-Payment to entities other than
the supplier.
424.3 Definitions.
1848-Payment for physician services.
As used in this part, unless the context indicates other-
1870(e) and (f)-Settlement of claims after
wise-ICD-9-CM means International Classification of
death of the beneficiary.
Diseases, Ninth Revision, Clinical Modification.
(2) Section 424.444(c) is also based on section
Nonparticipating hospital means a hospital that does not
216(j) of the Act.
have in effect a provider agreement to participate in
(b) Scope. This part sets forth certain specific condi-
Medicare.
tions and limitations applicable to Medicare pay-
Participating hospital means a hospital that has in effect
ments and cites other conditions and limitations
a provider agreement to participate in Medicare.
set forth elsewhere in this chapter. This subpart
153 FR 6634, Mar. 2, 1988, as amended at 59 FR 10299, Mar. 4,
A provides a general overview. Other subparts
1994]
deal specifically with-
(1) The requirement that the need for services be
424.5 Basic conditions.
certified and that a physician establish a plan
(a) As a basis for Medicare payment, the following
of treatment (subpart B);
conditions must be met:
(2) The procedures and time limits for filing
(1) Types of services. The services must be-
claims (subpart C);
(i) Covered services, as specified in part 409
(3) The individuals or entities to whom payment
or part 410 of this chapter; or
may be made (subparts D and E);
(ii) Services excluded from coverage as cus-
(4) The limitations on assignment and reassign-
todial care or services not reasonable and
ment of claims (subpart F);
necessary, but reimbursable in accordance
(5) Special requirements that apply to services
with 405.332 through 405.334 of this chap-
furnished by nonparticipating U.S. hospitals
ter, pertaining to limitation of liability.
and foreign hospitals (subparts G and H); and
(2) Sources of services. The services must have
(6) The replacement and reclamation of Medicare
been furnished by a provider, nonparticipat-
payment checks (subpart M).
ing hospital, or supplier that was, at the time
(c) Other applicable rules. Except for 424.40(c)(3),
it furnished the services, qualified to have
this part does not deal with the conditions for
payment made for them.
payment of rural health clinic (RHC) services,
(3) Recipient of services. Except as provided in
11.196 National Association for Home Care
409.68 of this chapter, the services must have
When a PRO or a UR committee notifies a hospi-
been furnished while the individual was eli-
tal or SNF of its finding that further services are not
gible to have payment made for them.
medically necessary, the following rules apply:
(Section 409.68 provides for payment of inpa-
(1) Hospitals subject to PPS. Payment may not
tient hospital services furnished before the
be made for inpatient hospital services fur-
hospital is notified that the beneficiary has
nished by a PPS hospital after the second day
exhausted the Medicare benefits available for
after the day on which the hospital received
the current benefit period.)
the notice.
(4) Certification of need for services. When
(2) Hospitals not subject to PPS and SNFs—
required, the provider must obtain certifica-
(i) Basic rule. Except as provided in para-
tion and recertification of the need for the ser-
graph (a)(2)(ii) of this section, payment
vices in accordance with subpart B of this part.
may not be made for inpatient hospital
(5) Claim for payment. The provider, supplier,
services or posthospital SNF care fur-
or beneficiary, as appropriate, must file a
nished after the day on which the hos-
claim that includes or makes reference to a
pital or SNF received the notice.
request for payment, in accordance with sub-
(ii) Exception. Payment may be made for 1
part C of this part.
(6) Sufficient information. The provider, suppli-
or 2 additional days if the PRO or UR
er, or beneficiary, as appropriate, must furnish
committee approves them as necessary
to the intermediary or carrier sufficient infor-
for planning for post-discharge care.
mation to determine whether payment is due
(b) Failure to make timely utilization review. Payment
and the amount of payment.
may not be made for inpatient hospital services
(b) Additional conditions applicable in certain cir-
or posthospital SNF care furnished, after the 20th
cumstances or to certain services are set forth in
consecutive day of a stay, to an individual who
other sections of this part.
is admitted to the hospital or SNF after HCFA has
153 FR 6635, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988; 60 FR
determined that the hospital or SNF has failed to
38271, July 26, 1995)
make timely utilization review in long stay cases.
(This provision does not apply to a hospital or SNF
424.7 General limitations.
for which a PRO has assumed binding review.)
(a) Utilization review finding on medical necessity.
153 FR 6635, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988]
CHCE Resource Manual II.197
42 CFR Part 424-Subpart B-Certification and
Plan of Treatment Requirements
424.10 Purpose and scope.
information is contained in other provider records,
(a) Purpose. The physician has a major role in deter-
such as physicians' progress notes, it need not be
mining utilization of health services furnished by
repeated. It will suffice for the statement to indi-
providers. The physician decides upon admis-
cate where the information is to be found.
sions, orders tests, drugs, and treatments, and
(d) Timeliness.
determines the length of stay. Accordingly, sec-
(1) The succeeding sections of this subpart also
tions 1814(a)(2) and 1835(a)(2) of the Act estab-
specify the time frames for certifications and
lish as a condition for Medicare payment that a
for initial and subsequent recertifications.
physician certify the necessity of the services and,
(2) A hospital or SNF may provide for obtaining
in some instances, recertify the continued need
a certification or recertification earlier than
for those services. Section 1814(a)(2) of the Act
required by these regulations, or vary the time
also permits nurse practitioners or clinical nurse
frame (within the prescribed outer limits) for
specialists to certify and recertify the need for
different diagnostic or clinical categories.
post-hospital extended care services.
(3) Delayed certification and recertification state-
(b) Scope. This subpart sets forth the timing, con-
ments are acceptable when there is a legiti-
tent, and signature requirements for certification
mate reason for delay. (For instance, the
and recertification with respect to certain Medicare
patient was unaware of his or her entitle-
services furnished by providers.
ment when he or she was treated.) Delayed
160 FR 38271, July 26, 1995]
certification and recertification statements
must include an explanation of the reason for
424.11 General procedures.
the delay.
(a) Responsibility of the provider. The provider
(4) A delayed certification may be included
must-
with one or more recertifications on a sin-
(1) Obtain the required certification and recerti-
gle signed statement.
fication statements;
(e) Limitation on authorization to sign statements. A
(2) Keep them on file for verification by the inter-
certification or recertification statement may be
mediary, if necessary; and
signed only by one of the following:
(3) Certify, on the appropriate billing form, that
(1) A physician who is a doctor of medicine or
the statements have been obtained and are
osteopathy.
on file.
(2) A dentist in the circumstances specified in
(b) Obtaining the certification and recertification state-
424.13(c).
ments. No specific procedures or forms are
(3) A doctor of podiatric medicine if his or her
required for certification and recertification state-
certification is consistent with the functions
ments. The provider may adopt any method that
he or she is authorized to perform under
permits verification. The certification and recer-
State law.
tification statements may be entered on forms,
(4) A nurse practitioner or clinical nurse spe-
notes, or records that the appropriate individual
cialist, as defined in paragraph (e)(5) or (e)(6)
signs, or on a special separate form. Except as pro-
of this section, in the circumstances speci-
vided in paragraph (d) of this section for delayed
fied in 424.20(e).
certifications, there must be a separate signed
(5) For purposes of this section, to qualify as a
statement for each certification or recertification.
nurse practitioner, an individual must-
(c) Required information. The succeeding sections
(i) Be a registered professional nurse who
of this subpart set forth specific information
is currently licensed to practice nursing
required for different types of services. If that
in the State where he or she practices;
II-198 National Association for Home Care
be authorized to perform the services
vices of hospitals other than psychiatric hospi-
of a nurse practitioner in accordance
tals only if a physician certifies and recertifies
with State law; and have a master's
the following:
degree in nursing;
(1) The reasons for either-
(ii) Be certified as a nurse practitioner by a
(i) Continued hospitalization of the patient
professional association recognized by
for medical treatment or medically
HCFA that has, at a minimum, eligibility
required inpatient diagnostic study; or
requirements that meet the standards in
(ii) Special or unusual services for cost out-
paragraph (e)(5)(i) of this section; or
lier cases (under the prospective pay-
(iii) Meet the requirements for a nurse prac-
ment system set forth in subpart F of part
titioner set forth in paragraph (e)(5)(i) of
412 of this chapter).
this section, except for the master's
(2) The estimated time the patient will need to
degree requirement, and have received
remain in the hospital.
before August 25, 1998 a certificate of
(3) The plans for posthospital care, if appropriate.
completion from a formal advanced prac-
(b) Certification of need for hospitalization when a
tice program that prepares registered
SNF bed is not available.
nurses to perform an expanded role in
(1) A physician may certify or recertify need for
the delivery of primary care.
continued hospitalization if the physician
(6) For purposes of this section, to qualify as a
finds that the patient could receive proper
clinical nurse specialist, an individual must-
treatment in a SNF but no bed is available in
(i) Be a registered professional nurse who is
a participating SNF.
currently licensed to practice nursing in
(2) If this is the basis for the physician's certifi-
the State where he or she practices; be
cation or recertification, the required state-
authorized to perform the services of a
ment must so indicate; and the physician is
clinical nurse specialist in accordance with
expected to continue efforts to place the
State law; and have a master's degree in
patient in a participating SNF as soon as a
a defined clinical area of nursing;
bed becomes available.
(ii) Be certified as a clinical nurse specialist
(c) Signatures.
by a professional association recognized
(1) Basic rule. Except as specified in paragraph
by HCFA that has at a minimum, eligibility
(c)(2) of this section, certifications and recer-
requirements that meet the standards in
tifications must be signed by the physician
paragraph (e)(6)(i) of this section; or
responsible for the case, or by another physi-
(iii) Meet the requirements for a clinical nurse
cian who has knowledge of the case and who
specialist set forth in paragraph (e)(6)(i)
is authorized to do so by the responsible
of this section, except for the master's
physician or by the hospital's medical staff.
degree requirement, and have received
(2) Exception. If the intermediary requests certi-
before August 25, 1998 a certificate of
fication of the need to admit a patient in con-
completion from a formal advanced prac-
nection with dental procedures, because his
tice program that prepares registered nurs-
or her underlying medical condition and clin-
es to perform an expanded role in the
ical status or the severity of the dental pro-
delivery of primary care.
cedures require hospitalization, that certifi-
153 FR 6634, Mar. 2, 1988, as amended at 56 FR 8845, Mar. 1,
cation may be signed by the dentist caring for
1991; 60 FR 38272, July 26, 1995/
the patient.
(d) Timing of certifications and recertifications: Cases
424.13 Requirements for inpatient services of hos-
not subject to the prospective payment system
pitals other than psychiatric hospitals.
(PPS).
(a) Content of certification and recertification.
(1) For cases that are not subject to PPS, certifi-
Medicare Part A pays for inpatient hospital ser-
cation is required no later than as of the 12th
CHCE Resource Manual 11.199
day of hospitalization. A hospital may, at its
no later than the 30th day following such
option, provide for the certification to be
review; if review by the UR committee took
made earlier, or it may vary the timing of the
the place of this physician recertification, the
certification within the 12-day period by diag-
review could be performed as late as the sev-
nostic or clinical categories.
enth day following the 30th day.
(2) The first recertification is required no later
(g) Description of procedures. The hospital must have
than as of the 18th day of hospitalization.
available on file a written description that speci-
(3) Subsequent recertifications are required at
fies the time schedule for certifications and recer-
intervals established by the UR committee
tifications, and indicates whether utilization review
(on a case-by-case basis if it so chooses), but
of long-stay cases fulfills the requirement for sec-
no less frequently than every 30 days.
ond and subsequent recertifications of all cases not
(e) Timing of certification and recertification: Cases
subject to PPS and of PPS day outlier cases.
subject to PPS. For cases subject to PPS, certifi-
cation is required as follows:
424.16 Timing of certification for individual admit-
(1) For day-outlier cases, certification is required
ted to a hospital before entitlement to Medicare
no later than one day after the hospital rea-
benefits.
sonably assumes that the case meets the out-
Basic rule. If an indivdual is admitted to a hospital before
lier criteria, established in accordance with
becoming entitled to Medicare benefits (for instance, before
412.80(a)(1)(i) of this chapter, or no later than
attaining age 65), the day of entitlement (instead of the day
20 days into the hospital stay, whichever is
of admission) is the starting point for the time limits spec-
earlier. The first and subsequent recertifica-
ified in 424.13(e) for certification and recertification.
tions are required at intervals established by
Example. (Hospital that is not a psychiatric hospital
the UR committee (on a case-by-case basis
and is not subject to PPS). For a patient who is
if it so chooses) but not less frequently than
admitted on August 15 and becomes entitled on
every 30 days.
September 1-
(2) For cost-outlier cases, certification is required
(1) The certification is required no later than
no later than the date on which the hospital
September 12;
requests cost outlier payment or 20 days into
(2) The first recertification is required no later
the hospital stay, whichever is earlier. If pos-
than September 18; and
sible, certification must be made before the
(3) Subsequent recertifications are required at
hospital incurs costs for which it will seek cost
least every 30 days after September 18.
outlier payment. In cost outlier cases, the first
153 FR 6635, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988]
and subsequent recertifications are required at
intervals established by the UR committee (on
424.20 Requirements for posthospital SNF care.
a case-by-case basis if it SO chooses).
Medicare Part A pays for posthospital SNF care furnished
(f) Recertification requirement fulfilled by utilization
by a SNF, or a hospital or RPCH with a swing-bed approval,
review.
only if the certification and recertification for services are
(1) At the hospital's option, extended stay review
consistent with the content of paragraph (a) or (c) of this
by its UR committee may take the place of
section, as appropriate.
the second and subsequent physician recer-
(a) Content of certification.
tifications required for cases not subject to
(1) General requirements.
PPS and for PPS day-outlier cases.
(i) Posthospital SNF care is or was required
(2) A utilization review that is used to fulfill the
because the individual needs or need-
recertification requirement is considered time-
ed on a daily basis skilled nursing care
ly if performed no later than the seventh day
(furnished directly by or requiring the
after the day the physician recertification
supervision of skilled nursing person-
would have been required. The next physi-
nel) or other skilled rehabilitation ser-
cian recertification would need to be made
vices that, as a practical matter, can only
Association
for
Home
Care
be provided in a SNF or a swing-bed
available in case of an emergency and has
hospital on an inpatient basis; and
knowledge of the case; or
(ii) The SNF care is or was needed for a con-
(2) A nurse practitioner or clinical nurse spe-
dition for which the individual received
cialist, neither of whom has a direct or indi-
inpatient care in a participating hospital
rect employment relationship with the facil-
or a qualified hospital, as defined in 409.3
ity but who is working in collaboration with
of this chapter.
a physician. For purposes of this section,
(2) Special requirement: A swing-bed hospital
collaboration means a process whereby a
with more than 49 beds (but fewer than 100)
nurse practitioner or clinical nurse special-
that does not transfer a swingbed patient to
ist works with a doctor of medicine or
a SNF within 5 days of the availability date.
osteopathy to deliver health care services.
Transfer of the extended care patient to the
The services are delivered within the scope
SNF is not medically appropriate.
of the nurse's professional expertise, with
(b) Timing of certification.
medical direction and appropriate super-
(1) General rule. The certification must be
vision as provided for in guidelines jointly
obtained at the time of admission or as soon
developed by the nurse and the physician
thereafter as is reasonable and practicable.
or other mechanisms defined by Federal
(2) Special rules for certain swing-bed hospi-
regulations and the law of the State in
tals. For swingbed hospitals with more than
which the services are performed.
49 beds that are approved after March 31,
(f) Recertification requirement fulfilled by utilization
1988, the extended care patient's physician
review. A SNF may substitute utilization review of
has 5 days (excluding weekends and holi-
extended stay cases for the second and subse-
days) beginning on the availability date as
quent recertifications, if it includes this procedure
defined in 413.114(b), to certify that the
in its utilization review plan.
transfer of the extended care patient is not
(g) Description of procedures. The SNF must have
medically appropriate.
available on file a written description that speci-
(c) Content of recertifications.
fies the certification and recertification time sched-
(1) The reasons for the continued need for
ule and indicates whether utilization review is
posthopsital SNF care:
used as an alternative to the second and subse-
(2) The estimated time the individual will need
quent recertifications.
to remain in the SNF;
153 FR 6634, Mar. 2, 1988, as amended at 54 FR 37275, Sept. 7, 1989;
(3) Plans for home care, if any; and
58 FR 30671, May 26, 1993; 60 FR 38272, July 26, 1995/
(4) If appropriate, the fact that continued ser-
vices are needed for a condition that arose
424.22 Requirements for home health services.
after admission to the SNF and while the indi-
Medicare Part A or Part B pays for home health services
vidual was still under treatment for the con-
only if a physician certifies and recertifies the content
dition for which he or she had received inpa-
specified in paragraphs (a)(1) and (b)(2) of this section,
tient hospital services.
as appropriate.
(d) Timing of recertifications.
(a) Certification-
(1) The first recertification is required no later
(1) Content of certification. As a condition for
than the 14th day of posthospital SNF care.
payment of home health services under
(2) Subsequent recertifications are required at
Medicare Part A or Medicare Part B, a physi-
least every 30 days after the first recertification.
cian must certify as follows:
(e) Signature. Certification and recertification state-
(i) The individual needs or needed inter-
ments may be signed by-
mittent skilled nursing care, or physical
(1) The physician responsible for the case or,
or speech therapy, or (for the period
with his or her authorization, by a physi-
from July through November 30, 1981)
cian on the SNF staff or a physician who is
occupational therapy.
CHCE Resource Manual II-201
(ii) Home health services were required
be provided by an HHA may not be certified
because the individual was confined to
or recertified, and a plan of treatment may not
the home except when receiving out-
be established and reviewed, by any physi-
patient services.
cian who has a significant ownership inter-
(iii) A plan for furnishing the services has
est in, or a significant financial or contractu-
been established and is periodically
al relationship with, that HHA.
reviewed by a physician who is a doc-
(2) Significant ownership interest. A physician is
tor of medicine, osteopathy, or podiatric
considered to have a significant ownership
medicine, and who is not precluded from
interest in an HHA if he or she-
performing this function under paragraph
(i) Has a direct or indirect ownership inter-
(d) of this section. (A doctor of podiatric
est of 5 percent or more in the capital,
medicine may perform only plan of treat-
the stock, or the profits of the home
ment functions that are consistent with
health agency; or
the functions he or she is authorized to
(ii) Has an ownership interest of 5 percent
perform under State law.)
or more in any mortgage, deed of trust,
(iv) The services were furnished while the
note, or other obligation that is secured
individual was under the care of a physi-
by the agency, if that interest equals 5
cian who is a doctor of medicine,
percent or more of the agency's assets.
osteopathy, or podiatric medicine.¹
(3) Significant financial or contractual relation-
(2) Timing and signature. The certification of
ship. Beginning November 26, 1982, a physi-
need for home health services must be
cian is considered to have a significant finan-
obtained at the time the plan of treatment is
cial or contractual relationship with an HHA
established or as soon thereafter as possible
if he or she-
and must be signed by the physician who
(i) Receives any compensation as an offi-
establishes the plan.
cer or director of the HHA; or
(b) Recertification.
(ii) Has direct or indirect business transac-
(1) Timing and signature of recertification.
tions with the HHA that, in any fiscal
Recertification is required at least every 2
year, amount to more than $25,000 or
months, preferably at the time the plan is
5 percent of the agency's total operat-
reviewed, and must be signed by the physi-
ing expenses, whichever is less.
cian who reviews the plan.
Business transactions means contracts,
(2) Content and basis of recertification. The recer-
agreements, purchase orders, or leases
tification statement must indicate the contin-
to obtain services, supplies, equipment,
uing need for services and estimate how
and space and, after August 29, 1986,
much longer the services will be required.
salaried employment.
Need for occupational therapy may be the
(4) Exemption of uncompensated officer or
basis for continuing services that were initi-
director. A physician who serves as an
ated because the individual needed skilled
uncompensated officer or director of an HHA
nursing care or physical or speech therapy.
is not precluded from performing physician
(d) Limitations on the performance of certification
certification and plan of treatment functions
and plan of treatment functions.
for that HHA.
(1) Basic rule. Beginning November 26, 1982,
(e) Exceptions to limitations.
and except as provided in paragraph (e) of
(1) Exceptions for governmental entities. The lim-
this section, need for home health services to
itations of paragraph (d) of this section do not
apply to an HHA that is operated by a Federal,
1 As a condition of Medicare Part A payment for home health services fur-
State, or local governmental authority.
nished before July 1981, the physician was also required to certify that the
(2) Exception for sole community HHAs. The
services were needed for a condition for which the individual bad received
limitations of paragraph (d) of this section
inpatient hosptial or SNF services.
II-202 National Association for Home Care
do not apply on or after the date on which
approval or disapproval to the intermediary
the HHA is classified as a sole community
(4) An approved classification as sole community
HHA in accordance with paragraphs (f) and
HHA remains in effect without need for reap-
(g) of this section.
(f) Procedures for classification as a sole com-
proval unless there is a change in the cir-
munity HHA.
cumstances under which the classification
(1) The HHA must submit to its intermediary
was approved.
a request for classification, showing that it
(g) Basis for classification as a sole community
meets the conditions of paragraph (g) of
HHA. HCFA approves a classification as a sole
this section.
community HHA only if the HHA designates a
(2) The intermediary reviews the request and
particular area and shows that no other HHA
sends the request, with its recommendations,
to HCFA.
provides services within that area.
(3) HCFA reviews the request and the interme-
153 FR 6638, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988; 56 FR 8845,
diary's recommendation and forwards its
Mar. 1, 1991]
CHCE Resource Manual 11.203
42 CFR Part 424-Subpart C-Claims for Payment
424.30 Scope.
requesting amounts payable under title XVIII to
This subpart sets forth the requirements, procedures, and
a deceased beneficiary.)
time limits for claiming Medicare payments. Claims must
(c) Where claims forms are available. Excluding forms
be filed in all cases except when services are furnished
HCFA-1450 and HCFA-1500, all claims forms pre-
on a prepaid capitation basis by a health maintenance
scribed for use in the Medicare program are dis-
organization (HMO), a competitive medical plan (CMP),
tributed free-of-charge to the public, institutions,
or a health care prepayment plan (HCPP). Special pro-
or organizations. The HCFA-1450 and HCFA-1500
cedures for claiming payment after the beneficiary has
may be obtained only by commercial purchase.
died and for certain bills paid by organizations are set
All other claims forms can be obtained upon
forth in subpart E of this part.
request from HCFA or any Social Security branch
153 FR 6639, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988]
or district office, or from Medicare intermediaries
or carriers. The HCFA-1490S is also available at
424.32 Basic requirements for all claims.
local Social Security Offices.
(a) A claim must meet the following requirements:
153 FR 6639, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988, as amend-
(1) A claim must be filed with the appropriate inter-
ed at 59 FR 10299, Mar. 4, 1994]
mediary or carrier on a form prescribed by
HCFA in accordance with HCFA instructions.
424.33 Additional requirements: Claims for ser-
(2) A claim for physician services must include
vices of providers and claims by suppliers and
appropriate diagnostic coding using ICD-
nonparticipating hospitals.
9-CM.
All claims for services of providers and all claims by sup-
(3) A claim must be signed by the beneficiary or
pliers and nonparticipating hospitals must be-
the beneficiary's representative (in accor-
(a) Filed by the provider, supplier, or hospital; and
dance with 424.36(b)).
(b) Signed by the provider, supplier, or hospital unless
(4) A claim must be filed within the time limits
HCFA instructions waive this requirement.
specified in 424.44.
(b) The prescribed forms for claims are the follow-
424.34 Additional requirements: Beneficiary's
ing: HCFA-1450-Uniform Institutional Provider
claim for direct payment.
Bill. (This form is for institutional provider billing
(a) Basic rule. A beneficiary's claim for direct payment
for Medicare inpatient, outpatient and home
for services furnished by a supplier, or by a non-
health services.)
participating hospital that has not elected to claim
HCFA-1490S-Request for Medicare payment.
payment for emergency services, must include an
(For use by a patient to request payment for med-
itemized bill or a "report of services", as specified
ical expenses.)
in paragraphs (b) and (c) of this section.
HCFA-1490U-Request for Medicare Payment by
(b) Itemized bill from the hospital or supplier. The
Organization. (For use by an organization request-
itemized bill for the services, which may be
ing payment for medical services.)
receipted or unpaid, must include all of the fol-
HCFA-1491-Request for Medicare Payment-
lowing information:
Ambulance. (For use by an organization request-
(1) The name and address of-
ing payment for ambulance services.)
(i) The beneficiary;
HCFA-1500-Health Insurance Claim Form. (For
(ii) The supplier or nonparticipating hospi-
use by physicians and other suppliers to request
tal that furnished the services; and
payment for medical services.) HCFA-1660-
(iii) The physician who prescribed the ser-
Request for Information-Medicare Payment for
vices if they were furnished by a sup-
Services to a Patient now Deceased. (For use in
plier other than the physician.
II-204 National Association for Home Care
(2) The place where each service was furnished,
hospital, or supplier files a claim for services
e.g., home, office, independent laboratory,
that involved no personal contact between the
hospital.
provider, hospital, or supplier and the beneficiary
(3) The date each service was furnished.
(for example, a physician sent a blood sample
(4) A listing of the services in sufficient detail to
to the provider for diagnostic tests), a represen-
permit determination of payment under the
tative of the provider, hospital, or supplier may
fee schedule for physicians' services; for item-
sign the claim on the beneficiary's behalf.
ized bills from physicians, appropriate diag-
(d) Claims by entities that provide coverage com-
nostic coding using ICD-9-CM must be used.
plementary to Medicare. A claim by an entity that
(5) The charges for each service.
provides coverage complementary to Medicare
(c) Report of services furnished by a supplier. For
Part B may be signed by the entity on the bene-
Medicare Part B services furnished by a supplier,
ficiary's behalf.
the beneficiary claims may include the "Report of
(e) Acceptance of other signatures for good cause. If
Services" portion of the appropriate claims form,
good cause is shown, HCFA may honor a claim
completed by the supplier in accordance with
signed by a party other than those specified in
HCFA instructions, in lieu of an itemized bill.
paragraphs (a) through (c) of this section.
153 FR 6634, Mar. 2, 1988, as amended at 59 FR 10299, Mar. 4, 1994;
153 FR 6640, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988, as amend-
59 FR 26740, May 24, 1994]
ed at 53 FR 28388, July 28, 1988]
424.36 Signature requirements.
424.37 Evidence of authority to sign on behalf of
(a) General rule. The beneficiary's own signature is
the beneficiary.
required on the claim unless the beneficiary has
(a) Beneficiary incapable. When a party specified in
died or the provisions of paragraph (b), (c), or (d)
424.36(b) signs a claim or request for payment
of this section apply.
statement, he or she must also submit a brief state-
(b) Who may sign when the beneficiary is incapable.
ment that-
If the beneficiary is physically or mentally inca-
(1) Describes his or her relationship to the ben-
pable of signing the claim, the claim may be
eficiary; and
signed on his or her behalf by one of the fol-
(2) Explains the circumstances that make it
lowing:
impractical for the beneficiary to sign the
(1) The beneficiary's legal guardian.
claim or statement.
(2) A relative or other person who receives social
(b) Beneficiary not present for services. When
security or other governmental benefits on the
a representative of the provider, nonpar-
beneficiary's behalf.
ticipating hospital, or supplier signs a
(3) A relative or other person who arranges for
claim or request for payment statement
the beneficiary's treatment or exercises other
under 424.36(c), he or she must explain
responsibility for his or her affairs.
why it was not possible to obtain the ben-
(4) A representative of an agency or institution
eficiary's signature. (For example: "Patient
that did not furnish the services for which
not physically present for test.")
payment is claimed but furnished other care,
153 FR 6640, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988]
services, or assistance to the beneficiary.
(5) A representative of the provider or of the
424.40 Request for payment effective for more
nonparticipating hospital claiming payment
than one claim.
for services it has furnished if the provider or
(a) Basic procedure. A separate request for payment
nonparticipating hospital is unable to have the
statement prescribed by HCFA and signed by the
claim signed in accordance with paragraph
beneficiary (or by his or her representative) may
(b) (1), (2), (3), or (4) of this section.
be included in claims by reference, in the cir-
(c) Who may sign if the beneficiary was not present
cumstances specified in paragraphs (b) through
for the service. If a provider, nonparticipating
(d) of this section.
CHCE Resource Manual II-205
(b) Claims filed by a provider or nonparticipating
(3) Services to outpatients: Independent rural
hospital-
health clinics and Federally qualified health
(1) Inpatient services. A signed request for
centers. A signed request for payment state-
payment statement, included in the first
ment retained in the clinic's or center's files
claim for Part A services furnished by a
may be effective indefinitely for all claims
facility (a participating hospital or SNF, or
for services furnished to that beneficiary by
a nonparticipating hospital that has elect-
the clinic.
ed to claim payment) during a beneficia-
(d) Signed statement in the supplier's record. A signed
ry's period of confinement, may be effec-
request for payment statement retained in the
tive for all claims for Part A services the
supplier's file may be effective indefinitely sub-
facility furnishes that beneficiary during
ject to the following restrictions:
that confinement.
(1) This policy does not apply to unassigned
(2) Home health services and outpatient phys-
claims for rental of durable medical equip-
ical therapy or speech pathology services.
ment (DME).
A signed request for payment statement,
(2) With respect to assigned claims for rental or
included in the first claim for home health
purchase of DME, a new statement is required
services or outpatient physical therapy or
if another item of equipment is rented or pur-
speech pathology services furnished by a
chased.
provider under a plan of treatment, may be
153 FR 6634, Mar. 2, 1988, as amended at 57 FR 24982, June 12,
effective for all claims for home health ser-
1992]
vices or outpatient physical therapy or
speech pathology services furnished by
424.44 Time limits for filing claims.
the provider under that plan of treatment.
(a) Basic limits. Except as provided in paragraph
(c) Signed statement in the provider record-
(b) of this section, the claim must be mailed or
(1) Services to inpatients. A signed request for
delivered to the intermediary or carrier, as
payment statement in the files of a partici-
appropriate-
pating hospital or SNF may be effective for
(1) On or before December 31 of the following
all claims for services furnished to the bene-
year for services that were furnished during
ficiary during a single inpatient stay in that
the first 9 months of a calendar year; and
facility-
(2) On or before December 31 of the second
(i) By the hospital or SNF;
following year for services that were fur-
(ii) By physicians, if their services are billed
nished during the last 3 months of the cal-
by the hospital or SNF in its name; or
endar year.
(iii) By physicians who bill separately, if the
(b) Extension of filing time because of error or mis-
services were furnished in the hospital
representation.
or SNF.
(1) The time for filing a claim will be extended
(2) Services to outpatients: Providers and renal
if failure to meet the deadline in paragraph
dialysis facilities. A signed request for pay-
(a) of this section was caused by error or
ment statement retained in the provider's
misrepresentation of an employee, interme-
or facility's files may be effective indefi-
diary, carrier, or agent of the Department that
nitely, for all claims for services furnished
was performing Medicare functions and act-
to that beneficiary on an outpatient basis-
ing within the scope of its authority.
(i) By the provider or facility;
(2) The time will be extended through the last
(ii) By physicians whose services are billed
day of the 6th calendar month following the
by the provider or facility in its name; or
month in which the error or misrepresenta-
(iii) By physicians who bill separately, if the
tion is corrected.
services were furnished in the provider
(c) Extension of period ending on a nonworkday.
or facility.
If the last day of the period allowed under
II+206 National Association for Home Care
paragraph (a) or (b) of this section falls on a
(a) The statement is filed with HCFA or any carrier
Federal nonworkday (a Saturday, Sunday, legal
or intermediary within the time limits specified
holiday, or a day which by statute or Executive
in 424.44;
Order is declared to be a nonworkday for
(b) The statement indicates the intent to claim
Federal employees), the time is extended to
Medicare payment for specified services furnished
the next succeeding workday.
to an identified beneficiary; and
424.45 What constitutes a claim for purposes of
(c) A claim that meets the requirements of 424.32(a)
meeting the time limits.
is filed within 6 months after the month in which
A written statement of intent to claim Medicare benefits
the intermediary or carrier, as appropriate, advis-
constitutes a claim if-
es the claimant to file that claim.
CHCE Resource Manual II-207
CFR Part 440-Services: General Provisions
(Medicaid Program)
42 CFR Part 440-Subpart A-Definitions
440.1 [Amended] Basis and purpose.
facility and does not actually stay in the insti-
[Amended by: 61 FR 38395 - MEDICAID PROGRAM;
tution for 24 hours.
MEDICAID ELIGIBILITY QUALITY CONTROL, PRO-
Outpatient means a patient of an organized med-
GRESSIVE REDUCTIONS IN FEDERAL FINANCIAL
ical facility, or distinct part of that facility who is
PARTICIPATION FOR FYS 1982-1984, PAYMENT
expected by the facility to receive and who does
FOR PHYSICIAN BILLING]
receive professional services for less than a 24-
This subpart interprets and implements the following sec-
hour period regardless of the hour of admission,
tions of the Act:
whether or not a bed is used, or whether or not
1902(a)(43) Laboratory services. (See also 447.10 and
the patient remains in the facility past midnight.
447.342 for related provisions on laboratory services.)
Patient means an individual who is receiving
1905(a) Services included in the term "medical assistance."
needed professional services that are directed by
1905 (c), (d), (f) through (i), (1), and (m) Definitions of
a licensed practitioner of the healing arts toward
institutions and services that are included in the term
the maintenance, improvement, or protection of
"medical assistance."
health, or lessening of illness, disability, or pain.
1913 "Swing-bed" services. (See 447.280 and 482.66 of
(See also 435.1009 of this subchapter for defini-
this chapter for related provisions on "swing-bed" ser-
tions relating to institutional care.)
vices.)
(b) Definitions of services for FFP purposes. Except
1915(c) Home and community-based services listed as
as limited in part 441, FFP is available in expen-
"medical assistance" and furnished under waivers under
ditures under the State plan for medical or reme-
that section to individuals who would otherwise require
dial care and services as defined in this subpart.
the level of care furnished in a hospital, NF, or ICF/MR.
[43 FR 45224, Sept. 29, 1978, as amended at 52 FR 47934, Dec. 17,
1915(d) Home and community-based services listed as
1987)
"medical assistance" and furnished under waivers under
that section to individuals age 65 or older who would
440.20 [Revised] Outpatient hospital services and
otherwise require the level of care furnished in a NF.
rural health clinic services.
157 FR 29155. June 30, 1992]
[Revised by: 60 FR 61483 - 11/30/95 - MEDICAID
PROGRAM: NURSE-MIDWIFE SERVICES]
440.2 Specific definitions; definitions of services
(a) Outpatient hospital services means preventive,
for FFP purposes.
diagnostic, therapeutic, rehabilitative, or pallia-
(a) Specific definitions.
tive services that -
Inpatient means a patient who has been admit-
(1) Are furnished to outpatients;
ted to a medical institution as an inpatient on rec-
(2) Except in the case of nurse-midwife ser-
ommendation of a physician or dentist and who-
vices, as specified in 440.165, are furnished
(1) Receives room, board and professional ser-
by or under the direction of a physician or
vices in the institution for a 24-hour period
dentist; and
or longer, or
(3) Are furnished by an institution that -
(2) Is expected by the institution to receive room,
(i) Is licensed or formally approved as a
board and professional services in the insti-
hospital by an officially designated
tution for a 24-hour period or longer even
authority for State standard-setting; and
though it later develops that the patient dies,
(ii) Except in the case of medical super-
is discharged or is transferred to another
vision of nurse-midwife services, as
II-208 National Association for Home Care
specified in 440.165, meets the require-
otherwise compensated for the services
ments for participation in Medicare as
by, the clinic;
a hospital; and
(iii) The services are furnished under a writ-
(4) May be limited by a Medicaid agency in the
ten plan of treatment that is established
following manner: A Medicaid agency may
and reviewed at least every 60 days by a
exclude from the definition of "outpatient
supervising physician of the clinic or that
hospital services" those types of items and
is established by a physician, physician
services that are not generally furnished by
assistant, nurse practitioner, nurse mid-
most hospitals in the State.
wife, or specialized nurse practitioner and
(b) Rural health clinic services. If nurse practitioners
reviewed and approved at least every 60
or physician assistants (as defined in 481.1 of this
days by a supervising physician of the
chapter) are not prohibited by State law from fur-
clinic; and
nishing primary health care, "rural health clinic ser-
(iv) The services are furnished to a home-
vices" means the following services when fur-
bound recipient. For purposes of visiting
nished by a rural health clinic that has been cer-
nurse care, a "homebound" recipient
tified in accordance with part 491 of this chapter.
means one who is permanently or tem-
(1) Services furnished by a physician within the
porarily confined to his place of residence
scope of practice of his profession under State
because of a medical or health condition.
law, if the physician performs the services in
He may be considered homebound if he
the clinic or the services are furnished away
leaves the place of residence infrequent-
from the clinic and the physician has an
ly. For this purpose, "place of residence"
agreement with the clinic providing that he
does not include a hospital or a skilled
will be paid by it for such services.
nursing facility.
(2) Services furnished by a physician assistant,
(c) Other ambulatory services furnished by a rural
nurse practitioner, nurse midwife or other
health clinic. If the State plan covers rural health
specialized nurse practitioner (as defined in
clinic services, other ambulatory services means
405.2401 and 491.2 of this chapter) if the
ambulatory services other than rural health clin-
services are furnished in accordance with
ic services, as defined in paragraph (b) of this
the requirements specified in 405.2414(a) of
section, that are otherwise included in the plan
this chapter.
and meet specific State plan requirements for fur-
(3) Services and supplies that are furnished as an
nishing those services. Other ambulatory services
incident to professional services furnished by
furnishd by a rural health clinic are not subject to
a physician, physician assistant, nurse practi-
the physician supervision requirements specified
tioner, nurse midwife, or specialized nurse
in 491.8(b) of this chapter, unless required by
practitioner. (See 405.2413 and 405.2415 of
State law or the State plan.
this chapter for the criteria for determining
[43 FR 45224, Sept. 29, 1978, as amended at FR 21050, May 17,
whether services and supplies are included
1982; 52 FR 47934, Dec. 17, 1987]
under this paragraph.)
(4) Part-time or intermittent visiting nurse care and
440.30 Other laboratory and X-ray services.
related medical supplies (other than drugs and
Other laboratory and X-ray services means professional
biologicals) if:
and technical laboratory and radiological services—
(i) The clinic is located in an area in which
(a) Ordered and provided by or under the direction
the Secretary has determined that there is
of a physician or other licensed practioner of the
a shortage of home health agencies (see
healing arts within the scope of his practice as
405.2417 of this chapter):
defined by State law or ordered by a physician
(ii) The services are furnished by a registered
but provided by referral laboratory;
nurse or licensed practical nurse or a
(b) Provided in an office or similar facility other than
licensed vocational nurse employed by, or
a hospital outpatient department or clinic; and
CHCE Resource Manual 11.209
(c) Furnished by a laboratory that meets the require-
(iv) Has had orientation to acceptable clini-
ments of part 493 of this chapter.
cal and administrative recordkeeping
[46 FR 42672, Aug. 24, 1981, as amended at 57 FR 7135, Feb. 28,
from a health department nurse.
1992]
(2) Home health aide service provided by a
home health agency,
440.60 Medical or other remedial care provided
(3) Medical supplies, equipment, and appliances
by licensed practitioners.
suitable for use in the home, and
(a) "Medical care or any other type remedial care
(4) Physical therapy, occupational therapy, or
provided by licensed practitioners" means any
speech pathology and audiology services,
medical or remedial care or services, other than
provided by a home health agency or by a
physicians' services, provided by licensed prac-
facility licensed by the State to provide med-
titioners within the scope of practice as defined
ical rehabilitation services. (See 441.15 of this
under State law.
subchapter.)
(b) Chiropractors' services include only services
(c) A recipient's place of residence, for home health
that-
services, does not include a hospital, skilled
(1) Are provided by a chiropractor who is
nursing facility, or intermediate care facility
licensed by the State and meets standards
except for home health services in an interme-
issued by the Secretary under 405.232(b) of
diate care facility that are not required to be pro-
this chapter; and
vided by the facility under subparts F and G of
(2) Consists of treatment by means of manual
part 442 of this subchapter. For example, a reg-
manipulation of the spine that the chiro-
istered nurse may provide short-term care for a
practor is legally authorized by the State to
recipient in an intermediate care facility during
perform.
an acute illness to avoid the recipient's transfer
440.70 Home health services.
to a skilled nursing facility.
(a) Home health services means the services in para-
(d) "Home health agency" means a public or private
graph (b) of this section that are provided to a
agency or organization, or part of an agency or
recipient-
organization, that meets requirements for par-
(1) At his place of residence, as specified in para-
ticipation in Medicare.
graph (c) of this section; and
(e) A "facility licensed by the State to provide med-
(2) On his physician's orders as part of a written
ical rehabilitation services" means a facility
plan of care that the physician reviews every
that-
60 days.
(1) Provides therapy services for the primary pur-
(b) Home health services include the following services
pose of assisting in the rehabilitation of dis-
and items. Those listed in paragraphs (b) (1), (2)
abled individuals through an integrated pro-
and (3) of this section are required services; those
gram of-
in paragraph (b)(4) of this section are optional.
(i) Medical evaluation and services; and
(1) Nursing service, as defined in the State Nurse
(ii) Psychological, social, or vocational eval-
Practice Act, that is provided on a part-time
uation and services; and
or intermittent basis by a home health agency
(2) Is operated under competent medical super-
as defined in paragraph (d) of this section,
vision either-
or if there is no agency in the area, a regis-
(i) In connection with a hospital; or
tered nurse who-
(ii) As a facility in which all medical and
(i) Is currently licensed to practice in the
related health services are prescribed by
State;
or under the direction of individuals
(ii) Receives written orders from the
licensed to practice medicine or surgery
patient's physician;
in the State.
(iii) Documents the care and services pro-
143 FR 45224, Sept. 29, 1978, as amended at 45 FR 24888, Apr. 11,
vided; and
1980]
#210 National Association for Home Care
440.80 Private duty nursing services.
(9) Other services requested by the agency and
Private duty nursing services means nursing services for
approved by HCFA as cost effective and nec-
recipients who require more individual and continuous
essary to avoid institutionalization.
care than is available from a visiting nurse or routinely pro-
(c) Expanded habilitation services, effective April 7,
vided by the nursing staff of the hospital or skilled nurs-
1986-
ing facility. These services are provided-
(1) General rule. Expanded habilitation services
(a) By a registered nurse or a licensed practical nurse;
are those services specified in paragraph
(b) Under the direction of the recipient's physi-
(c)(2) of this section, that are provided to
cian; and
recipients who have been discharged from a
(c) To a recipient in one or more of the following
Medicaidcertified NF or ICF/MR, regardless of
locations at the option of the State-
when the discharge occurred.
(1) His or her own home;
(2) Services included. The agency may include
(2) A hospital; or
as expanded habilitation services the fol-
(3) A skilled nursing facility.
lowing services:
[52 FR 47934, Dec. 17, 1987]
(i) Prevocational services, which means ser-
vices that prepare an individual for paid
440.180 Home or community-based services.
or unpaid employment and that are not
(a) Description and requirements for services. Home
job-task oriented but are, instead, aimed
or community-based services means services, not
at a generalized result. These services
otherwise furnished under the State's Medicaid
may include, for example, teaching an
plan, that are furnished under a waiver granted
individual such concepts as compliance,
under the provisions of part 441, subpart G of
attendance, task completion, problem
this chapter.
solving and safety.
(1) These services may consist of any or all of the
Prevocational services are distinguish-
services listed in paragraph (b) of this section,
able from noncovered vocational ser-
as those services are defined by the agency
vices by the following criteria:
and approved by HCFA.
(A) The services are provided to persons
(2) The services must meet the standards speci-
who are not expected to be able to
fied in 441.302(a) of this chapter concerning
join the general work force or partic-
health and welfare assurances.
ipate in a transitional sheltered work-
(3) The services are subject to the limits on FFP
shop within one year (excluding sup-
described in 441.310 of this chapter.
ported employment programs).
(b) Included services. Home or community-based ser-
(B) If the recipients are compensated,
vices may include the following services, as they
they are compensated at less than
are defined by the agency and approved by HCFA:
50 percent of the minimum wage;
(1) Case management services.
(C) The services include activities which
(2) Homemaker services.
are not primarily directed at teaching
(3) Home health aide services.
specific job skills but at underlying
(4) Personal care services.
habilitative goals (for example, atten-
(5) Adult day health services.
tion span, motor skills); and
(6) Habilitation services.
(D) The services are reflected in a plan
(7) Respite care services.
of care directed to habilitative rather
(8) Day treatment or other partial hospitalization
than explicit employment objectives.
services, psychosocial rehabilitation services
(ii) Educational services, which means spe-
and clinic services (whether or not furnished
cial education and related services (as
in a facility) for individuals with chronic men-
defined in sections 602(16) and (17) of
tal illness, subject to the conditions specified
the Education of the Handicapped Act)
in paragraph (d) of this section.
(20 U.S.C. 1401 (16 and 17)) to the
CHCE Resource Manual #211
extent they are not prohibited under
may not be included in home and
paragraph (c)(3)(i) of this section.
communitybased service waivers for the
(iii) Supported employment services, which
following individuals:
facilitate paid employment, that are-
(i) For individuals aged 22 through 64 who,
(A) Provided to persons for whom com-
absent the waiver, would be institution-
petitive employment at or above the
alized in an institution for mental dis-
minimum wage is unlikely and who,
eases (IMD); and, therefore, subject to
because of their disabilities, need
the limitation on IMDs specified in
intensive ongoing support to per-
435.1008(a)(2) of this subchapter.
form in a work setting;
(ii) For individuals, not meeting the age
(B) Conducted in a variety of settings,
requirements described in paragraph
particularly worksites in which
(d)(2)(i) of this section, who, absent the
persons without disabilities are
waiver, would be placed in an IMD in
employed; and
those States that have not opted to
(C) Defined as any combination of spe-
include the benefits defined in 440.140
cial supervisory services, training,
or 440.160.
transportation, and adaptive equip-
159 FR 37716, July 25, 1994]
ment that the State demonstrates are
EFFECTIVE DATE NOTE: At 59 FR 37716, July 25, 1994, 440.180
essential for persons to engage in
was revised. This section contains information collection and record-
paid employment and that are not
keeping requirements and will not become effective until approval
normally required for nondisabled
has been given by the Office of Management and Budget A notice
persons engaged in competitive
will be published in the FEDERAL REGISTER once approval has been
employment.
obtained.
(3) Services not included. The following services
may not be included as habilitation services:
440.181 Home and community-based services for
(i) Special education and related services
individuals age 65 or older.
(as defined in sections 602(16) and (17)
(a) Description of services. Home and community-
of the Education of the Handicapped
based services for individuals age 65 or older
Act) (20 U.S.C. 1401 (16) and (17)) that
means services, not otherwise furnished under the
are otherwise available to the individual
State's Medicaid plan, or services already fur-
through a local educational agency.
nished under the State's Medicaid plan but in
(ii) Vocational rehabilitation services that are
expanded amount, duration, or scope, which are
otherwise available to the individual
furnished to individuals age 65 or older under a
through a program funded under sec-
waiver granted under the provisions of part 441,
tion 110 of the Rehabilitation Act of 1973
subpart H of this subchapter. Except as provid-
(29 U.S.C. 730).
ed in 441.310, the services may consist of any of
(d) Services for the chronically mentally ill.
the services listed in paragraph (b) of this section
(1) Services included. Services listed in para-
that are requested by the State, approved by
graph (b)(8) of this section include those
HCFA, and furnished to eligible recipients. Service
provided to individuals who have been diag-
definitions for each service in paragraph (b) of this
nosed as being chronically mentally ill, for
section must be approved by HCFA.
which the agency has requested approval
(b) Included services.
as part of either a new waiver request or a
(1) Case management services.
renewal and which have been approved by
(2) Homemaker services.
HCFA on or after October 21, 1986.
(3) Home health aide services.
(2) Services not included. Any home and com-
(4) Personal care services.
munity-based service, including those indi-
(5) Adult day health services.
cated in paragraph (b)(8) of this section,
(6) Respite care services.
for
Care
CFR Part 484-Conditions of Participation:
Home Health Agencies
42 CFR Part 484-Subpart A-General Provisions
441.10 Basis.
(k) Section 1905(a) (following (a)(24)) for prohibition
This subpart is based on the following sections of the Act
of FFP in expenditures for certain services
which state requirements and limits on the services spec-
(441.13).
ified or provide Secretarial authority to prescribe regula-
160 FR 19862, Apr. 21, 1995]
tions relating to services:
(a) Section 1102 for end-stage renal disease (441.40).
441.15 Home health services.
(b) Section 1138(b) for organ procurement organi-
With respect to the services defined in 440.70 of this sub-
zation services (441.13(c)).
chapter, a State plan must provide that-
(c) Sections 1902(a)(10)(A) and 1905(a)(21) for nurse
(a) Home health services include, as a minimum-
practitioner services (441.22).
(1) Nursing services;
(d) Sections 1902(a)(10)(D) and 1905(a)(7) for home
(2) Home health aide services; and
health services (441.15).
(3) Medical supplies, equipment, and appliances.
(e) Section 1903(i)(1) for organ transplant procedures
(b) The agency provides home health services to-
(441.35).
(1) Categorically needy recipients age 21 or over;
(f) Section 1903(i)(5) for certain prescribed drugs
(2) Categorically needy recipients under age 21,
(441.25).
if the plan provides skilled nursing facility
(g) Section 1903(i)(6) for prohibition (except in
services for them; individuals; and
emergency situations) of FFP in expenditures
for inpatient hospital tests that are not ordered
(3) Medically needy recipients to whom skilled
by the attending physician or other licensed
nursing facility services are provided under
practitioner (441.12).
the plan.
(h) Section 1905(a)(4)(C) for family planning (441.20).
(c) The eligibility of a recipient to receive home
(i) Sections 1905 (a)(12) and (e) for optometric ser-
health services does not depend on his need for
vices (441.30).
or discharge from institutional care.
(j) Section 1905(a)(17) for nurse-midwife services
143 FR 45229, Sept. 29, 1978, as amended at 45 FR 24889, Apr. 11,
(441.21).
1980]
11.214 National Association for Home Care
(7) Other medical and social services requested by
whichever is less) as an inpatient in one or
the Medicaid agency and approved by HCFA,
more hospitals, NFs, or ICFs/MR;
which will contribute to the health and well-
(3) Except for the availability of respiratory care
being of individuals and their ability to reside
services, would require respiratory care as
in a community-based care setting.
an inpatient in a hospital, NF, or ICF/MR and
157 FR 29156, June 30, 1992]
would be eligible to have payment made for
inpatient care under the State plan;
440.185 Respiratory care for ventilator-dependent
(4) Has adequate social support services to be
individuals.
cared for at home;
(a) "Respiratory care for ventilator-dependent indi-
(5) Wishes to be cared for at home; and
viduals" means services that are not otherwise
(6) Receives services under the direction of a
available under the State's Medicaid plan, pro-
physician who is familiar with the techni-
vided on a part-time basis in the recipient's home
cal and medical components of home ven-
by a respiratory therapist or other health care pro-
tilator support, and who has medically
fessional trained in respiratory therapy (as deter-
determined that in-home care is safe and
mined by the State) to an individual who-
feasible for the individual.
(1) Is medically dependent on a ventilator for
(b) For purposes of paragraphs (a)(4) and (5) of this
life support at least 6 hours per day;
section, a recipient's home does not include a
(2) Has been so dependent for at least 30 con-
hospital, NF, ICF/MR or other institution as defined
secutive days (or the maximum number
in 435.1009.
of days authorized under the State plan,
159 FR 37717, July 25, 1994]
CHCE Resource Manual 11.213
42 CFR Part 484-Subpart B-Administration
484.1 Basis and scope.
summarizes facts about care furnished and the
(a) Basis and scope. This part is based on the indicated
patient's response during a given period of time.
provisions of the following sections of the Act:
Proprietary agency means a private profit-making
(1) Sections 1861(o) and 1891 establish the con-
agency licensed by the State.
ditions that an HHA must meet in order to
Public agency means an agency operated by a State
participate in Medicare.
or local government.
(2) Section 1861(z) specifies the Institutional plan-
Subdivision means a component of a multi-function
ning standards that HHAs must meet.
health agency, such as the home care department
(b) This part also sets forth additional requirements
of a hospital or the nursing division of a health
that are considered necessary to ensure the health
department, which independently meets the con-
and safety of patients
ditions of participation for HHAs. A subdivision
160 FR 50443, Sept. 29, 1995]
that has subunits or branch offices is considered a
parent agency.Subunit means a semi-autonomous
484.2 Definitions.
organization that-
As used in this part, unless the context indicates other-
(1) Serves patients in a geographic area different
wise-Bylaws or equivalent means a set of rules adopt-
from that of the parent agency; and
ed by an HHA for governing theagency's operation.
(2) Must independently meet the conditions of
Branch office means a location or site from which a
participation for HHAs because it is too far
home health agency provides services within a
from the parent agency to share administra-
portion of the total geographic area served by
tion, supervision, and services on a daily
the parent agency. The branch office is part of the
basis.Summary report means the compilation
home health agency and is located sufficiently
of the pertinent factors of a patient's clinical
close to share administration, supervision, and
notes and progress notes that is submitted to
services in a manner that renders it unnecessary
the patient's physician.
for the branch independently to meet the condi-
Supervision means authoritative procedural guidance
tions of participation as a home health agency.
by a qualified person for the accomplishment of
Clinical note means a notation of a contact with a
a function or activity. Unless otherwise specified
patient that is written and dated by a member
in this part, the supervisor must be on the premis-
of the health team, and that describes signs and
es to supervise an individual who does not meet
symptoms, treatment and drugs administered
the qualifications specified in 484.4.
and the patient's reaction, and any changes in
physical or emotional condition HHA stands
484.4 Personnel qualifications.
for home health agency.
Staff required to meet the conditions set forth in this part are
Nonprofit agency means an agency exempt from
staff who meet the qualifications specified in this section.
Federal income taxationunder section 501 of the
Administrator, home health agency. A person who:
Internal Revenue Code of 1954.
(a) Is a licensed physician; or
Parent home health agency means the agency that
(b) Is a registered nurse; or
develops and maintainsadministrative controls of
(c) Has training and experience in health service
subunits and/or branch offices.
administration and at least 1 year of supervisory
Primary home health agency means the agency that
or administrative experience in home health care
is responsible for the services furnished to patients
or related health programs.
and for implementation of the plan of care.
Audiologist. A person who:
Progress note means a written notation, dated and
(a) Meets the education and experience require-
signed by a member of the health team, that
ments for a Certificate of Clinical Competence in
CHCE Resource Manual 11.215
audiology granted by the American Speech-
initially licensed by a State or seeking initial qual-
Language-Hearing Association; or
ification as an occupational therapy assistant after
(b) Meets the educational requirements for certifica-
December 31, 1977.
tion and is in the process of accumulating the
Physical therapist. A person who is licensed as a phys-
supervised experience required for certification.
ical therapist by the State in which practicing, and
Home health aide. Effective for services furnished after
(a) Has graduated from a physical therapy curricu-
August 14, 1990, a person who has successfully complet-
lum approved by:
ed a Stateestablished or other training program that meets
(1) The American Physical Therapy Association, or
the requirements of 484.36(a) and a competency evaluation
(2) The Committee on Allied Health Education
program or State licensure program that meets the require-
and Accreditation of the American Medical
ments of 484.36 (b) or (e), or a competency evaluation pro-
Association, or
gram or State licensure program that meets the require-
(3) The Council on Medical Education of the
ments of 484.36 (b) or (e). An individual is not considered
American Medical Association and the
to have completed a training and competency evaluation
American Physical Therapy Association; or
program, or a competency evaluation program if, since the
(b) Prior to January 1, 1966,
individual's most recent completion of this program(s), there
(1) Was admitted to membership by the
has been a continuous period of 24 consecutive months dur-
American PhysicalTherapy Association, or
ing none of which the individual furnished services
(2) Was admitted to registration by the American
described in 409.40 of this chapter for compensation.
Registry of Physical Therapist, or
Occupational therapist. A person who:
(3) Has graduated from a physical therapy cur-
(a) Is a graduate of an occupational therapy cur-
riculum in a 4year college or university
riculum accredited jointly by the Committee on
approved by a State department of edu-
Allied Health Education and Accreditation of the
cation; or
American Medical Association and the American
(c) Has 2 years of appropriate experience as a
Occupational Therapy Association; or
physical therapist, and has achieved a satifac-
(b) Is eligible for the National Registration
tory grade on a proficiency examination con-
Examination ofthe American Occupational
ducted, approved, or sponsored by the U.S.
Therapy Association; or
Public Health Service except that such deter-
(c) Has 2 years of appropriate experience as an occu-
minations of proficiency do not apply with
pational therapist, and has achieved a satisfacto-
respect to persons initially licensed by a State
ry grade on a proficiency examination conduct-
or seeking qualification as a physical therapist
ed, approved, or sponsored by the U.S. Public
after December 31, 1977; or
Health Service, except that such determinations
(d) Was licensed or registered prior to January 1,
of proficiency do not apply with respect to per-
1966, and prior to January 1, 1970, had 15 years
sons initially licensed by a State or seeking initial
of full-time experience in the treatment of illness
qualification as an occupational therapist after
or injury through the practice of physical thera-
December 31, 1977.
py in which services were rendered under the
Occupational therapy assistant. A person who:
order and direction of attending and referring
(a) Meets the requirements for certification as
doctors of medicine or osteopathy; or
an occupational therapy assistant established
(e) If trained outside the United States,
by the American Occupational Therapy
(1) Was graduated since 1928 from a physical
Association; or
therapy curriculum approved in the country
(b) Has 2 years of appropriate experience as an occu-
in which the curriculum was located and in
pational therapy assistant, and has achieved a sat-
which there is a member organization of the
isfactory grade on a proficiency examination con-
World Confederation for Physical Therapy.
ducted, approved, or sponsored by the U.S. Public
(2) Meets the requirements for membership in a
Health Service, except that such determinations of
member organization of the World
proficiency do not apply with respect to persons
Confederation for Physical Therapy,
11*216 National Association for Home Care
Physical therapy assistant. A person who is licensed
(1) Has a baccalaureate degree in social work,
as a physical therapy assistant, if applicable, by
psychology, sociology, or other field relat-
the State in which practicing, and
ed to social work, and has had at least 1
(1) Has graduated from a 2-year college-level
year of social work experience in a health
program approved by the American Physical
care setting; or
Therapy Association; or
(2) Has 2 years of appropriate experience as a
(2) Has 2 years of appropriate experience as a
social work assistant, and has achieved a sat-
physical therapy assistant, and has achieved a
isfactory grade on a proficiency examination
satisfactory grade on a proficiency examina-
conducted, approved, or sponsored by the
tion conducted, approved, or sponsored by the
U.S. Public Health Service, except that these
U.S. Public Health Service, except that these
determinations of proficiency do not apply
determinations of proficiency do not apply
with respect to persons initially licensed by
with respect to persons initially licensed by a
a State or seeking initial qualification as a
State or seeking initial qualification as a phys-
ical therapy assistant after December 31, 1977.
social work assistant after December 31, 1977.
Physician. A doctor of medicine, osteophathy or podi-
Social worker. A person who has a master's degree
atry legally authorized to practice medicine and surgery
from a school of social work accredited by the Council
by the State in which such function or action is performed.
on Social Work Education, and has 1 year of social work
Practical (vocational) nurse. A person who is licensed
experience in a health care setting.
as a practical (vocational) nurse by the State in which
Speech-language pathologist. A person who:
practicing.
(1) Meets the education and experience require-
Public health nurse. A registered nurse who has com-
ments for a Certificate of Clinical Competence
pleted a baccalaureate degree program approved by the
in (speech pathology or audiology) granted
National League for Nursing for public health nursing
by the American Speech-Language-Hearing
preparation or postregistered nurse study that includes
Association; or
content aproved by the National League for Nursing for
(2) Meets the educational requirements for cer-
public health nursing preparation.
tification and is in the process of accumulat-
Registered nurse (RN). A graduate of an approved
ing the supervised experience required for
school of professional nursing, who is licensed as a reg-
certification.
istered nurse by the State in which practicing
[54 FR 33367, August 14, 1989, as amended at 56 FR 32973, July
Social work assistant. A person who:
18, 1991]
CHCE Resource Manual 11.217
42 CFR Part 484-Subpart B-Administration
484.10 Condition of participation: Patient rights.
advance of the disciplines that will furnish
The patient has the right to be informed of his or her
care, and the frequency of visits proposed
rights. The HHA must protect and promote the exercise
to be furnished.
of these rights.
(ii) The HHA must advise the patient in
(a) Standard: Notice of rights.
advance of any change in the plan of
(1) The HHA must provide the patient with a
care before the change is made.
written notice of the patient's rights in
(2) The patient has the right to participate in the
advance of furnishing care to the patient or
planning of the care.
during the initial evaluation visit before the
(i) The HHA must advise the patient in
initiation of treatment.
advance of the right to participate in plan-
(2) The HHA must maintain documentation
ning the care or treatment and in plan-
showing that it has complied with the require-
ning changes in the care or treatment.
ments of this section.
(ii) The HHA complies with the require-
(b) Standard: Exercise of rights and respect for prop-
ments of subpart I of part 489 of this
erty and person.
chapter relating to maintaining written
(1) The patient has the right to exercise his or her
policies and procedures regarding
rights as a patient of the HHA.
advance directives. The HHA must
(2) The patient's family or guardian may exercise
inform and distribute written informa-
the patient's rights when the patient has been
tion to the patient, in advance, concern-
judged incompetent.
ing its policies on advance directives,
(3) The patient has the right to have his or her
including a description of applicable State
property treated with respect.
law. The HHA may furnish advance
(4) The patient has the right to voice grievances
directives information to a patient at the
regarding treatment or care that is (or fails
time of the first home visit, as long as
to be) furnished, or regarding the lack of
the information is furnished before care
respect for property by anyone who is fur-
is provided.
nishing services on behalf of the HHA and
(d) Standard: Confidentiality of medical records. The
must not be subjected to discrimination or
patient has the right to confidentiality of the clin-
reprisal for doing so.
ical records maintained by the HHA. The HHA
(5) The HHA must investigate complaints made
must advise the patient of the agency's policies and
by a patient or the patient's family or
procedures regarding disclosure of clinical records.
guardian regarding treatment or care that is
(e) Standard: Patient liability for payment.
(or fails to be) furnished, or regarding the
(1) The patient has the right to be advised, before
lack of respect for the patient's property by
care is initiated, of the extent to which pay-
anyone furnishing services on behalf of the
ment for the HHA services may be expected
HHA, and must document both the exis-
from Medicare or other sources, and the
tence of the complaint and the resolution
extent to which payment may be required
of the complaint.
from the patient. Before the care is initiated,
(c) Standard: Right to be informed and to participate
the HHA must inform the patient, orally and
in planning care and treatment.
in writing, of-
(1) The patient has the right to be informed, in
(i) The extent to which payment may be
advance about the care to be furnished, and
expected from Medicare, Medicaid, or
of any changes in the care to be furnished.
any other Federally funded or aided pro-
(i) The HHA must advise the patient in
gram known to the HHA;
#*218 National Association for Home Care
(ii) The charges for services that will not be
and regulations. If State or applicable local law
covered by Medicare; and
provides for the licensure of HHAs, an agency
(iii) The charges that the individual may have
not subject to licensure is approved by the licens-
to pay.
ing authority as meeting the standards estab-
(2) The patient has the right to be advised orally
lished for licensure.
and in writing of any changes in the informa-
(b) Standard: Disclosure of ownership and manage-
tion provided in accordance with paragraph
ment information. The HHA must comply with the
(e)(1) of this section when they occur. The
requirements of Part 420, Subpart C of this chap-
HHA must advise the patient of these changes
ter. The HHA also must disclose the following
orally and in writing as soon as possible, but
information to the State survey agency at the time
no later than 30 calendar days from the date
of the HHA's initial request for certification, for
that the HHA becomes aware of a change.
each survey, and at the time of any change in
(f) Standard: Home health hotline. The patient has
ownership or management:
the right to be advised of the availability of the
toll-free HHA hotline in the State. When the
(1) The name and address of all persons with
agency accepts the patient for treatment or care,
an ownership or control interest in the HHA
the HHA must advise the patient in writing of the
as defined in 420.201, 420.202, and 420.206
telephone number of the home health hotline
of this chapter.
established by the State, the hours of its opera-
(2) The name and address of each person who
tion, and that the purpose of the hotline is to
is an officer, a director, an agent or a manag-
receive complaints or questions about local HHAs.
ing employee of the HHA as defined in
The patient also has the right to use this hotline
420.201, 420.202, and 420.206 of this chapter.
to lodge complaints concerning the implemen-
(3) The name and address of the corporation,
tation of the advance directives requirements.
association, or other company that is respon-
[54 FR 33367, August 14, 1989, as amended at 56 FR 32973, July
sible for the management of the HHA, and
18, 1991; 57 FR 8203, Mar. 6, 1992; 60 FR 33293, June 27, 1995/
the name and address of the chief executive
officer and the chairman of the board of direc-
484.12 Condition of participation: Compliance
tors of that corporation, association, or other
with Federal, State, and local laws, disclosure and
company responsible for the management
ownership information, and accepted professional
of the HHA.
standards and principles.
(c) Standard: Compliance with accepted profession-
(a) Standard: Compliance with Federal, State, and
al standards and principles. The HHA and its staff
local laws and regulations. The HHA and its staff
must comply with accepted professional stan-
must operate and furnish services in compliance
dards and principles that apply to professionals
with all applicable Federal, State, and local laws
furnishing services in an HHA.
CHCE Resource Manual 11.219
42 CFR Part 484-Subpart C-Furnishing of Services
484.30 Condition of participation: Skilled nursing
furnished by a qualified physical therapy assistant
services.
or qualified occupational therapy assistant may be
The HHA furnishes skilled nursing services by or under
furnished under the supervision of a qualified
the supervision of a registered nurse and in accordance
physical or occupational therapist. A physical
with the plan of care.
therapy assistant or occupational therapy assistant
(a) Standard: Duties of the registered nurse. The reg-
performs services planned, delegated, and super-
istered nurse makes the initial evaluation visit,
vised by the therapist, assists in preparing clini-
regularly reevaluates the patient's nursing needs,
cal notes and progress reports, and participates
initiates the plan of care and necessary revisions,
in educating the patient and family, and in in-
furnishes those services requiring substantial and
service programs.
specialized nursing skill, initiates appropriate pre-
(b) Standard: Supervision of speech therapy services.
ventive and rehabilitative nursing procedures,
Speech therapy services are furnished only by or
prepares clinical and progress notes, coordinates
under supervision of a qualified speech pathol-
services, informs the physician and other per-
ogist or audiologist.
sonnel of changes in the patient's condition and
[54 FR 33367, August 14, 1989, as amended at 56 FR 32974, July
needs, counsels the patient and family in meet-
18, 1991]
ing nursing and related needs, participates in in-
service programs, and supervises and teaches
484.34 Condition of participation: Medical social
other nursing personnel.
services.
(b) Standard: Duties of the licensed practical nurse.
If the agency furnishes medical social services, those ser-
The licensed practical nurse furnishes services in
vices are given by a qualified social worker or by a qual-
accordance with agency policies, prepares clini-
ified social work assistant under the supervision of a qual-
cal and progress notes, assists the physician and
ified social worker, and in accordance with the plan of care.
registered nurse in performing specialized pro-
The social worker assists the physician and other team
cedures, prepares equipment and materials for
members in understanding the significant social and emo-
treatments observing aseptic technique as
tional factors related to the health problems, participates
required, and assists the patient in learning appro-
in the development of the plan of care, prepares clinical
priate self-care techniques.
and progress notes, works with the family, uses appro-
[54 FR 33367, August 14, 1989, as amended at 56 FR 32974, July
priate community resources, participates in discharge plan-
18, 1991]
ning and inservice programs, and acts as a consultant to
other agency personnel.
484.32 Condition of participation: Therapy
services.
484.36 Condition of participation: Home health
Any therapy services offered by the HHA directly or under
aide services.
arrangement are given by a qualified therapist or by a qual-
Home health aides are selected on the basis of such fac-
ified therapy assistant under the supervision of a qualified
tors as a sympathetic attitude toward the care of the sick,
therapist and in accordance with the plan of care. The qual-
ability to read, write, and carry out directions, and matu-
ified therapist assists the physician in evaluating level of func-
rity and ability to deal effectively with the demands of
tion, helps develop the plan of care (revising it as neces-
the job. They are closely supervised to ensure their com-
sary), prepares clinical and progress notes, advises and
petence in providing care. For home health services fur-
consults with the family and other agency personnel, and
nished (either directly or through arrangements with other
participates in in-service programs.
organizations) after August 14, 1990, the HHA must use
(a) Standard: Supervision of physical therapy assis-
individuals who meet the personnel qualifications speci-
tant and occupational therapy assistant. Services
fied in 484.4 for "home health aide."
II-220 National Association for Home Care
(a) Standard: Home health aide training-
(2) Conduct of training-
(1) Content and duration of training. The aide
(i) Organizations. A home health aide train-
training program must address each of the fol-
ing program may be offered by any orga-
lowing subject areas through classroom and
nization except an HHA that, within the
supervised practical training totalling at least
previous 2 years has been found—
75 hours, with at least 16 hours devoted to
(A) Out of compliance with require-
supervised practical training. The individual
ments of this paragraph (a) or para-
being trained must complete at least 16 hours
graph (b) of this section;
of classroom training before beginning the
(B) To permit an individual that does
supervised practical training.
not meet the definition of "home
(i) Communications skills.
health aide" as specified in 484.4
(ii) Observation, reporting and documen-
to furnish home health aide ser-
tation of patient status and the care or
vices (with the exception of
service furnished.
licensed health professionals and
(iii) Reading and recording temperature,
volunteers);
pulse, and respiration.
(C) Has been subject to an extended
(iv) Basic infection control procedures.
(or partial extended) survey as a
(v) Basic elements of body functioning and
result of having been found to have
changes in body function that must be
furnished substandard care (or for
reported to an aide's supervisor.
other reasons at the discretion of
(vi) Maintenance of a clean, safe, and healthy
the HCFA or the State);
environment.
(D) Has been assessed a civil monetary
(vii) Recognizing emergencies and knowl-
penalty of not less than $5,000 as an
edge of emergency procedures.
intermediate sanction;
The physical, emotional, and developmental
(E) Has been found to have compliance
needs of and ways to work with the popu-
deficiencies that endanger the health
lations served by the HHA, including the need
and safety of the HHA's patients and
for respect for the patient, his or her privacy
has had a temporary management
and his or her property.
appointed to oversee the manage-
(ix) Appropriate and safe techniques in per-
ment of the HHA;
sonal hygiene and grooming that
(F) Has had all or part of its Medicare
include-
payments suspended; or
(A) Bed bath.
(G) Under any Federal or State law with-
(B) Sponge, tub, or shower bath.
in the 2-year period beginning on
(C) Shampoo, sink, tub, or bed.
October 1, 1988-
(D) Nail and skin care.
(1) Has had its participation in the
(E) Oral hygiene.
Medicare program terminated;
(F) Toileting and elimination.
(2) Has been assessed a penalty of
(x) Safe transfer techniques and ambulation.
not less than $5,000 for defi-
(xi) Normal range of motion and positioning.
ciencies in Federal or State stan-
(xii) Adequate nutrition and fluid intake.
dards for HHAs;
(xiii) Any other task that the HHA may choose
(3) Was subject to a suspension of
to have the home health aide perform.
Medicare payments to which it
"Supervised practical training" means training in a lab-
otherwise would have been
oratory or other setting in which the trainee
entitled;
demonstrates knowledge while performing tasks
(4) Had operated under a temporary
on an individual under the direct supervision of
management that was appoint-
a registered nurse or licensed practical nurse.
ed to oversee the operation of
CHCE Resource Manual 11.221
the HHA and to ensure the
offered by any organization except as
health and safety of the HHA's
specified in paragraph (a)(2)(i) of this
patients; or
section. The in-service training may be
(5) Was closed or had it's residents
offered by any organization.
transferred by the State.
(ii) Evaluators and instructors. The compe-
(ii) Qualifications for instructors. The training
tency evaluation must be performed by
of home health aides and the supervision
a registered nurse. The in-service train-
of home health aides during the super-
ing generally must be supervised by a
vised practical portion of the training must
registered nurse who possesses a mini-
be performed by or under the general
mum of 2 years of nursing experience at
supervision of a registered nurse who pos-
least 1 year of which must be in the pro-
sesses a minimum of 2 years of nursing
vision of home health care.
experience, at least 1 year of which must
(iii) Subject areas. The subject areas listed at
be in the provision of home health care.
paragraphs (a)(1) (iii), (ix), (x), and (xi)
Other individuals may be used to provide
of this section must be evaluated after
instruction under the supervision of a
observation of the aide's performance
qualified registered nurse.
of the tasks with a patient. The other
(3) Documentation of training. The HHA must
subject areas in paragraph (a)(1) of this
maintain sufficient documentation to demon-
section may be evaluated through writ-
strate that the requirements of this standard
ten examination, oral examination, or
are met.
after observation of a home health aide
(b) Standard: Competency evaluation and in-service
with a patient.
training-
(4) Competency determination.
(1) Applicability. An individual may furnish home
(i) A home health aide is not considered
health aide services on behalf of an HHA
competent in any task for which he or
only after that individual has successfully
she is evaluated as "unsatisfactory". The
completed a competency evaluation program
aide must not perform that task without
as described in this paragraph. The HHA is
direct supervision by a licensed nurse
responsible for ensuring that the individuals
until after he or she receives training in
who furnish home health aide services on
the task for which he or she was evalu-
its behalf meet the competency evaluation
ated as "unsatisfactory" and passes a sub-
requirements of this section.
sequent evaluation with "satisfactory".
(2) Content and frequency of evaluations and
(ii) A home health aide is not considered to
amount of inservice training.
have successfully passed a competency
(i) The competency evaluation must address
evaluation if the aide has an "unsatisfacto-
each of the subjects listed in paragraph
ry" rating in more than one of the
(a)(1) (ii) through (xiii) of this section.
required areas.
(ii) The HHA must complete a performance
(5) Documentation of competency evaluation.
review of each home health aide no less
The HHA must maintain documentation
frequently than every 12 months.
which demonstrates that the requirements of
(iii) The home health aide must receive at
this standard are met.
least 12 hours of in-service training dur-
(6) Effective date. The HHA must implement a
ing each 12-month period. The in-ser-
competency evaluation program that meets
vice training may be furnished while the
the requirements of this paragraph before
aide is furnishing care to the patient.
February 14, 1990. The HHA must provide
(3) Conduct of evaluation and training-
the preparation necessary for the individual
(i) Organizations. A home health aide com-
to successfully complete the competency
petency evaluation program may be
evaluation program. After August 14, 1990,
#222 National Association for Home Care
the HHA may use only those aides that have
caring for the patient, each supervisory
been found to be competent in accordance
visit must occur while the home health
with 484.36(b).
aide is providing patient care.
(c) Standard: Assignment and duties of the home
(4) If home health aide services are provided by
health aide-
an individual who is not employed directly
(1) Assignment. The home health aide is assigned
by the HHA (or hospice), the services of the
to a specific patient by the registered nurse.
home health aide must be provided under
Written patient care instructions for the home
arrangements, as defined in section
health aide must be prepared by the regis-
1861(w)(1) of the Act. If the HHA (or hospice)
tered nurse or other appropriate profession-
chooses to provide home health aide ser-
al who is responsible for the supervision of
vices under arrangements with another orga-
the home health aide under paragraph (d) of
nization, the HHA's (or hospice's) responsi-
this section.
bilities include, but are not limited to-
(2) Duties. The home health aide provides ser-
(i) Ensuring the overall quality of the care
vices that are ordered by the physician in the
provided by the aide;
plan of care and that the aide is permitted to
(ii) Supervision of the aide's services as
perform under State law. The duties of a
described in paragraphs (d)(1) and (d)(2)
home health aide include the provision of
of this section; and
hands-on personal care, performance of sim-
(iii) Ensuring that home health aides provid-
ple procedures as an extension of therapy or
ing services under arrangements have
nursing services, assistance in ambulation or
met the training requirements of para-
exercises, and assistance in administering
graphs (a) and (b) of this section.
medications that are ordinarily self-adminis-
(e) Personal care attendant: Evaluation requirements—
tered. Any home health aide services offered
(1) Applicability. This paragraph applies to indi-
by an HHA must be provided by a qualified
viduals who are employed by HHAs exclu-
home health aide.
sively to furnish personal care attendant ser-
(d) Standard: Supervision.
vices under a Medicaid personal care benefit.
(1) If the patient receives skilled nursing care,
(2) Rule. An individual may furnish personal care
the registered nurse must perform the super-
services, as defined in 440.170 of this chapter,
visory visit required by paragraph (d)(2) of
on behalf of an HHA after the individual has
this section. If the patient is not receiving
been found competent by the State to furnish
skilled nursing care, but is receiving another
those services for which a competency evalu-
skilled service (that is, physical therapy, occu-
ation is required by paragraph (b) of this sec-
pational therapy, or speech-language pathol-
tion and which the individual is required to
ogy services), supervision may be provided
perform. The individual need not be deter-
by the appropriate therapist.
mined competent in those services listed in
(2) The registered nurse (or another profession-
paragraph (a) of this section that the individual
al described in paragraph (d)(1) of this sec-
is not required to furnish.
tion) must make an on-site visit to the patient's
[54 FR 33367, August 14, 1989, as amended at 56 FR 32974, July
home no less frequently than every 2 weeks.
18, 1991; 56 FR 51334, Oct. 11, 1991; 59 FR 65498, Dec. 20, 1994;
(3) If home health aide services are provided
60 FR 39123, Aug. 1, 1995]
to a patient who is not receiving skilled
nursing care, physical or occupational ther-
484.38 Condition of participation: Qualifying to
apy or speech-language pathology ser-
furnish outpatient physical therapy or speech
vices, the registered nurse must make a
pathology services.
supervisory visit to the patient's home no
An HHA that wishes to furnish outpatient physical thera-
less frequently than every 62 days. In these
py or speech pathology services must meet all the perti-
cases, to ensure that the aide is properly
nent conditions of this part and also meet the additional
CHCE Resource Manual 11*223
health and safety requirements set forth in 485.711,
154 FR 33367, Aug. 14, 1989, as amended at 60 FR 65498, Dec. 20,
485.713, 485.715, 485.719, 485.723, and 485.727 of this
1994]
chapter to implement section 1861(p) of the Act.
154 FR 33367, Aug. 14, 1989, as amended at 60 FR 2329, Jan. 9,
484.52 Condition of participation: Evaluation of
1995; 60 FR 11632, Mar. 2, 1995]
the agency's program.
The HHA has written policies requiring an overall evalu-
484.48 Condition of participation: Clinical records.
ation of the agency's total program at least once a year
A clinical record containing pertinent past and current
by the group of professional personnel (or a committee
findings in accordance with accepted professional stan-
of this group), HHA staff, and consumers, or by profes-
dards is maintained for every patient receiving home
sional people outside the agency working in conjunction
health services. In addition to the plan of care, the record
with consumers. The evaluation consists of an overall pol-
contains appropriate identifying information; name of
icy and administrative review and a clinical record review.
physician; drug, dietary, treatment, and activity orders;
The evaluation assesses the extent to which the agency's
signed and dated clinical and progress notes; copies of
program is appropriate, adequate, effective, and efficient.
summary reports sent to the attending physician; and a
Results of the evaluation are reported to and acted upon
discharge summary. The HHA must inform the attending
by those responsible for the operation of the agency and
physician of the availability of a discharge summary. The
are maintained separately as administrative records.
discharge summary must be sent to the attending physi-
(a) Standard: Policy and administrative review. As a
cian upon request and must include the patient's medical
part of the evaluation process the policies and
and health status at discharge.
administrative practices of the agency are
(a) Standards: Retention of records. Clinical records
reviewed to determine the extent to which they
are retained for 5 years after the month the cost
promote patient care that is appropriate, ade-
report to which the records apply is filed with
quate, effective, and efficient. Mechanisms are
the intermediary, unless State law stipulates a
established in writing for the collection of perti-
longer period of time. Policies provide for reten-
nent data to assist in evaluation.
tion even if the HHA discontinues operations.
(b) Standard: Clinical record review. At least quar-
If a patient is transferred to another health facil-
terly, appropriate health professionals, repre-
ity, a copy of the record or abstract is sent with
senting at least the scope of the program, review
the patient.
a sample of both active and closed clinical records
(b) Standards: Protection of records. Clinical record
to determine whether established policies are fol-
information is safe-guarded against loss or
lowed in furnishing services directly or under
unauthorized use. Written procedures govern
arrangement. There is a continuing review of clin-
use and removal of records and the conditions
ical records for each 62day period that a patient
for release of information. Patient's written con-
receives home health services to determine ade-
sent is required for release of information not
quacy of the plan of care and appropriateness of
authorized by law.
continuation of care.
11.224 National Association for Home Care
CFR Part 488-Survey, Certification, and
Enforcement Procedures
42 CFR Part 488-Subpart A-General Procedures
488.6 Other national accreditation programs for
(b) Eligibility for Medicaid participation can be estab-
hospitals and other providers and suppliers.
lished through Medicare deemed status for
(a) In accordance with the requirements of this sub-
providers and suppliers that are not required
part, a national accreditation program for hospitals;
under Medicaid regulations to comply with any
psychiatric hospitals; SNFs; HHAs; ASCs; RHCs;
requirements other than Medicare participation
CORFs; hospices; screening mammography ser-
requirements for that provider or supplier type.
vices; rural primary care hospitals; or clinic, reha-
(c) (1) A provider or supplier deemed to meet pro-
bilitation agency, or public health agency providers
gram requirements under paragraph (a) of
of outpatient physical therapy, occupational ther-
this section must authorize its accreditation
apy or speech pathology services may provide rea-
organization to release to HCFA and the State
sonable assurance to HCFA that it requires the
survey agency a copy of its most current
providers or suppliers it accredits to meet require-
accreditation survey, together with any infor-
ments that are at least as stringent as the Medicare
conditions when taken as a whole. In such a case,
mation related to the survey that HCFA may
HCFA may deem the providers or suppliers the
require (including corrective action plans).
program accredits to be in compliance with the
(2) HCFA may determine that a provider or sup-
appropriate Medicare conditions. These providers
plier does not meet the Medicare conditions
and suppliers are subject to validation surveys
on the basis of its own investigation of the
under 488.7 of this subpart. HCFA will publish
accreditation survey or any other informa-
notices in the FEDERAL REGISTER in accordance
tion related to the survey.
with 488.8(b) identifying the programs and deem-
(3) Upon written request, HCFA may disclose the
ing authority of any national accreditation program
survey and information related to the survey-
and the providers or suppliers it accredits. The
(i) Of any HHA; or
notice will describe how the accreditation organi-
(ii) Of any other provider or supplier spec-
zation's accreditation program provides reason-
ified at paragraph (a) of this section if
able assurance that entities accredited by the orga-
the accreditation survey and related sur-
nization meet Medicare requirements. (See 488.5
vey information relate to an enforcement
for requirements concerning hospitals accredited
action taken by HCFA.
by JCAHO or AOA.)
158 FR 61840, Nov. 23, 1993]
CHCE Resource Manual 11*225
42 CFR Part 488-Subpart A-General Procedures
Deeming Authority for Accreditation Organizations
with respect to the exemption of the lab-
and CLIA Exemption of Laboratories Under State
oratories in the State from CLIA require-
Programs
ments, may request a reconsideration of
SOURCE: 57 FR 34012, July 31, 1992, unless oth-
the determination by filing a request with
erwise noted.
HCFA either directly by its authorized offi-
cials or through its legal representative.
488.201 Reconsideration.
The request must be filed within 60 days
(a) Right to reconsideration.
of the receipt of notice of an adverse deter-
(1) A national accreditation organization dis-
mination or nonrenewal as provided in
satisfied with a determination that its
subpart A of part 488 or subpart E of part
accreditation requirements do not provide
493, as applicable.
(or do not continue to provide) reason-
(2) Reconsideration procedures are available
able assurance that the entities accredited
after the effective date of the decision to
by the accreditation organization meet the
deny, remove, or not renew the approval
applicable long-term care requirements,
of an accreditation organization or State
conditions for coverage, conditions of cer-
laboratory program.
tification, conditions of participation, or
(d) Content of request. The request for reconsidera-
CLIA condition level requirements is enti-
tion must specify the findings or issues with which
tled to a reconsideration as provided in
the accreditation organization or State disagrees
this subpart.
and the reasons for the disagreement.
(2) A State dissatisfied with a determination that
157 FR 34012, July 31, 1992, as amended at 58 FR 61843, Nov. 23,
the requirements it imposes on laboratories
1993]
in that State and under the laws of that State
do not provide (or do not continue to pro-
488.203 Withdrawal of request for reconsideration.
vide) reasonable assurance that laboratories
A requestor may withdraw its request for reconsidera-
licensed or approved by the State meet
tion at any time before the issuance of a reconsidera-
applicable CLIA requirements is entitled to a
tion determination.
reconsideration as provided in this subpart.
(b) Eligibility for reconsideration. HCFA will reconsid-
488.205 Right to informal hearing.
er any determination to deny, remove or not renew
In response to a request for reconsideration, HCFA will
the approval of deeming authority to private accred-
provide the accreditation organization or the State labo-
itation organizations, or any determination to deny,
ratory program the opportunity for an informal hearing
remove or not renew the approval of a State lab-
as described in 488.207 that will-
oratory program for the purpose of exempting the
(a) Be conducted by a hearing officer appointed by
State's laboratories from CLIA requirements, if the
the Administrator of HCFA; and
accreditation organization or State files a written
(b) Provide the accreditation organization or State
request for a reconsideration in accordance with
laboratory program the opportunity to present,
paragraphs (c) and (d) of this section.
in writing or in person, evidence or documen-
(c) Manner and timing of request for reconsideration.
tation to refute the determination to deny
(1) A national accreditation organization or a
approval, or to withdraw or not renew deem-
State laboratory program described in para-
ing authority or the exemption of a State's lab-
graph (b), dissatisfied with a determina-
oratories from CLIA requirements.
tion with respect to its deeming authority,
or, in the case of a State, a determination
488.207 Informal hearing procedures.
II*226 National Association for Home Care
(a) HCFA will provide written notice of the time and
(a) Within 30 days of the close of the hearing, the
place of the informal hearing at least 10 days
hearing officer will present the findings and
before the scheduled date.
recommendations to the accreditation organi-
(b) The informal reconsideration hearing will be con-
zation or State laboratory program that request-
ducted in accordance with the following proce-
ed the reconsideration.
dures—
(b) The written report of the hearing officer will
(1) The hearing is open to HCFA and the orga-
include-
nization requesting the reconsideration,
(1) Separate numbered findings of fact; and
including-
(2) The legal conclusions of the hearing officer.
(i) Authorized representatives;
(ii) Technical advisors (individuals with
488.211 Final reconsideration determination.
knowledge of the facts of the case or pre-
(a) The hearing officer's decision is final unless the
senting interpretation of the facts); and
Administrator, within 30 days of the hearing offi-
(iii) Legal counsel;
cer's decision, chooses to review that decision.
(2) The hearing is conducted by the hearing offi-
(b) The Administrator may accept, reject or modify
cer who receives testimony and documents
the hearing officer's findings.
related to the proposed action;
(c) Should the Administrator choose to review the
(3) Testimony and other evidence may be accept-
hearing officer's decision, the Administrator will
ed by the hearing officer even though it
issue a final reconsideration determination to
would be inadmissable under the usual rules
the accreditation organization or State labora-
of court procedures;
tory program on the basis of the hearing offi-
(4) Either party may call witnesses from among
cer's findings and recommendations and other
those individuals specified in paragraph (b)(1)
relevant information.
of this section; and
(d) The reconsideration determination of the
(5) The hearing officer does not have the author-
Administrator is final.
ity to compel by subpoena the production of
(e) A final reconsideration determination against
witnesses, papers, or other evidence.
an accreditation organization or State labora-
tory program will be published by HCFA in
488.209 Hearing officer's findings.
the FEDERAL REGISTER.
CHCE Resource Manual II*227
Part 489-Provider Agreements and
Supplier Approvals
42 CFR Part 489-Subpart A-General Provisions
489.1 Statutory basis.
(4) Clinics, rehabilitation agencies, and public
This part implements section 1866 of the Social Security
health agencies.
Act. Section 1866 specifies the terms of provider agree-
(5) Comprehensive outpatient rehabilitation
ments, the grounds for terminating a provider agreement,
facilities (CORFs).
the circumstances under which payment for new admis-
(6) Hospices.
sions may be denied, and the circumstances under which
(7) Rural primary care hospitals (RPCHs).
payment may be withheld for failure to make timely uti-
(8) Community mental health centers (CMHCs).
lization review. The following other sections of that Act
(c) (1) Clinics, rehabilitation agencies, and public
are also pertinent.
health agencies may enter into provider agree-
(a) Section 1861 defines the services covered under
ments only for furnishing outpatient physical
Medicare and the providers that may be reim-
therapy, and speech pathology services.
bursed for furnishing those services.
(2) CMHCs may enter into provider agreements
(b) Section 1864 provides for the use of State survey
only to furnish partial hospitalization services.
agencies to ascertain whether certain entities meet
145 FR 22937, Apr. 4, 1980, as amended at 47 FR 56297, Dec. 15,
the conditions of participation.
1982; 48 FR 56036, Dec. 15, 1983; 51 FR 24492, July 3, 1986; 58
(c) Section 1871 authorizes the Secretary to prescribe
FR 30676, May 26, 1993; 59 FR 6578, Feb. 11, 1994]
regulations for the administration of the Medicare
program.
489.3 Definitions.
145 FR 22937, Apr. 4, 1980, as amended at 51 FR 24492, July 3, 1986]
For purposes of this part-
Immediate jeopardy means a situation in which the
489.2 Scope of part.
provider's noncompliance with one or more requirements
(a) Subpart A of this part sets forth the basic require-
of participation has caused, or is likely to cause, serious
ments for submittal and acceptance of a provider
injury, harm, impairment, or death to a resident.
agreement under Medicare. Subpart B of this part
Provider agreement means an agreement between
specifies the basic commitments and limitations
HCFA and one of the providers specified in 489.2(b) to
that the provider must agree to as part of an agree-
provide services to Medicare beneficiaries and to comply
ment to provide services. Subpart C specifies the
with the requirements of section 1866 of the Act.
limitations on allowable charges to beneficiaries
[48 FR 39837, Sept. 1, 1983, as amended at 51 FR 24492, July 3,
for deductibles, coinsurance, copayments, blood,
1986; 54 FR 5373, Feb. 2, 1989; 59 FR 56250, Nov. 10, 1994; 60
and services that must be part of the provider
FR 50119, Sept. 28, 1995]
agreement. Subpart D of this part specifies how
incorrect collections are to be handled. Subpart
489.10 Basic requirements.
F sets forth the circumstances and procedures for
(a) Any of the providers specified in 489.2 may
denial of payments for new admissions and for
request participation in Medicare. In order to be
withholding of payment as an alternative to ter-
accepted, it must meet the conditions of partici-
mination of a provider agreement.
pation or requirements (for SNFs) set forth in this
(b) The following providers are subject to the provi-
section and elsewhere in this chapter.
sions of this part:
(b) In order to participate in the Medicare program,
(1) Hospitals.
the provider must meet the applicable civil rights
(2) Skilled nursing facilities (SNFs).
requirements of:
(3) Home health agencies (HHAs).
(1) Title VI of the Civil Rights Act of 1964, as
II-228 National Association for Home Care
implemented by 45 CFR part 80, which
ticipate, it must return both copies of the agreement,
provides that no person in the United States
duly signed by an authorized official, to HCFA,
shall, on the ground of race, color, or
together with a written statement indicating
national origin, be excluded from partici-
whether it has been adjudged insolvent or bank-
pation in, be denied the benefits of, or be
rupt in any State or Federal court, or whether any
subject to discrimination under, any pro-
insolvency or bankruptcy actions are pending.
gram or activity receiving Federal financial
(c) Notice of acceptance. If HCFA accepts the agree-
assistance (section 601);
ment, it will return one copy to the provider with
(2) Section 504 of the Rehabilitation Act of 1973,
a written notice that-
as implemented by 45 CFR part 84, which
(1) Indicates the dates on which it was signed by
provides that no qualified handicapped per-
the provider's representative and accepted
son shall, on the basis of handicap, be exclud-
by HCFA;
ed from participation in, be denied the ben-
(2) Specifies the effective date of the agreement;
efits of, or otherwise be subject to discrimi-
and
nation under any program or activity receiv-
145 FR 22937, Apr. 4, 1980, as amended at 59 FR 56251, Nov. 10,
ing Federal financial assistance;
1994]
(3) The Age Discrimination Act of 1975, as
implemented by 45 CFR part 90, which is
489.12 Decision to deny an agreement.
designed to prohibit discrimination on the
(a) Bases for denial. HCFA may refuse to enter into
basis of age in programs or activities receiv-
an agreement for any of the following reasons:
ing Federal financial assistance. The Age
(1) Principals of the prospective provider have
Discrimination Act also permits federally
been convicted of fraud (see 420.204 of this
assisted programs and activities, and recip-
chapter);
ients of Federal funds, to continue to use
(2) The prospective provider has failed to dis-
certain age distinctions, and factors other
close ownership and control interests in
than age, that meet the requirements of
accordance with 420.206 of this chapter; or
the Age Discrimination Act and 45 CFR part
(3) The prospective provider is unable to give sat-
90; and
isfactory assurance of compliance with the
(4) Other pertinent requirements of the Office
requirements of title XVIII of the Act.
of Civil Rights of HHS.
(b) [Reserved]
(c) In order for a hospital, SNF, HHA, or hospice
(c) Compliance with civil rights requirements. HCFA
to be accepted, it must also meet the advance
will not enter into a provider agreement if the
directives requirements specified in subpart I
provider fails to comply with civil rights require-
of this part.
ments set forth in 45 CFR parts 80, 84, and 90, sub-
(d) The State survey agency will ascertain whether the
ject to the provisions of 489.10.
provider meets the conditions of participation or
145 FR 22937, Apr. 4, 1980, as amended at 51 FR 34833, Sept. 30,
requirements (for SNFs) and make its recom-
1986; 54 FR 4027, Jan. 27. 1989; 59 FR 6578, Feb. 11, 1994; 59 FR
mendations to HCFA.
56251, Nov. 10, 1994]
158 FR 61843, Nov. 23, 1993, as amended at 59 FR 6578, Feb. 11,
1994]
489.13 Effective date of agreement.
(a) All Federal requirements are met on the date of
489.11 Acceptance of a provider as a participant.
the survey. The agreement is effective on the date
(a) Action by HCFA. If HCFA determines that the
the on-site survey is completed if, on the date of
provider meets the requirements, it will send the
the survey, the provider meets all Federal health
provider-
and safety conditions of participation or require-
(1) Written notice of that determination; and
ments (for SNFs), and any other requirements
(2) Two copies of the provider agreement.
imposed by HCFA.
(b) Action by provider. If the provider wishes to par-
(b) All Federal requirements are not met on the date
CHCE Resource Manual 11.229
of the survey. If the provider fails to meet any of
ship. Transfer of corporate stock or the
the requirements specified in paragraph (a) of
merger of another corporation into the
this section, the agreement will be effective on the
provider corporation does not constitute
earlier of the following dates:
change of ownership.
(1) The date on which the provider meets all
(4) Leasing. The lease of all or part of a provider
requirements.
facility constitutes change of ownership of
(2) Except for SNFs, the date on which the
the leased portion.
provider is found to meet all conditions of
(b) Notice to HCFA. A provider who is contemplat-
participation and submits a plan of correction
ing or negotiating a change of ownership must
acceptable to HCFA for lower-level deficien-
notify HCFA.
cies or an approvable waiver request, or both.
(c) Assignment of agreement. When there is a change
(3) The date on which a SNF-
of ownership as specified in paragraph (a) of this
(i) Is in substantial compliance, as defined
section, the existing provider agreement will auto-
in 488.301; and
matically be assigned to the new owner.
(ii) Submits, if applicable, an approvable
(d) Conditions that apply to assigned agreements.
waiver request.
An assigned agreement is subject to all applica-
159 FR 56251, Nov. 10, 1994; 60 FR 50119, Sept. 28, 1995/
ble statutes and regulations and to the terms and
489.18 Change of ownership or leasing: Effect on
conditions under which it was originally issued
provider agreement.
including, but not limited to, the following:
(a) What constitutes change of ownership-
(1) Partnership. In the case of a partnership, the
(1) Any existing plan of correction.
removal, addition, or substitution of a part-
(2) Compliance with applicable health and
ner, unless the partners expressly agree oth-
safety standards.
erwise, as permitted by applicable State law,
(3) Compliance with the ownership and finan-
constitutes change of ownership.
cial interest disclosure requirements of part
(2) Unincorporated sole proprietorship. Transfer
420, subpart C, of this chapter.
of title and property to another party consti-
(4) Compliance with civil rights requirements set
tutes change of ownership.
forth in 45 CFR Parts 80, 84, and 90.
(3) Corporation. The merger of the provider
(e) Effect of leasing. The provider agreement will be
corporation into another corporation, or
assigned to the lessee only to the extent of the
the consolidation of two or more corpo-
leased portion of the facility.
rations, resulting in the creation of a new
145 FR 22937, Apr. 4, 1980, as amended at 59 FR 56251, Nov. 10,
corporation constitutes change of owner-
1994]
II-230 National Association for Home Care
42 CFR Part 489-Subpart B-Essentials of Provider Agreements
489.20 [Amended] Basic commitments.
for the area in which the hospital or RPCH is
[Amended by: 60 FR 63123-12/08/95-MEDICARE
located, there is a PRO that has a contract with
PROGRAM; PHYSICIAN FEE SCHEDULE FOR CAL-
HCFA under part B of title XI of the Act.
ENDAR YEAR 1996; PAYMENT POLICIES AND REL-
(f) To maintain a system that, during the admission
ATIVE VALUE UNIT ADJUSTMENTS; FINAL RULE AND
process, identifies any primary payers other than
NOTICE] The provider agrees to the following:
Medicare, so that incorrect billing and Medicare
(a) To limit its charges to beneficiaries and to other
overpayments can be prevented.
individuals on their behalf, in accordance with
(g) To bill other primary payers before billing
provisions of subpart C of this part.
Medicare except when the primary payer is a lia-
(b) To comply with the requirements of subpart D of
bility insurer and except as provided in paragraph
this part for the return or other disposition of any
(j) of this section.
amounts incorrectly collected from a beneficiary
(h) If the provider receives payment for the same
or any other person in his or her behalf.
services from Medicare and another payer that is
(c) To comply with the requirements of 420.203 of
primary to Medicare, to reimburse Medicare any
this chapter when it hires certain former employ-
overpaid amount within 60 days.
ees of intermediaries.
(i) If the provider receives, from a payer that is pri-
(d) In the case of a hospital or an RPCH that fur-
mary to Medicare, a payment that is reduced
nishes services to Medicare beneficiaries, either
because the provider failed to file a proper
to furnish directly or to make arrangements (as
claim-
defined in 409.3 of this chapter) for all Medicare-
(1) To bill Medicare for an amount no greater
covered services to inpatients of a hospital or an
than would have been payable as secondary
RPCH except the following:
payment if the primary insurer's payment had
(1) Physicians' services that meet the criteria of
been based on a proper claim; and
405.550(b) of this chapter for payment on a
(2) To charge the beneficiary only:
reasonable charge basis.
(i) The amount it would have been entitled
(2) Physician assistant services, as defined in
to charge if it had filed a proper claim
section 1861(s)(2)(K)(i) of the Act, that are
and received payment based on such a
furnished after December 31, 1990.
claim; and
(3) Certified nurse-midwife services, as defined in
(ii) An amount equal to any third party pay-
section 1861(ff) of the Act, that are furnished
ment reduction attributable to failure to
after December 31, 1990.
file a proper claim, but only if the
(4) Qualified psychologist services, as defined in
provider can show that-
section 1861(ii) of the Act, that are furnished
(A) It failed to file a proper claim solely
after December 31, 1990.
because the beneficiary, for any rea-
(5) Services of an anesthetist, as defined in 410.69
son other than mental or physical
of this chapter.
incapacity, failed to give the provider
(e) In the case of a hospital or RPCH that furnishes
the necessary information; or
inpatient hospital services or inpatient RPCH ser-
(B) The beneficiary, who was responsi-
vices for which payment may be made under
ble for filing a proper claim, failed to
Medicare, to maintain an agreement with a PRO
do so for any reason other than men-
for that organization to review the admissions,
tal or physical incapacity.
quality, appropriateness, and diagnostic infor-
(j) In the State of Oregon, because of a court deci-
mation related to those inpatient services. The
sion, and in the absence of a reversal on appeal
requirement of this paragraph (e) applies only if,
or a statutory clarification overturning the decision,
CHCE Resource Manual 11.231
hospitals may bill liability insurers first. However,
(2) To post conspicuously (in a form specified by
if the liability insurer does not pay "promptly," as
the Secretary) information indicating whether
defined in 411.50 of this chapter, the hospital
or not the hospital or rural primary care hos-
must withdraw its claim or lien and bill Medicare
pital participates in the Medicaid program
for covered services.
under a State plan approved under title XIX.
(k) In the case of home health agencies that provide
(r) In the case of a hospital as defined in 489.24(b)
home health services to Medicare beneficiaries
(including both the transferring and receiving
under subpart E of part 409 and subpart C of part
hospitals), to maintain-
410 of this chapter, to offer to furnish catheters,
(1) Medical and other records related to indi-
catheter supplies, ostomy bags, and supplies
viduals transferred to or from the hospital
related to ostomy care to any individual who
for a period of 5 years from the date of
requires them as part of their furnishing of home
the transfer;
health services.
(2) A list of physicians who are on call for duty
(1) In the case of a hospital as defined in 489.24(b)
after the initial examination to provide treat-
to comply with 489.24.
ment necessary to stabilize an individual with
(m) In the case of a hospital as defined in 489.24(b),
an emergency medical condition; and
to report to HCFA or the State survey agency any
(3) A central log on each individual who comes
time it has reason to believe it may have received
to the emergency department, as defined in
an individual who has been transferred in an
489.24(b), seeking assistance and whether
unstable emergency medical condition from
he or she refused treatment, was refused
another hospital in violation of the requirements
treatment, or whether he or she was trans-
of 489.24(d).
ferred, admitted and treated, stabilized and
(n) In the case of inpatient hospital services, to par-
transferred, or discharged.
ticipate in any health plan contracted for under
145 FR 22937, Apr. 4, 1980, as amended at 48 FR 39837, Sept. 1,
10 U.S.C. 1079 or 1086 or 38 U.S.C. 613, in accor-
1983; 49 FR 323, Jan. 3, 1984; 54 FR 41747, Oct. 11, 1989; 57 FR
dance with 489.25.
36018, Aug. 12, 1992; 58 FR 30677, May 26, 1993; 59 FR 32120,
(o) In the case of inpatient hospital services, to admit
June 22, 1994]
veterans whose admission has been authorized
EFFECTIVE DATE NOTE: At 59 FR 32120, June 22, 1994, in 489.20,
under 38 U.S.C. 603, in accordance with 489.26.
paragraphs (l) through (r) were added. Paragraphs (m), (r)(2) and
(p) In the case of a hospital that participates in the
(r)(3) contain information collection and recordkeeping require-
Medicare program, to comply with 489.27 by giv-
ments and will not become effective until approved by the Office of
ing each beneficiary a notice about his or her dis-
Management and Budget. A document will be published in the FED-
charge rights at or about the time of the individ-
ERAL REGISTER once approval has been obtained.
ual's admission.
(q) In the case of a hospital as defined in 489.24(b)-
489.21 [Amended] Specific limitations on charges.
(1) To post conspicuously in any emergency
[Amended by: 60 FR 63123-12/08/95-MEDICARE
department or in a place or places likely to
PROGRAM; PHYSICIAN FEE SCHEDULE FOR CAL-
be noticed by all individuals entering the
ENDAR YEAR 1996; PAYMENT POLICIES AND REL-
emergency department, as well as those indi-
ATIVE VALUE UNIT ADJUSTMENTS; FINAL RULE
viduals waiting for examination and treat-
AND NOTICE]
ment in areas other than traditional emer-
Except as specified in subpart C of this part, the
gency departments (that is, entrance, admit-
provider agrees not to charge a beneficiary for any of
ting area, waiting room, treatment area), a
the following:
sign (in a form specified by the Secretary)
(a) Services for which the beneficiary is entitled to
specifying rights of individuals under Section
have payment made under Medicare.
1867 of the Act with respect to examination
(b) Services for which the beneficiary would be enti-
and treatment for emergency medical con-
tled to have payment made if the provider-
ditions and women in labor; and
(1) Had in its files the required certification and
II-232 National Association for Home Care
recertification by a physician relating to the
an item or service is treated as a charge by the hos-
services furnished to the beneficiary;
pital for the item or service, and is also prohibited.
(2) Had furnished the information required by
(g) Items and services furnished in connection with
the intermediary in order to determine the
the implantation of cardiac pacemakers or pace-
amount due the provider on behalf of the
maker leads when HCFA denies payment for those
individual for the period with respect to which
devices under 409.19 or 410.64 of this chapter.
payment is to be made or any prior period;
149 FR 324, Jan. 3, 1984, as amended at 51 FR 22052, June 17,
(3) Had complied with the provisions requiring
1986; 52 FR 27765, July 23, 1987]
timely utilization review of long stay cases
so that a limitation on days of service has not
489.22 Special provisions applicable to prepay-
been imposed under section 1866(d) of the
ment requirements.
Act (see subpart K of part 405 and part 482
(a) A provider may not require an individual enti-
of this chapter for utilization review require-
tled to hospital insurance benefits to prepay in
ments); and
part or in whole for inpatient services as a con-
(4) Had obtained, from the beneficiary or a per-
dition of admittance as an inpatient, except
son acting on his or her behalf, a written
where it is clear upon admission that payment
request for payment to be made to the
under Medicare, Part A cannot be made.
provider, and had properly filed that request.
(b) A provider may not deny covered inpatient ser-
(If the beneficiary or person on his or her
vices to an individual entitled to have payment
behalf refuses to execute a written request,
made for those services on the ground of inabil-
the provider may charge the beneficiary for
ity or failure to pay a requested amount at or
all services furnished to him or her.)
before admission.
(c) Inpatient hospital services furnished to a benefi-
(c) A provider may not evict, or threaten to evict, an
ciary who exhausted his or her Part A benefits, if
individual for inability to pay a deductible or a
HCFA reimburses the provider for those services.
coinsurance amount required under Medicare.
(d) Custodial care and services not reasonable and
(d) A provider may not charge an individual for
necessary for the diagnosis or treatment of illness
(1) its agreement to admit or readmit the indi-
or injury, if-
vidual on some specified future date for cov-
(1) The beneficiary was without fault in incurring
ered impatient services; or
the expenses; and
(2) for failure to remain an inpatient for any
(2) The determination that payment was incor-
agreed-upon length of time or for failure to
rect was not made until after the third year
give advance notice of departure from the
following the year in which the payment
provider's facilities.
notice was sent to the beneficiary.
(e) Inpatient hospital services for which a beneficia-
489.24 Special responsibilities of Medicare hospi-
ry would be entitled to have payment made under
tals in emergency cases.
Part A of Medicare but for a denial or reduction
(a) General. In the case of a hospital that has an emer-
in payments under regulations at 412.48 of this
gency department, if any individual (whether or
chapter or under section 1886(f) of the Act.
not eligible for Medicare benefits and regardless
(f) Items and services furnished to a hospital inpatient
of ability to pay) comes by him or herself or with
(other than physicians' services as described in
another person to the emergency department and
405.550(b) of this chapter or the services of an
a request is made on the individual's behalf for
anesthetist as described in 405.553(b)(4) of this
examination or treatment of a medical condition
chapter) for which Medicare payment would be
by qualified medical personnel (as determined
made if furnished by the hospital or by other
by the hospital in its rules and regulations), the
providers or suppliers under arrangements made
hospital must provide for an appropriate medical
with them by the hospital. For this purpose, a
screening examination within the capability of
charge by another provider or supplier for such
the hospital's emergency department, including
CHCE Resource Manual #233
ancillary services routinely available to the emer-
disturbances and/or symptoms of sub-
gency department, to determine whether or not
stance abuse) such that the absence of
an emergency medical condition exists. The exam-
immediate medical attention could rea-
inations must be conducted by individuals deter-
sonably be expected to result in-
mined qualified by hospital by-laws or rules and
(A) Placing the health of the individual
regulations and who meet the requirements of
(or, with respect to a pregnant
482.55 concerning emergency services person-
woman, the health of the woman or
nel and direction.
her unborn child) in serious jeopardy;
(b) Definitions. As used in this subpart-
(B) Serious impairment to bodily func-
Capacity means the ability of the hospital to
tions; or
accommodate the individual requesting exam-
(C) Serious dysfunction of any bodily
ination or treatment of the transferred indi-
organ or part; or
vidual. Capacity encompasses such things as
(ii) With respect to a pregnant woman who
numbers and availability of qualified staff,
is having contractions—
beds and equipment and the hospital's past
(A) That there is inadequate time to
practices of accommodating additional
effect a safe transfer to another hos-
patients in excess of its occupancy limits.
pital before delivery; or
Comes to the emergency department means, with
(B) That transfer may pose a threat to
respect to an individual requesting exami-
the health or safety of the woman or
nation or treatment, that the individual is on
the unborn child.
the hospital property (property includes
Hospital includes a rural primary care hospital as
ambulances owned and operated by the hos-
defined in section 1861(mm)(1) of the Act.
pital, even if the ambulance is not on hospi-
Hospital with an emergency department means
tal grounds). An individual in a nonhospital-
a hospital that offers services for emergency
owned ambulance on hospital property is
medical conditions (as defined in this para-
considered to have come to the hospital's
graph) within its capability to do SO.
emergency department. An individual in a
Labor means the process of childbirth beginning
nonhospital-owned ambulance off hospital
with the latent or early phase of labor and
property is not considered to have come to
continuing through the delivery of the pla-
the hospital's emergency department, even if
centa. A woman experiencing contractions is
a member of the ambulance staff contacts
in true labor unless a physician certifies that,
the hospital by telephone or telemetry com-
after a reasonable time of observation, the
munications and informs the hospital that
woman is in false labor.
they want to transport the individual to the
Participating hospital means
hospital for examination and treatment. In
(i) a hospital or
such situations, the hospital may deny access
(ii) a rural primary care hospital as defined
if it is in "diversionary status," that is, it does
in section 1861(mm)(1) of the Act that
not have the staff or facilities to accept any
has entered into a Medicare provider
additional emergency patients. If, however,
agreement under section 1866 of the Act.
the ambulance staff disregards the hospital's
Stabilized means, with respect to an "emergency
instructions and transports the individual on
medical condition" as defined in this section
to hospital property, the individual is con-
under paragraph (i) of that definition, that
sidered to have come to the emergency
no material deterioration of the condition is
department. Emergency medical condition
likely, within reasonable medical probabili-
means-
ty, to result from or occur during the trans-
(i) A medical condition manifesting itself
fer of the individual from a facility or, with
by acute symptoms of sufficient sever-
respect to an "emergency medical condition"
ity (including severe pain, psychiatric
as defined in this section under paragraph
#234 National Association for Home Core
(ii) of that definition, that the woman has
the examination and treatment, but the indi-
delivered the child and the placenta.
vidual (or a person acting on the individual's
To stabilize means, with respect to an "emergency
behalf) refuses to consent to the examina-
medical condition" as defined in this section
tion and treatment. The medical record must
under paragraph (i) of that definition, to pro-
contain a description of the examination,
vide such medical treatment of the condition
treatment, or both if applicable, that was
necessary to assure, within reasonable med-
refused by or on behalf of the individual. The
ical probability, that no material deterioration
hospital must take all reasonable steps to
of the condition is likely to result from or
secure the individual's written informed
occur during the transfer of the individual
refusal (or that of the person acting on his or
from a facility or that, with respect to an
her behalf). The written document should
"emergency medical condition" as defined in
indicate that the person has been informed
this section under paragraph (ii) of that def-
of the risks and benefits of the examination
inition, the woman has delivered the child
or treatment, or both.
and the placenta.
(3) Delay in examination or treatment. A partic-
Transfer means the movement (including the dis-
ipating hospital may not delay providing an
charge) of an individual outside a hospital's
appropriate medical screening examination
facilities at the direction of any person
required under paragraph (a) of this section
employed by (or affiliated or associated,
or further medical examination and treatment
directly or indirectly, with) the hospital, but
required under paragraph (c) in order to
does not include such a movement of an
inquire about the individual's method of pay-
individual who
ment or insurance status.
(i) has been declared dead, or
(4) Refusal to consent to transfer. A hospital
(ii) leaves the facility without the permission
meets the requirements of paragraph
of any such person.
(c)(1)(ii) of this section with respect to an
(c) Necessary stabilizing treatment for emergency
individual if the hospital offers to transfer
medical conditions—
the individual to another medical facility in
(1) General. If any individual (whether or not
accordance with paragraph (d) of this sec-
eligible for Medicare benefits) comes to a
tion and informs the individual (or a person
hospital and the hospital determines that the
acting on his or her behalf) of the risks and
individual has an emergency medical condi-
benefits to the individual of the transfer, but
tion, the hospital must provide either-
the individual (or a person acting on the indi-
(i) Within the capabilities of the staff and
vidual's behalf) refuses to consent to the
facilities available at the hospital, for fur-
transfer. The hospital must take all reason-
ther medical examination and treatment
able steps to secure the individual's written
as required to stabilize the medical con-
informed refusal (or that of a person acting
dition; or
on his or her behalf). The written document
(ii) For transfer of the individual to another
must indicate the person has been informed
medical facility in accordance with para-
of the risks and benefits of the transfer and
graph (d) of this section.
state the reasons for the individual's refusal.
(2) Refusal to consent to treatment. A hospital
The medical record must contain a descrip-
meets the requirements of paragraph (c)(1)(i)
tion of the proposed transfer that was refused
of this section with respect to an individual
by or on behalf of the individual.
if the hospital offers the individual the further
(d) Restricting transfer until the individual is
medical examination and treatment described
stabilized—
in that paragraph and informs the individual
(1) General. If an individual at a hospital has an
(or a person acting on the individual's behalf)
emergency medical condition that has not
of the risks and benefits to the individual of
been stabilized (as defined in paragraph (b)
CHCE Resource Manual 11.235
of this section), the hospital may not trans-
(2) A transfer to another medical facility will be
fer the individual unless—
appropriate only in those cases in which-
(i) The transfer is an appropriate transfer
(i) The transferring hospital provides med-
(within the meaning of paragraph (d)(2)
ical treatment within its capacity that min-
of this section); and
imizes the risks to the individual's health
(ii) (A) The individual (or a legally respon-
and, in the case of a woman in labor,
sible person acting on the individ-
the health of the unborn child;
ual's behalf) requests the transfer,
(ii) The receiving facility-
after being informed of the hospi-
(A) Has available space and qualified
tal's obligations under this section
personnel for the treatment of the
and of the risk of transfer. The
individual; and
request must be in writing and indi-
(B) Has agreed to accept transfer of the
cate the reasons for the request as
individual and to provide appropri-
well as indicate that he or she is
ate medical treatment;
aware of the risks and benefits of
(iii) The transferring hospital sends to the
the transfer;
receiving facility all medical records (or
(B) A physician (within the meaning of
copies thereof) related to the emergency
section 1861(r)(1) of the Act) has
condition which the individual has pre-
signed a certification that, based
sented that are available at the time of
upon the information available at
the transfer, including available history,
the time of transfer, the medical ben-
records related to the individual's emer-
efits reasonably expected from the
gency medical condition, observations
provision of appropriate medical
of signs or symptoms, preliminary diag-
treatment at another medical facility
nosis, results of diagnostic studies or
outweigh the increased risks to the
telephone reports of the studies, treat-
individual or, in the case of a woman
ment provided, results of any tests and
in labor, to the woman or the unborn
the informed written consent or certifi-
child, from being transferred. The
cation (or copy thereof) required under
certification must contain a summa-
paragraph (d)(1)(ii) of this section, and
ry of the risks and benefits upon
the name and address of any on-call
which it is based; or
physician (described in paragraph (f) of
(C) If a physician is not physically pre-
this section) who has refused or failed
sent in the emergency department
to appear within a reasonable time to
at the time an individual is trans-
provide necessary stabilizing treatment.
ferred, a qualified medical person
Other records (e.g., test results not yet
(as determined by the hospital in
available or historical records not read-
its bylaws or rules and regulations)
ily available from the hospital's files)
has signed a certification described
must be sent as soon as practicable after
in paragraph (d)(1)(ii)(B) of this
transfer; and
section after a physician (as
(iv) The transfer is effected through qualified
defined in section 1861(r)(1) of the
personnel and transportation equipment,
Act) in consultation with the qual-
as required, including the use of neces-
ified medical person, agrees with
sary and medically appropriate life sup-
the certification and subsequently
port measures during the transfer.
countersigns the certification. The
(3) A participating hospital may not penalize or
certification must contain a sum-
take adverse action against a physician or a
mary of the risks and benefits upon
qualified medical person described in para-
which it is based.
graph (d)(1)(ii)(C) of this section because the
II-236 National Association for Home Care
physician or qualified medical person refus-
consultation under paragraph (g)(1) of this
es to authorize the transfer of an individual
section, the following provisions apply-
with an emergency medical condition that
(i) The PRO reviews the case before the
has not been stabilized, or against any hos-
15th calendar day and makes its tentative
pital employee because the employee reports
findings.
a violation of a requirement of this section.
(ii) Within 15 calendar days of receiving the
(e) Recipient hospital responsibilities. A participat-
case, the PRO gives written notice, sent
ing hospital that has specialized capabilities or
by certified mail, return receipt request-
facilities (including, but not limited to, facilities
ed, to the physician or the hospital (or
such as burn units, shock-trauma units, neonatal
both if applicable).
intensive care units, or (with respect to rural areas)
(iii) (A) The written notice must contain the
regional referral centers) may not refuse to accept
following information:
from a referring hospital within the boundaries of
(1) The name of each individual
the United States an appropriate transfer of an
who may have been the subject
individual who requires such specialized capa-
of the alleged violation.
bilities or facilities if the receiving hospital has
(2) The date on which each alleged
the capacity to treat the individual.
violation occurred.
(f) Termination of provider agreement. If a hospital
(3) An invitation to meet, either by
fails to meet the requirements of paragraph (a)
telephone or in person, to dis-
through (e) of this section, HCFA may terminate
cuss the case with the PRO,
the provider agreement in accordance with
and to submit additional infor-
489.53.
mation to the PRO within 30
(g) Consultation with Peer Review Organizations
calendar days of receipt of the
(PROs)-
notice, and a statement that
(1) General. Except as provided in paragraph
these rights will be waived if
(g)(3) of this section, in cases where a med-
the invitation is not accepted.
ical opinion is necessary to determine a
The PRO must receive the
physician's or hospital's liability under sec-
information and hold the meet-
tion 1867(d)(1) of the Act, HCFA requests
ing within the 30-day period.
the appropriate PRO (with a contract under
(4) A copy of the regulations at 42
Part B of title XI of the Act) to review the
CFR 489.24.
alleged section 1867(d) violation and pro-
(B) For purposes of paragraph
vide a report on its findings in accordance
(g)(2)(iii)(A) of this section, the date
with paragraph (g)(2)(iv) and (v) of this
of receipt is presumed to be 5 days
section. HCFA provides to the PRO all
after the certified mail date on the
information relevant to the case and with-
notice, unless there is a reasonable
in its possession or control. HCFA, in con-
showing to the contrary.
sultation with the OIG, also provides to
(iv) The physician or hospital (or both where
the PRO a list of relevant questions to
applicable) may request a meeting with
which the PRO must respond in its report.
the PRO. This meeting is not designed to
(2) Notice of review and opportunity for discus-
be a formal adversarial hearing or a
sion and additional information. The PRO
mechanism for discovery by the physi-
shall provide the physician and hospital rea-
cian or hospital. The meeting is intend-
sonable notice of its review, a reasonable
ed to afford the physician and/or the hos-
opportunity for discussion, and an opportu-
pital a full and fair opportunity to present
nity for the physician and hospital to submit
the views of the physician and/or hospital
additional information before issuing its
regarding the case. The following provi-
report. When a PRO receives a request for
sions apply to that meeting:
CHCE Resource Manual 11*237
(A) The physician and/or hospital has
provides copies to the OIG and to the
the right to have legal counsel pre-
affected physician and/or the affected
sent during that meeting. However,
hospital. The report must contain the
the PRO may control the scope,
name of the physician and/or the hospi-
extent, and manner of any ques-
tal, the name of the individual, and the
tioning or any other presentation by
dates and times the individual arrived at
the attorney. The PRO may also have
and was transferred (or discharged) from
legal counsel present.
the hospital. The report provides expert
(B) The PRO makes arrangements so
medical opinion regarding whether the
that, if requested by HCFA or the
individual involved had an emergency
OIG, a verbatim transcript of the
medical condition, whether the individ-
meeting may be generated. If HCFA
ual's emergency medical condition was
or OIG requests a transcript, the
stabilized, whether the individual was
affected physician and/or the affect-
transferred appropriately, and whether
ed hospital may request that HCFA
there were any medical utilization or qual-
provide a copy of the transcript.
ity of care issues involved in the case.
(C) The PRO affords the physician
(vi) The report required under paragraph
and/or the hospital an opportunity
(g)(2)(v) of this section should not state
to present, with the assistance of
an opinion or conclusion as to whether
counsel, expert testimony in either
section 1867 of the Act or 489.24 has
oral or written form on the medical
been violated.
issues presented. However, the PRO
(3) If a delay would jeopardize the health or
may reasonably limit the number of
safety of individuals or when there was no
witnesses and length of such testi-
screening examination, the PRO review
mony if such testimony is irrelevant
described in this section is not required before
or repetitive. The physician and/or
the OIG may impose civil monetary penal-
hospital, directly or through coun-
ties or an exclusion in accordance with sec-
sel, may disclose patient records to
tion 1867(d)(1) of the Act and 42 CFR part
potential expert witnesses without
1003 of this title.
violating any non-disclosure require-
(4) If the PRO determines after a preliminary
ments set forth in part 476 of this
review that there was an appropriate med-
chapter.
ical screening examination and the individ-
(D) The PRO is not obligated to consid-
ual did not have an emergency medical con-
er any additional information pro-
dition, as defined by paragraph (b) of this
vided by the physician and/or the
section, then the PRO may, at its discretion,
hospital after the meeting, unless,
return the case to HCFA and not meet the
before the end of the meeting, the
requirements of paragraph (g) except for
PRO requests that the physician
those in paragraph (g)(2)(v).
and/or hospital submit additional
(h) Release of PRO assessments. Upon request, HCFA
information to support the claims.
may release a PRO assessment to the physician
The PRO then allows the physician
and/or hospital, or the affected individual, or his
and/or the hospital an additional peri-
or her representative. The PRO physician's iden-
od of time, not to exceed 5 calendar
tity is confidential unless he or she consents to its
days from the meeting, to submit the
release. (See 476.132 and 476.133 of this chapter.)
relevant information to the PRO.
159 FR 32120, June 22, 1994]
(v) Within 60 calendar days of receiving the
EFFECTIVE DATE NOTE: At 59 FR 32120, June 22, 1994, 489.24
case, the PRO must submit to HCFA
was added. Paragraphs (d) and (g) contain information collection
a report on the PRO's findings. HCFA
and recordkeeping requirements and will not become effective until
11.238 National Association for Home Care
approved by the Office of Management and Budget. A document will
38 CFR part 17 concerning admissions practices and
be published in the FEDERAL REGISTER once approval has been
payment methodology and amounts. This section applies
obtained.
to services furnished to veterans admitted on and after
July 1, 1987.
489.25 Special requirements concerning CHAM-
159 FR 32123, June 22, 1994]
PUS and CHAMPVA programs.
For inpatient services, a hospital that participates in the
489.27 [Revised] Beneficiary notice of discharge
Medicare program must participate in any health plan
rights.
contracted under 10 U.S.C. 1079 or 1086 (Civilian Health
[Revised by: 61 FR 27443-5/31/96-MEDICARE
and Medical Program of the Uniformed Services) and
PROGRAM; CHANGES TO THE HOSPITAL INPA-
under 38 U.S.C. 613 (Civilian Health and Medical Program
TIENT PROSPECTIVE PAYMENT SYSTEMS AND FIS-
of the Veterans Administration) and accept the CHAM-
CAL YEAR 1997 RATES]
PUS/CHAMPVA-determined allowable amount as pay-
[Amended by: 61 FR 46165-08/30/96-MEDICARB
ment in full, less applicable deductible, patient cost-share,
PROGRAM; CHANGES TO THE HOSPITAL INPA-
and noncovered items. Hospitals must meet the require-
TIENT PROSPECTIVE PAYMENT SYSTEMS AND FIS-
ments of 32 CFR part 199 concerning program benefits
CAL YEAR 1997 RATES]
under the Department of Defense. This section applies to
A hospital that participates in the Medicare program must
inpatient services furnished to beneficiaries admitted on
furnish each Medicare beneficiary, or an individual acting
or after January 1, 1987.
on his or her behalf, the notice of discharge rights HCFA
159 FR 32123, June 22, 1994]
supplies to the hospital to implement section 1886(a)(1)(M)
of the Act. The hospital must furnish the statement at or
489.26 Special requirements concerning veterans.
about the time of admission. The hospital must be able
For inpatient services, a hospital that participates in the
to demonstrate compliance with this requirement. This
Medicare program must admit any veteran whose admis-
provision is effective with admissions beginning on or
sion is authorized by the Department of Veterans Affairs
after July 22, 1994.
under 38 U.S.C. 603 and must meet the requirements of
159 FR 32123, June 22, 1994]
CHCE Resource Manual 11.239
42 CFR Part 489-Subpart C-Allowable Charges
489.30 Allowable charges: Deductibles and
deductible if the deductible has not yet
coinsurance.
been met.
(a) Part A deductible and coinsurance. The provider
(5) In the case of DME furnished as a home
may charge the beneficiary or other person on his
health service under Medicare Part B, the
or her behalf:
coinsurance is 20 percent of the custom-
(1) The amount of the inpatient hospital
ary (insofar as reasonable) charge for the
deductible or, if less, the actual charges
services, with the following exception: If
for the services;
the DME is used DME purchased by or on
(2) The amount of inpatient hospital coinsurance
behalf of the beneficiary at a price at least
applicable for each day the individual is fur-
25 percent less than the reasonable charge
nished inpatient hospital services after the 60th
for comparable new equipment, no coin-
day, during a benefit period; and
surance is required.
(3) The posthospital SNF care coinsurance
145 FR 22937, Apr. 4, 1980, as amended at 51 FR 41350, Nov. 14,
amount.
1986]
(4) In the case of durable medical equipment
(DME) furnished as a home health ser-
489.31 Allowable charges: Blood.
vice, 20 percent of the customary charge
(a) Limitations on charges.
for the service.
(1) A provider may charge the beneficiary (or
(b) Part B deductible and coinsurance.
other person on his or her behalf) only
(1) The basic allowable charges are the $75
for the first three pints of blood or units
deductible and 20 percent of the customary
of packed red cells furnished under
(insofar as reasonable) charges in excess of
Medicare Part A during a calendar year, or
that deductible.
furnished under Medicare Part B during a
(2) For hospital outpatient services, the allow-
calendar year.
able deductible charges depend on whether
(2) The charges may not exceed the provider's
the hospital can determine the beneficiary's
customary charges.
deductible status.
(3) The provider may not charge for any whole
(i) If the hospital is unable to determine
blood or packed red cells in any of the cir-
the deductible status, it may charge the
cumstances specified in 409.87(c)(2) of this
beneficiary its full customary charges
chapter.
up to $75.
(b) Offset for excessive charges. If the charge
(ii) If the beneficiary provides official infor-
exceeds the cost to the provider, that excess
mation as to deductible status, the hos-
will be deducted from any Medicare payments
pital may charge only the unmet portion
due the provider.
of the deductible.
156 FR 23022, May 20, 1991, as amended at 57 FR 36018, Aug. 12,
(3) In either of the cases discussed in para-
1992/
graph (b)(2) of this section, the hospital
is required to file with the intermediary,
489.32 Allowable charges: Noncovered and par-
on a form prescribed by HCFA, informa-
tially covered services.
tion as to the services, charges, and
(a) Services requested by beneficiary. If services
amounts collected.
furnished at the request of a beneficiary (or his
(4) The intermediary must reimburse the ben-
or her representative) are more expensive than,
eficiary if reimbursement is authorized and
or in excess of, services covered under
credit the expenses to the beneficiary's
Medicare-
II-240 National Association for Home Care
(1) A provider may charge the beneficiary an
489.34 Allowable charges: Hospitals participating
amount that does not exceed the difference
in State reimbursement control systems or demon-
between-
stration projects.
(i) The provider's customary charges for the
A hospital receiving payment for a covered hospital stay
services furnished; and
under either a State reimbursement control system approved
(ii) The provider's customary charges for the
under 1886(c) of the Act or a demonstration project autho-
kinds and amounts of services that are
rized under section 402(a) of Pub. L. 90-248 (42 U.S.C.
covered under Medicare.
1395b-1) or section 222(a) of Pub. L. 92603 (42 U.S.C. 1395b-
(2) A provider may not charge for the services
1 (note)) and that would otherwise be subject to the prospec-
unless they have been requested by the ben-
tive payment system set forth in part 412 of this chapter may
eficiary (or his or her representative) nor
charge a beneficiary for noncovered services as follows:
require a beneficiary to request services as a
condition of admission.
(a) For the custodial care and medically unnecessary
(3) To avoid misunderstanding and disputes, a
services described in 412.42(c) of this chapter,
provider must inform any beneficiary who
after the conditions of 412.42(c)(1) through (c)(4)
requests a service for which a charge will be
are met; and
made that there will be a specified charge
(b) For all other services in accordance with the
for that service.
applicable rules of this subpart C.
(b) Services not requested by the beneficiary. For
[54 FR 41747, Oct. 11, 1989]
special provisions that apply when a provider
customarily furnishes more expensive services,
489.35 Notice to intermediary.
see 413.35 of this chapter.
The provider must inform its intermediary of any amounts
[45 FR 22937, Apr. 4, 1980, as amended at 51 FR 34833, Sept.
collected from a beneficiary or from other persons on his
30, 1986)
or her behalf.
CHCE Resource Manual 11.241
42 CFR Part 489-Subpart D-Handling of Incorrect Collections
489.40 Definition of incorrect collection.
determine that amounts offset in accordance
(a) As used in this subpart, "incorrect collections"
with 489.41 are to be paid directly to the ben-
means any amounts collected from a beneficiary
eficiary or other person from whom the
(or someone on his or her behalf) that are not
provider received the incorrect collection, if:
authorized under subpart C of this part.
(1) HCFA finds that the provider has failed, fol-
(b) A payment properly made to a provider by an
lowing written request, to refund the amount
individual not considered entitled to Medicare
of the incorrect collection to the beneficiary
benefits will be deemed to be an "incorrect col-
or other person; and
lection" when the individual is found to be
(2) The provider agreement has been terminat-
retroactively entitled to benefits.
ed in accordance with the provisions of sub-
part E of this part.
489.41 Timing and methods of handling.
(b) Before making a determination to make payment
(a) Refund. Prompt refund to the beneficiary or other
under paragraph (a) of this section, HCFA will
person is the preferred method of handling incor-
give written notice to the provider
rect collections.
(1) explaining that an incorrect collection was
(b) Setting aside. If the provider cannot refund with-
made and the amount;
in 60 days from the date on the notice of incor-
(2) requesting the provider to refund the incor-
rect collection, it must set aside an amount, equal
rect collection to the beneficiary or other per-
to the amount incorrectly collected, in a separate
son; and
account identified as to the individual to whom
(3) advising of HCFA's intention to make a
the payment is due. This amount incorrectly col-
determination under paragraph (a) of this
lected must be carried on the provider's records
section.
in this manner until final disposition is made in
(c) The notice will afford an authorized official of
accordance with the applicable State law.
(c) Notice to, and action by, intermediary.
the provider an opportunity to submit, within
(1) The provider must notify the intermediary of
20 days from the date on the notice, written
the refund or setting aside required under
statement or evidence with respect to the incor-
paragraphs (a) and (b) of this section.
rect collection and/or offset amounts. HCFA
(2) If the provider fails to refund or set aside the
will consider any written statement or evidence
required amounts, they may be offset against
in making a determination.
amounts otherwise due the provider.
(d) Payment to a beneficiary or other person under
the provisions of paragraph (a) of this section:
489.42 Payment of offset amounts to beneficiary
(1) Will not exceed the amount of the incorrect
or other person.
collection; and
(a) In order to carry out the commitment to refund
(2) May be considered as payment made to the
amounts incorrectly collected, HCFA may
provider.
11.242 National Association for Home Care
42 CFR Part 489-Subpart E-Termination of
Agreement and Reinstatement After Termination
489.52 Termination by the provider.
(2) It places restrictions on the persons it will
(a) Notice to HCFA.
accept for treatment and it fails either to
(1) A provider that wishes to terminate its
exempt Medicare beneficiaries from those
agreement must send HCFA written notice
restrictions or to apply them to Medicare ben-
of its intent.
eficiaries the same as to all other persons
(2) The notice may state the intended date of
seeking care.
termination which must be the first day of
(3) It no longer meets the appropriate conditions
a month.
of participation or requirements (for SNFs
(b) Termination date.
and NFs) set forth elsewhere in this chapter.
(1) If the notice does not specify a date, or the
(4) It fails to furnish information that HCFA finds
date is not acceptable to HCFA, HCFA may
necessary for a determination as to whether
set a date that will not be more than 6
payments are or were due under Medicare
months from the date on the provider's
and the amounts due.
notice of intent.
(5) It refuses to permit examination of its fiscal
(2) HCFA may accept a termination date that is less
or other records by, or on behalf of HCFA,
than 6 months after the date on the provider's
as necessary for verification of information
notice if it determines that to do so would not
furnished as a basis for payment under
unduly disrupt services to the community or
Medicare.
otherwise interfere with the effective and effi-
(6) It failed to furnish information on business
cient administration of the Medicare program.
transactions as required in 420.205 of this
(3) A cessation of business is deemed to be a
chapter.
termination by the provider, effective with
(7) It failed at the time the agreement was entered
the date on which it stopped providing
into or renewed to disclose information on
services to the community.
convicted individuals as required in 420.204
(c) Public notice.
of this chapter.
(1) The provider must give notice to the pub-
(8) It failed to furnish ownership information as
lic at least 15 days before the effective date
required in 420.206 of this chapter.
of termination.
(9) It failed to comply with civil rights require-
(2) The notice must be published in one or more
ments set forth in 45 CFR parts 80, 84, and 90.
local newspapers and must-
(10) In the case of a hospital or a rural primary
(i) Specify the termination date; and
care hospital as defined in section
(ii) Explain to what extent services may
1861(mm)(1) of the Act that has reason to
continue after that date, in accordance
believe it may have received an individual
with the exceptions set forth in 489.55.
transferred by another hospital in violation of
489.24(d), the hospital failed to report the
489.53 Termination by HCFA.
incident to HCFA or the State survey agency.
Basis for termination of agreement with any provider.
(11) In the case of a hospital requested to furnish
HCFA may terminate the agreement with any provider
inpatient services to CHAMPUS or CHAMP-
if HCFA finds that any of the following failings is
VA beneficiaries or to veterans, it failed to
attributable to that provider:
comply with 489.25 or 489.26, respectively.
(1) It is not complying with the provisions of
(12) It failed to furnish the notice of discharge
title XVIII and the applicable regulations
rights as required by 489.27.
of this chapter or with the provisions of the
(13) It refuses to permit photocopying of any
agreement.
records or other information by, or on behalf
CHCE Resource Manual II-243
of HCFA, as necessary to determine or verify
(c) Notice of termination-
compliance with participation requirements.
(1) Timing: Basic rule. Except as provided in
(14) In the case of a rural primary care hospital
488.456 of this chapter, HCFA gives the
as defined in part 485, subpart F of this chap-
provider notice of termination at least 15 days
ter, the rural primary care hospital maintains
before the effective date of termination of
an average length of stay for inpatients in its
the provider agreement.
most recent 12-month cost reporting period
(2) Immediate jeopardy deficiencies. For a
that is in excess of 72 hours. In determin-
provider or supplier with deficiencies that pose
ing the length of stay of a rural primary care
immediate jeopardy to residents' or patients'
hospital for purposes of this paragraph,
health or safety, HCFA gives notice of termi-
HCFA does not take into account periods
nation at least 2 days before the effective date
of stay in excess of 72 hours that occurred
of termination of the provider agreement.
because transfer to a hospital was preclud-
(3) Content of notice. The notice states the rea-
ed because of inclement weather or other
sons for, and the effective date of, the termi-
emergency conditions.
nation, and explains the extent to which ser-
(b) Termination of provider agreement. In the case
vices may continue after that date, in accor-
of a hospital or rural primary care hospital that
dance with 489.55.
has an emergency department, as defined in
(4) Notice to public. HCFA concurrently gives
489.24(b), HCFA may terminate the provider
notice of the termination to the public.
agreement if-
(d) Appeal by the provider. A provider may appeal
(1) The hospital fails to comply with the require-
the termination of its provider agreement by HCFA
ments of 489.24 (a) through (e), which
in accordance with part 498 of this chapter.
require the hospital to examine, treat, or trans-
151 FR 24492, July 3, 1986, as amended at 52 FR 22454, June 12,
fer emergency medical condition cases appro-
1987; 54 FR 5373, Feb. 2, 1989; 56 FR 48879, Sept. 26, 1991; 59
priately, and require that hospitals with spe-
FR 32123, June 22, 1994; 59 FR 56251, Nov. 10, 1994; 60 FR 45851,
cialized capabilities or facilities accept an
Sept. 1, 1995; 60 FR 50119, Sept. 28, 1995]
appropriate transfer; or
(2) The hospital fails to comply with 489.20(m),
489.54 Termination by the OIG.
(q), and (r), which require the hospital to
(a) Basis for termination.
report suspected violations of 489.24(d), to
(1) The OIG may terminate the agreement of
post conspicuously in emergency depart-
any provider if the OIG finds that any of
ments or in a place or places likely to be
the following failings can be attributed to
noticed by all individuals entering the emer-
that provider.
gency departments, as well as those individ-
(i) It has knowingly and willfully made, or
uals waiting for examination and treatment
caused to be made, any false statement
in areas other than traditional emergency
or representation of a material fact for
departments, (that is, entrance, admitting area,
use in an application or request for pay-
waiting room, treatment area), signs speci-
ment under Medicare.
fying rights of individuals under this subpart,
(ii) It has submitted, or caused to be sub-
to post conspicuously information indicating
mitted, requests for Medicare payment
whether or not the hospital participates in
of amounts that substantially exceed the
the Medicaid program, and to maintain med-
costs it incurred in furnishing the ser-
ical and other records related to transferred
vices for which payment is requested.
individuals for a period of 5 years, a list of
(iii) It has furnished services that the OIG has
on-call physicians for individuals with emer-
determined to be substantially in excess
gency medical conditions, and a central log
of the needs of individuals or of a qual-
on each individual who comes to the emer-
ity that fails to meet professionally rec-
gency department seeking assistance.
ognized standards of health care. The
II+244 National Association for Home Care
OIG will not terminate a provider agree-
(a) Inpatient hospital services (including inpatient
ment under paragraph (a) if HCFA has
psychiatric hospital services) and posthospital
waived a disallowance with respect to
extended care services furnished to a beneficia-
the services in question on the grounds
ry who was admitted before the effective date of
that the provider and the beneficiary
termination; and
could not reasonably be expected to
know that payment would not be made.
(b) Home health services and hospice care furnished
(The rules for determining such lack of
under a plan established before the effective date
knowledge are set forth in 405.330
of termination.1
through 405.334 of this chapter.)
1 For termination before July 18, 1984, payment was available
(b) Notice of termination. The OIG will give the
through the calendar year in which the termination was effective.
provider notice of termination at least 15 days
150 FR 37376, Sept. 13, 1985]
before the effective date of termination of the
agreement, and will concurrently give notice of
489.57 Reinstatement after termination.
termination to the public.
(c) Appeal by the provider. A provider may appeal a
When a provider agreement has been terminated by HCFA
termination of its agreement by the OIG in accor-
under 489.53, or by the OIG under 489.54, a new agree-
dance with subpart O of part 405 of this chapter.
ment with that provider will not be accepted unless HCFA
(d) Other applicable rules. The termination of a
or the OIG, as appropriate, finds—
provider agreement by the OIG is subject to the
(a) That the reason for termination of the previous
additional procedures specified in 1001.105 through
agreement has been removed and there is rea-
1001.109 of this title for notice and appeals.
sonable assurance that it will not recur; and
[51 FR 24492, July 3, 1986, as amended at 51 FR 34788, Sept. 30,
(b) That the provider has fulfilled, or has made
1986]
satisfactory arrangements to fulfill, all of the
489.55 Exceptions to effective date of termination.
statutory and regulatory responsibilities of its
Payment is available for up to 30 days after the effective
previous agreement.
date of termination for-
[51 FR 24493, July 3, 1986]
Resource
11.245
42 CFR Part 489-Subpart I-Advance Directives
SOURCE: 57 FR 8203, Mar. 6, 1992, unless otherwise noted.
directive on the basis of conscience. At
a minimum, a provider's statement of
489.100 Definition.
limitation should:
For purposes of this part, advance directive means a writ-
(A) Clarify any differences between insti-
ten instruction, such as a living will or durable power of
tution-wide conscience objections
attorney for health care, recognized under State law
and those that may be raised by indi-
(whether statutory or as recognized by the courts of the
vidual physicians;
State), relating to the provision of health care when the
(B) Identify the state legal authority per-
individual is incapacitated.
mitting such objection; and
(C) Describe the range of medical con-
489.102 Requirements for providers.
ditions or procedures affected by the
(a) Hospitals, rural primary care hospitals, skilled
conscience objection.
nursing facilities, nursing facilities, home health
(2) Document in the individual's medical record
agencies, providers of home health care (and for
whether or not the individual has executed
Medicaid purposes, providers of personal care
an advance directive;
services), and hospices must maintain written
(3) Not condition the provision of care or oth-
policies and procedures concerning advance
erwise discriminate against an individual
directives with respect to all adult individuals
based on whether or not the individual has
receiving medical care by or through the provider
executed an advance directive;
and are required to:
(4) Ensure compliance with requirements of State
(1) Provide written information to such individ-
law (whether statutory or recognized by the
uals concerning-
courts of the State) regarding advance direc-
(i) An individual's rights under State law
tives. The provider must inform individuals
(whether statutory or recognized by
that complaints concerning the advance direc-
the courts of the State) to make deci-
tive requirements may be filed with the State
sions concerning such medical care,
survey and certification agency;
including the right to accept or refuse
(5) Provide for education of staff concerning its
medical or surgical treatment and the
policies and procedures on advance direc-
right to formulate, at the individual's
tives; and
option, advance directives. Providers
(6) Provide for community education regarding
are permitted to contract with other
issues concerning advance directives that
entities to furnish this information but
may include material required in paragraph
are still legally responsible for ensuring
(a)(1) of this section, either directly or in con-
that the requirements of this section
cert with other providers and organizations.
are met. Providers are to update and
Separate community education materials may
disseminate amended information as
be developed and used, at the discretion of
soon as possible, but no later than 90
providers. The same written materials do not
days from the effective date of the
have to be provided in all settings, but the
changes to State law; and
material should define what constitutes an
(ii) The written policies of the provider or
advance directive, emphasizing that an
organization respecting the implemen-
advance directive is designed to enhance an
tation of such rights, including a clear
incapacitated individual's control over med-
and precise statement of limitation if the
ical treatment, and describe applicable State
provider cannot implement an advance
law concerning advance directives. A
for
Home
Care
provider must be able to document its com-
provider cannot implement an advance direc-
munity education efforts.
tive and State law allows any health care
(b) The information specified in paragraph (a) of this
provider or any agent of such provider to
section is furnished:
conscientiously object.
(1) In the case of a hospital, at the time of the
(d) Prepaid or eligible organizations (as specified in
individual's admission as an inpatient.
sections 1833(a)(1)(A) and 1876(b) of the Act)
(2) In the case of a skilled nursing facility at the
must meet the requirements specified in 417.436
time of the individual's admission as a resi-
of this chapter.
dent.
(e) If an adult individual is incapacitated at the time
(3) (i) In the case of a home health agency, in
of admission or at the start of care and is unable
advance of the individual coming under
to receive information (due to the incapacitating
the care of the agency. The HHA may fur-
conditions or a mental disorder) or articulate
nish advance directives information to a
whether or not he or she has executed an advance
patient at the time of the first home visit,
directive, then the provider may give advance
as long as the information is furnished
directive information to the individual's family or
before care is provided.
surrogate in the same manner that it issues other
(ii) In the case of personal care services, in
materials about policies and procedures to the fam-
advance of the individual coming under
ily of the incapacitated individual or to a surrogate
the care of the personal care services
or other concerned persons in accordance with
provider. The personal care provider may
State law. The provider is not relieved of its oblig-
furnish advance directives information
ation to provide this information to the individual
to a patient at the time of the first home
once he or she is no longer incapacitated or unable
visit, as long as the information is fur-
to receive such information. Follow-up procedures
nished before care is provided.
must be in place to provide the information to the
(4) In the case of a hospice program, at the time
individual directly at the appropriate time.
of initial receipt of hospice care by the indi-
157 FR 8203, Mar. 6, 1992, as amended at 59 FR 45403, Sept. 1, 1994;
vidual from the program.
60 FR 33294, June 27, 1995]
(c) The providers listed in paragraph (a) of this
section-
489.104 Effective dates.
(1) Are not required to provide care that con-
These provisions apply to services furnished on or after
flicts with an advance directive.
December 1, 1991 payments made under section
(2) Are not required to implement an advance
1833(a)(1)(A) of the Act on or after December 1, 1991, and
directive if, as a matter of conscience, the
contracts effective on or after December 1, 1991. Pt. 491
CHCE Resource Manual 11*247
CFR Part 493-Laboratory Requirements
42 CFR Part 493-Subpart A-General Provisions
SOURCE: 57 FR 7139, Feb. 28, 1992, unless otherwise noted.
Alternative sanctions means sanctions that may be
imposed in lieu of or in addition to principal sanctions.
493.1 Basis and scope.
The term is synonymous with "intermediate sanctions" as
This part sets forth the conditions that all laboratories
used in section 1846 of the Act.
must meet to be certified to perform testing on human
Analyte means a substance or constituent for which
specimens under the Clinical Laboratory Improvement
the laboratory conducts testing.
Amendments of 1988 (CLIA). It implements sections
Approved accreditation organization for laboratories
1861 (e) and (j), the sentence following section
means a private, nonprofit accreditation organization that
1861(s)(13), and 1902(a)(9) of the Social Security Act,
has formally applied for and received HCFA's approval
and section 353 of the Public Health Service Act. This
based on the organization's compliance with this part.
part applies to all laboratories as defined under "labo-
Approved State laboratory program means a licen-
ratory" in 493.2 of this part. This part also applies to lab-
sure or other regulatory program for laboratories in a
oratories seeking payment under the Medicare and
State, the requirements of which are imposed under State
Medicaid programs. The requirements are the same for
law, and the State laboratory program has received HCFA
Medicare approval as for CLIA certification.
approval based on the State's compliance with this part.
Authorized person means an individual authorized
493.2 Definitions.
under State law to order tests or receive test results, or both.
As used in this part, unless the context indicates otherwise
Challenge means, for quantitative tests, an assessment
Accredited institution means a school or program which-
of the amount of substance or analyte present or measured
(a) Admits as regular student only persons having a
in a sample. For qualitative tests, a challenge means the
certificate of graduation from a school providing
determination of the presence or the absence of an ana-
secondary education, or the recognized equiva-
lyte, organism, or substance in a sample.
lent of such certificate;
CLIA means the Clinical Laboratory Improvement
(b) Is legally authorized within the State to provide a
Amendments of 1988.
program of education beyond secondary education;
CLIA certificate means any of the following types of
(c) Provides an educational program for which it
certificates issued by HCFA or its agent:
awards a bachelor's degree or provides not less
(1) Certificate of compliance means a certificate
than a 2-year program which is acceptable
issued to a laboratory after an inspection that
toward such a degree, or provides an educa-
finds the laboratory to be in compliance with
tional program for which it awards a master's or
all applicable condition level requirements,
doctoral degree;
or reissued before the expiration date, pend-
(d) Is accredited by a nationally recognized accred-
ing an appeal, in accordance with 493.49,
iting agency or association.
when an inspection has found the laborato-
This definition includes any foreign institution of high-
ry to be out of compliance with one or more
er education that HHS or its designee determines meets
condition level requirements.
substantially equivalent requirements.
(2) Certificate for provider-performed microscopy
Accredited laboratory means a laboratory that has
(PPM) procedures means a certificate issued
voluntarily applied for and been accredited by a private,
or reissued before the expiration date, pend-
nonprofit accreditation organization approved by HCFA
ing an appeal, in accordance with 493.47, to
in accordance with this part;
a laboratory in which a physician, midlevel
Adverse action means the imposition of a principal
practitioner or dentist performs no tests other
or alternative sanction by HCFA.
than PPM procedures and, if desired, waived
ALJ stands for Administrative Law Judge.
tests listed in 493.15(c).
11.248
for
Home
Care
(3) Certificate of accreditation means a certificate
(3) Indicates that the problem has been resolved.
issued on the basis of the laboratory's accred-
Dentist means a doctor of dental medicine or doctor of
itation by an accreditation organization
dental surgery licensed by the State to practice dentistry
approved by HCFA (indicating that the lab-
within the State in which the laboratory is located.
oratory is deemed to meet applicable CLIA
Equivalency means that an accreditation organization's
requirements) or reissued before the expira-
or a State laboratory program's requirements, taken as a
tion date, pending an appeal, in accordance
whole, are equal to or more stringent than the CLIA
with 493.61, when a validation or complaint
requirements established by HCFA, taken as whole. It is
survey has found the laboratory to be non-
acceptable for an accreditation organization's or State
compliant with one or more CLIA conditions.
laboratory program's requirements to be organized dif-
(4) Certificate of registration or registration cer-
ferently or otherwise vary from the CLIA requirements,
tificate means a certificate issued or reissued
as long as
before the expiration date, pending an
(1) all of the requirements taken as a whole would
appeal, in accordance with 493.45, that
provide at least the same protection as the
enables the entity to conduct moderate or
CLIA requirements taken as a whole; and
high complexity laboratory testing or both
(2) a finding of noncompliance with respect to
until the entity is determined to be in com-
CLIA requirements taken as a whole would
pliance through a survey by HCFA or its
be matched by a finding of noncompliance
agent; or in accordance with 493.57 to an
with the accreditation or State requirements
entity that is accredited by an approved
taken as a whole.
accreditation organization.
HCFA agent means an entity with which HCFA arranges
(5) Certificate of waiver means a certificate issued
to inspect laboratories and assess laboratory activities
or reissued before the expiration date, pend-
against CLIA requirements and may be a State survey
ing an appeal, in accordance with 493.37, to
agency, a private, nonprofit organization other than an
a laboratory to perform only the waived tests
approved accreditation organization, a component of HHS,
listed at 493.15(c).
or any other governmental component HCFA approves for
CLIA-exempt laboratory means a laboratory that has
this purpose. In those instances where all of the labora-
been licensed or approved by a State where HCFA has
tories in a State are exempt from CLIA requirements, based
determined that the State has enacted laws relating to lab-
on the approval of a State's exemption request, the State
oratory requirements that are equal to or more stringent
survey agency is not the HCFA agent.
than CLIA requirements and the State licensure program
HHS means the Department of Health and Human
has been approved by HCFA in accordance with subpart
Services, or its designee.
E of this part.
Immediate jeopardy means a situation in which imme-
Condition level deficiency means noncompliance with
diate corrective action is necessary because the laborato-
one or more condition level requirements.
ry's noncompliance with one or more condition level
Condition level requirements means any of the
requirements has already caused, is causing, or is likely
requirements identified as "conditions" in subparts G
to cause, at any time, serious injury or harm, or death, to
through Q of this part.
individuals served by the laboratory or to the health or safe-
Credible allegation of compliance means a statement
ty of the general public. This term is synonymous with
or documentation that-
imminent and serious risk to human health and significant
(1) Is made by a representative of a laboratory
hazard to the public health.
that has a history of having maintained a com-
Intentional violation means knowing and willful non-
mitment to compliance and of taking cor-
compliance with any CLIA condition.
rective action when required;
Kit means all components of a test that are pack-
(2) Is realistic in terms of its being possible to
aged together.
accomplish the required corrective action
Laboratory means a facility for the biological, microbi-
between the date of the exit conference and
ological, serological, chemical, immunohematological,
the date of the allegation; and
hematological, biophysical, cytological, pathological, or
CHCE Resource Manual 11.249
other examination of materials derived from the human
Principal sanction means the suspension, limitation, or
body for the purpose of providing information for the
revocation of any type of CLIA certificate or the cancel-
diagnosis, prevention, or treatment of any disease or
lation of the laboratory's approval to receive Medicare
impairment of, or the assessment of the health of, human
payment for its services.
beings. These examinations also include procedures to
Prospective laboratory means a laboratory that is oper-
determine, measure, or otherwise describe the presence
ating under a registration certificate or is seeking any of
or absence of various substances or organisms in the
the three other types of CLIA certificates.
body. Facilities only collecting or preparing specimens
Rate of disparity means the percentage of sample vali-
(or both) or only serving as a mailing service and not per-
dation inspections for a specific accreditation organization
forming testing are not considered laboratories.
or State where HCFA, the State survey agency or other
Midlevel practitioner means a nurse midwife, nurse
HCFA agent finds noncompliance with one or more con-
practitioner, or physician assistant, licensed by the State
dition level requirements but no comparable deficiencies
within which the individual practices, if such licensing is
were cited by the accreditation organization or the State,
required in the State in which the laboratory is located.
and it is reasonable to conclude that the deficiencies were
Operator means the individual or group of individuals
present at the time of the most recent accreditation orga-
who oversee all facets of the operation of a laboratory and
nization or State licensure inspection.
who bear primary responsibility for the safety and relia-
EXAMPLE: Assume the State survey agency, HCFA or
bility of the results of all specimen testing performed in
other HCFA agent performs 200 sample validation inspec-
that laboratory. The term includes—
tions for laboratories accredited by a single accreditation
(1) A director of the laboratory if he or she meets
organization or licensed in an exempt State during a val-
the stated criteria; and
idation review period and finds that 60 of the 200 labo-
(2) The members of the board of directors and
ratories had one or more condition level requirements
the officers of a laboratory that is a small cor-
out of compliance. HCFA reviews the validation and
poration under subchapter S of the Internal
accreditation organization's or State's inspections of the val-
Revenue Code.
idated laboratories and determines that the State or accred-
Owner means any person who owns any interest in a
itation organization found comparable deficiencies in 22
laboratory except for an interest in a laboratory whose
of the 60 laboratories and it is reasonable to conclude
stock and/or securities are publicly traded. (That is e.g.,
that deficiencies were present in the remaining 38 labo-
the purchase of shares of stock or securities on the New
ratories at the time of the accreditation organization's or
York Stock Exchange in a corporation owning a labora-
State's inspection. Thirty-eight divided by 200 equals a 19
tory would not make a person an owner for the purpose
percent rate of disparity.
of this regulation.)
Referee laboratory means a laboratory currently in
Party means a laboratory affected by any of the enforce-
compliance with applicable CLIA requirements, that
ment procedures set forth in this subpart, by HCFA or the
has had a record of satisfactory proficiency testing per-
OIG, as appropriate.
formance for all testing events for at least one year for
Performance characteristic means a property of a test
a specific test, analyte, subspecialty, or specialty and
that is used to describe its quality, e.g., accuracy, preci-
has been designated by an HHS approved proficien-
sion, analytical sensitivity, analytical specificity, reportable
cy testing program as a referee laboratory for analyz-
range, reference range, etc.
ing proficiency testing specimens for the purpose of
Performance specification means a value or range of val-
determining the correct response for the specimens in
ues for a performance characteristic, established or veri-
a testing event for that specific test, analyte, subspe-
fied by the laboratory, that is used to describe the quali-
cialty, or specialty.
ty of patient test results.
Reference range means the range of test values
Physician means an individual with a doctor of medi-
expected for a designated population of individuals,
cine, doctor of osteopathy, or doctor of podiatric medi-
e.g., 95 percent of individuals that are presumed to be
cine degree who is licensed by the State to practice med-
healthy (or normal).
icine, osteopathy, or podiatry within the State in which
Sample in proficiency testing means the material con-
the laboratory is located.
tained in a vial, on a slide, or other unit that contains
11.250 National Association for Home Care
material to be tested by proficiency testing program par-
(1) Unsatisfactory performance for the same ana-
ticipants. When possible, samples are of human origin.
lyte in two consecutive or two out of three
State includes, for purposes of this part, each of the 50
testing events.
States, the District of Columbia, the Commonwealth of
(2) Repeated unsatisfactory overall testing event
Puerto Rico, the Virgin Islands and a political subdivision
scores for two consecutive or two out of
of a State where the State, acting pursuant to State law,
three testing events for the same specialty
has expressly delegated powers to the political subdivi-
or subspecialty.
sion sufficient to authorize the political subdivision to act
(3) An unsatisfactory testing event score for
for the State in enforcing requirements equal to or more
those subspecialties not graded by analyte
stringent than CLIA requirements.
(that is, bacteriology, mycobacteriology,
State licensure means the issuance of a license to, or the
virology, parasitology, mycology, blood
approval of, a laboratory by a State laboratory program
compatibility, immunohematology, or
as meeting standards for licensing or approval established
syphilis serology) for the same subspecial-
under State law.
ty for two consecutive or two out of three
State survey agency means the State health agency or
testing events.
other appropriate State or local agency that has an agree-
(4) Failure of a laboratory performing gyneco-
ment under section 1864 of the Social Security Act and is
logic cytology to meet the standard at 493.855.
used by HCFA to perform surveys and inspections.
Unsuccessful proficiency testing performance means a
Substantial allegation of noncompliance means a com-
failure to attain the minimum satisfactory score for an ana-
plaint from any of a variety of sources (including com-
lyte, test, subspecialty, or specialty for two consecutive or
plaints submitted in person, by telephone, through written
two of three consecutive testing events.
correspondence, or in newspaper or magazine articles)
Validation review period means the one year time
that, if substantiated, would have an impact on the health
period during which HCFA conducts validation inspec-
and safety of the general public or of individuals served by
tions and evaluates the results of the most recent sur-
a laboratory and raises doubts as to a laboratory's compli-
veys performed by an accreditation organization or
ance with any condition level requirement.
State laboratory program.
Target value for quantitative tests means either the mean
157 FR 7139, Feb. 28, 1992, as amended at 57 FR 7236, Feb. 28,
of all participant responses after removal of outliers (those
1992; 57 FR 34013, July 31, 1992; FR 5761, Aug. 11, 1992; 58
responses greater than 3 standard deviations from the
FR 5220, Jan. 19, 1993; 58 FR 48323, Sept. 15, 1993; 60 FR 20043,
original mean) or the mean established by definitive or ref-
Apr. 24, 1995]
erence methods acceptable for use in the National
Reference System for the Clinical Laboratory (NRSCL) by
493.3 Applicability.
the National Committee for the Clinical Laboratory
(a) Basic rule. Except as specified in paragraph (b)
Standards (NCCLS). In instances where definitive or ref-
of this section, a laboratory will be cited as out
erence methods are not available or a specific method's
of compliance with section 353 of the Public
results demonstrate bias that is not observed with actual
Health Service Act unless it -
patient specimens, as determined by a defensible scien-
(1) Has a current, unrevoked or unsuspended
tific protocol, a comparative method or a method group
certificate of waiver, registration certificate,
("peer" group) may be used. If the method group is less
certificate of compliance, certificate for PPM
than 10 participants, "target value" means the overall mean
procedures, or certificate of accreditation
after outlier removal (as defined above) unless accept-
issued by HHS applicable to the category of
able scientific reasons are available to indicate that such
examinations or procedures performed by
an evaluation is not appropriate.
the laboratory; or
Unsatisfactory proficiency testing performance means
(2) Is CLIA-exempt.
failure to attain the minimum satisfactory score for an ana-
(b) Exception. These rules do not apply to compo-
lyte, test, subspecialty, or specialty for a testing event.
nents or functions of -
Unsuccessful participation in proficiency testing means
(1) Any facility or component of a facility that
any of the following:
only performs testing for forensic purposes;
CHCE Resource Manual 11.251
(2) Research laboratories that test human spec-
(2) Employ methodologies that are so simple
imens but do not report patient specific results
and accurate as to render the likelihood of
for the diagnosis, prevention or treatment of
erroneous results negligible; or
any disease or impairment of, or the assess-
(3) Pose no reasonable risk of harm to the patient
ment of the health of individual patients; or
if the test is performed incorrectly.
(3) Laboratories certified by the National Institutes
(c) Certificate of waiver tests. A laboratory may qual-
on Drug Abuse (NIDA), in which drug testing
ify for a certificate of waiver under section 353
is performed which meets NIDA guidelines
of the PHS Act if it restricts the tests that it per-
and regulations. However, all other testing
forms to one or more of the following tests or
conducted by a NIDA-certified laboratory is
examinations (or additional tests added to this
subject to this rule.
list as provided under paragraph (d) of this sec-
(c) Federal laboratories. Laboratories under the juris-
tion) and no others:
diction of an agency of the Federal Government
(1) Dipstick or Tablet Reagent Urinalysis (non-
are subject to the rules of this part, except that the
automated) for the following:
Secretary may modify the application of such
(i) Bilirubin;
requirements as appropriate.
(ii) Glucose;
157 FR 7139, Feb. 28, 1992, as amended at 58 FR 5221, Jan. 19,
(iii) Hemoglobin;
1993; 60 FR 20043, Apr. 24, 1995/
(iv) Ketone;
(v) Leukocytes;
493.5 Categories of tests by complexity.
(vi) Nitrite;
(a) Laboratory tests are categorized as one of the
(vii)pH;
following:
(viii) Protein;
(1) Waived tests.
(ix) Specific gravity; and
(2) Tests of moderate complexity, including the
(x) Urobilinogen.
subcategory of PPM procedures.
(2) Fecal occult blood;
(3) Tests of high complexity.
(3) Ovulation tests - visual color comparison tests
(b) A laboratory may perform only waived tests,
for human luteinizing hormone;
only tests of moderate complexity, only PPM
(4) Urine pregnancy tests-visual color
procedures, only tests of high complexity or any
comparison tests;
combination of these tests.
(5) Erythrocyte sedimentation rate-non-
(c) Each laboratory must be either CLIA-exempt or
automated;
possess one of the following CLIA certificates, as
(6) Hemoglobin-copper sulfate-non-
defined in 493.2:
automated;
(1) Certificate of registration or registration
(7) Blood glucose by glucose monitoring devices
certificate.
cleared by the FDA specifically for home use;
(2) Certificate of waiver.
(8) Spun microhematocrit; and
(3) Certificate for PPM procedures.
(9) Hemoglobin by single analyte instruments
(4) Certificate of compliance.
with selfcontained or component features to
(5) Certificate of accreditation.
perform specimen/reagent interaction, pro-
160 FR 20043, Apr. 24, 1995]
viding direct measurement and readout.
(d) Revisions to criteria for test categorization and
493.15 Laboratories performing waived tests.
the list of waived tests. HHS will determine
(a) Requirement. Tests for certificate of waiver must
whether a laboratory test meets the criteria list-
meet the descriptive criteria specified in para-
ed under paragraph (b) of this section for a
graph (b) of this section.
waived test. Revisions to the list of waived tests
(b) Criteria. Test systems are simple laboratory exam-
approved by HHS will be published in the FED-
inations and procedures which -
ERAL REGISTER in a notice with opportunity
(1) Are cleared by FDA for home use;
for comment.
II*252 National Association for Home Care
(e) Laboratories eligible for a certificate of waiver
(ii) Score 3.
must-
(A) Specialized training is essential to
(1) Follow manufacturers' instructions for per-
perform the preanalytic, analytic or
forming the test; and
postanalytic testing process; or
(2) Meet the requirements in subpart B, Certificate
(B) Substantial experience may be nec-
of Waiver, of this part.
essary for analytic test performance.
157 FR 7139, Feb. 28, 1992, as amended at 58 FR 5221, Jan. 19, 1993/
(3) Reagents and materials preparation.
(i) Score 1.
493.17 Test categorization.
(A) Reagents and materials are generally
(a) Categorization by criteria. Notices will be pub-
stable and reliable; and
lished in the FEDERAL REGISTER which list each
(B) Reagents and materials are prepack-
specific test system, assay, and examination cat-
aged, or premeasured, or require no
egorized by complexity. Using the seven criteria
special handling, precautions or stor-
specified in this paragraph for categorizing tests
age conditions.
of moderate or high complexity, each specific
(ii) Score 3.
laboratory test system, assay, and examination
(A) Reagents and materials may be labile
will be graded for level of complexity by assign-
and may require special handling to
ing scores of 1, 2, or 3 within each criteria. The
assure reliability; or
score of "1" indicates the lowest level of com-
(B) Reagents and materials prepara-
plexity, and the score of "3" indicates the highest
tion may include manual steps
level. These scores will be totaled. Test systems,
such as gravimetric or volumetric
assays or examinations receiving scores of 12 or
measurements.
less will be categorized as moderate complexity,
(4) Characteristics of operational steps.
while those receiving scores above 12 will be cat-
(i) Score 1. Operational steps are either auto-
egorized as high complexity.
matically executed (such as pipetting,
NOTE: A score of "2" will be assigned to a crite-
temperature monitoring, or timing of
ria heading when the characteristics for a partic-
steps), or are easily controlled.
ular test are intermediate between the descrip-
(ii) Score 3. Operational steps in the test-
tions listed for scores of "1" and "3."
ing process require close monitoring
(1) Knowledge.
or control, and may require special
(i) Score 1.
specimen preparation, precise tem-
(A) Minimal scientific and technical
perature control or timing of proce-
knowledge is required to perform
dural steps, accurate pipetting, or
the test; and
extensive calculations.
(B) Knowledge required to perform the
(5) Calibration, quality control, and proficiency
test may be obtained through on-
testing materials.
the-job instruction.
(i) Score 1.
(ii) Score 3. Specialized scientific and tech-
(A) Calibration materials are stable and
nical knowledge is essential to perform
readily available;
preanalytic, analytic or postanalytic
(B) Quality control materials are stable
phases of the testing.
and readily available; and
(2) Training and experience.
(C) External proficiency testing materials,
(i) Score 1.
when available, are stable.
(A) Minimal training is required for pre-
(ii) Score 3.
analytic, analytic and postanalytic
(A) Calibration materials, if available,
phases of the testing process; and
may be labile;
(B) Limited experience is required to
(B) Quality control materials may be
perform the test.
labile, or not available; or
CHCE Resource Manual II-253
(C) External proficiency testing materials,
complexity category, notify the manu-
if available, may be labile.
facturers directly, and will simultaneous-
(6) Test system troubleshooting and equipment
ly inform both HCFA and CDC of the
maintenance.
device/test category. FDA will consult
(i) Score 1.
with CDC concerning test categorization
(A) Test system troubleshooting is auto-
in the following three situations:
matic or self-correcting, or clearly
(A) When categorizing previously uncat-
described or requires minimal judg-
egorized new technology;
ment; and
(B) When FDA determines it to be nec-
(B) Equipment maintenance is provid-
essary in cases involving a request
ed by the manufacturer, is seldom
for a change in categorization; and
needed, or can easily be performed.
(C) If a manufacturer requests review of
(ii) Score 3.
a categorization decision by FDA in
(A) Troubleshooting is not automatic
accordance with 21 CFR 10.75.
and requires decision-making and
(ii) Test categorization will be effective as of
direct intervention to resolve most
the notification to the applicant.
problems; or
(2) For test systems, assays, or examinations not
(B) Maintenance requires special knowl-
commercially available, a laboratory or pro-
edge, skills, and abilities.
fessional group may submit a written request
(7) Interpretation and judgment.
for categorization to PHS. These requests will
(i) Score 1.
be forwarded to CDC for evaluation; CDC
(A) Minimal interpretation and judgment
will determine complexity category and noti-
are required to perform preanalytic,
fy the applicant, HCFA, and FDA of the cat-
analytic and postanalytic processes;
egorization decision. In the case of request
and
for a change of category or for previously
(B) Resolution of problems requires lim-
uncategorized new technology, PHS will
ited independent interpretation and
receive the request application and forward
judgment; and
it to CDC for categorization.
(ii) Score 3.
(3) A request for recategorization will be accept-
(A) Extensive independent interpreta-
ed for review if it is based on new informa-
tion and judgment are required to
tion not previously submitted in a request
perform the preanalytic, analytic or
for categorization or recategorization by the
postanalytic processes; and
same applicant and will not be considered
(B) Resolution of problems requires
more frequently than once per year.
extensive interpretation and judgment.
(4) If a laboratory test system, assay or exami-
(b) Revisions to the criteria for categorization. The
nation does not appear on the lists of tests
Clinical Laboratory Improvement Advisory
in the FEDERAL REGISTER notices, it is con-
Committee, as defined in subpart T of this part,
sidered to be a test of high complexity until
will conduct reviews upon request of HHS and
PHS, upon request, reviews the matter and
recommend to HHS revisions to the criteria for
notifies the applicant of its decision. Test cat-
categorization of tests.
egorization is effective as of the notification
(c) Process for device/test categorization utilizing the
to the applicant.
scoring system under 493.17(a).
(5) PHS will publish revisions periodically to the
(1) (i) For new commercial test systems, assays,
list of moderate and high complexity tests in
or examinations, the manufacturer, as part
the FEDERAL REGISTER in a notice with
of its 510(k) and PMA application to FDA,
opportunity for comment.
will submit supporting data for device/test
157 FR 7139, Feb. 28, 1992, as amended at 58 FR 5222, Jan. 19,
categorization. FDA will determine the
1993/
11.254 National Association for Home Care
493.19 Provider-performed microscopy (PPM) pro-
presence or absence of bacteria, fungi, par-
cedures.
asites, and human cellular elements.
(a) Requirement. To be categorized as a PPM pro-
(2) All potassium hydroxide (KOH) preparations.
cedure, the procedure must meet the criteria spec-
(3) Pinworm examinations.
ified in paragraph (b) of this section.
(4) Fern tests.
(b) Criteria. Procedures must meet the following
(5) Post-coital direct, qualitative examinations of
specifications:
vaginal or cervical mucous.
(1) The examination must be personally per-
(6) Urine sediment examinations.
formed by one of the following practitioners:
(7) Nasal smears for granulocytes.
(i) A physician during the patient's visit on
(8) Fecal leukocyte examinations.
a specimen obtained from his or her own
(9) Qualitative semen analysis (limited to the
patient or from a patient of a group med-
presence or absence of sperm and detection
ical practice of which the physician is a
of motility).
member or an employee.
(d) Revisions to criteria and the list of PPM procedures.
(ii) A midlevel practitioner, under the super-
(1) The CLIAC conducts reviews upon HHS'
vision of a physician or in independent
request and recommends to HHS revisions to
practice only if authorized by the State,
the criteria for categorization of procedures.
during the patient's visit on a specimen
(2) HHS determines whether a laboratory pro-
obtained from his or her own patient or
cedure meets the criteria listed under para-
from a patient of a clinic, group medical
graph (b) of this section for a PPM proce-
practice, or other health care provider
dure. Revisions to the list of PPM procedures
of which the midlevel practitioner is a
proposed by HHS are published in the FED-
member or an employee.
ERAL REGISTER as a notice with an oppor-
(iii) A dentist during the patient's visit on a
tunity for public comment.
specimen obtained from his or her own
(e) Laboratory requirements. Laboratories eligible to
patient or from a patient of a group den-
perform PPM examinations must -
tal practice of which the dentist is a
(1) Meet the applicable requirements in subpart
member or an employee.
C or subpart D, and subparts F, H, J, K, M,
(2) The procedure must be categorized as mod-
and P of this part.
erately complex.
(2) Be subject to inspection as specified under
(3) The primary instrument for performing the
subpart Q of this part.
test is the microscope, limited to bright-field
160 FR 20044, Apr. 24, 1995]
or phase-contrast microscopy.
(4) The specimen is labile or delay in performing
493.20 Laboratories performing tests of moderate
the test could compromise the accuracy of the
complexity.
test result.
(a) A laboratory may qualify for a certificate to
(5) Control materials are not available to moni-
perform tests of moderate complexity provid-
tor the entire testing process.
ed that it restricts its test performance to waived
(6) Limited specimen handling or processing
tests or examinations and one or more tests or
is required.
examinations meeting criteria for tests of mod-
(c) Provider-performed microscopy (PPM) examina-
erate complexity including the subcategory of
tions. A laboratory may qualify to perform tests
PPM procedures.
under this section if it restricts PPM examinations
(b) A laboratory that performs tests or examinations of
to one or more of the following procedures (or
moderate complexity must meet the applicable
additional procedures added to this list as pro-
requirements in subpart C or subpart D, and sub-
vided under paragraph (d) of this section), waived
parts F, H, J, K, M, P, and Q of this part. Under a
tests and no others:
registration certificate or certificate of compliance,
(1) All direct wet mount preparations for the
laboratories also performing PPM procedures must
CHCE Resource Manual 11*255
meet the inspection requirements at 493.1777.
of subpart C or subpart D, and subparts F, H, J,
(c) If the laboratory also performs waived tests, com-
K, M, P, and Q of this part.
pliance with subparts H, J, K, M, and P of this part
(c) If the laboratory also performs tests of moderate
is not applicable to the waived tests. However,
complexity, the applicable requirements of sub-
the laboratory must comply with the require-
parts H, J, K, M, P, and Q of this part must be met.
ments in 493.15(e) and 493.1775.
Under a registration certificate or certificate of
160 FR 20044, Apr. 24, 1995]
compliance, PPM procedures must meet the
inspection requirements at 493.1777.
493.25 Laboratories performing tests of high
(d) If the laboratory also performs waived tests, the
complexity.
(a) A laboratory must obtain a certificate for tests of
requirements of subparts H, J, K, M, and P are not
high complexity if it performs one or more tests
applicable to the waived tests. However, the lab-
that meet the criteria for tests of high complexi-
oratory must comply with the requirements in
ty as specified in 493.17(a).
493.15(e) and 493.1775.
(b) A laboratory performing one or more tests of high
157 FR 7139, Feb. 28, 1992, as amended at 60 FR 20044, Apr. 24,
complexity must meet the applicable requirements
1995]
11.256 National Association for Home Care
42 CFR Part 493-Subpart B-Certificate of Waiver
SOURCE 57 FR 7142, Feb. 28, 1992, unless otherwise noted.
may run for quality control, quality assur-
ance or proficiency testing purposes;
493.35 Application for a certificate of waiver.
(ii) The methodologies for each laboratory
(a) Filing of application. Except as specified in
test procedure or examination per-
paragraph (b) of this section, a laboratory per-
formed, or both; and
forming only one or more waived tests listed
(iii) The qualifications (educational back-
in 493.15 must file a separate application for
ground, training, and experience) of the
each laboratory location.
personnel directing and supervising the
(b) Exceptions.
laboratory and performing the laboratory
(1) Laboratories that are not at a fixed location,
examinations and test procedures.
that is, laboratories that move from testing site
(d) Access requirements. Laboratories that perform
to testing site, such as mobile units providing
one or more waived tests listed in 493.15(c) and
laboratory testing, health screening fairs, or
no other tests must meet the following conditions:
other temporary testing locations may be cov-
(1) Make records available and submit reports
ered under the certificate of the designated pri-
to HHS as HHS may reasonably require to
mary site or home base, using its address.
determine compliance with this section
(2) Not-for-profit or Federal, State, or local
and 493.15(e);
government laboratories that engage in
(2) Agree to permit announced and unan-
limited (not more than a combination of 15
nounced inspections by HHS in accordance
moderately complex or waived tests per
with subpart Q of this part under the fol-
certificate) public health testing may file a
lowing circumstances:
single application.
(i) When HHS has substantive reason to
(3) Laboratories within a hospital that are locat-
believe that the laboratory is being
ed at contiguous buildings on the same cam-
operated in a manner that constitutes
pus and under common direction may file a
an imminent and serious risk to human
single application or multiple applications for
health.
the laboratory sites within the same physical
(ii) To evaluate complaints from the public.
location or street address.
(iii) On a random basis to determine
(c) Application format and contents. The applica-
whether the laboratory is performing
tion must-
tests not listed in 493.15.
(1) Be made to HHS or its designee on a form
(iv) To collect information regarding the
or forms prescribed by HHS;
appropriateness of waiver of tests list-
(2) Be signed by an owner, or by an authorized
ed in 493.15.(e) Denial of application.
representative of the laboratory who attests
If HHS determines that the application
that the laboratory will be operated in accor-
for a certificate of waiver is to be
dance with requirements established by the
denied, HHS will-
Secretary under section 353 of the PHS Act; and
(1) Provide the laboratory with a written state-
(3) Describe the characteristics of the laboratory
ment of the grounds on which the denial is
operation and the examinations and other
based and an opportunity for appeal, in
test procedures performed by the laboratory
accordance with the procedures set forth in
including-
subpart R of this part;
(i) The name and the total number of test
(2) Notify a laboratory that has its application for
procedures and examinations performed
a certificate of waiver denied that it cannot
annually (excluding tests the laboratory
operate as a laboratory under the PHS Act
CHCE Resource Manual 11.257
unless the denial is overturned at the con-
of waiver or reissued certificate of waiver until
clusion of the administrative appeals process
a decision is made by an administrative law
provided by subpart R; and
judge, as specified in subpart R of this part,
(3) Notify the laboratory that it is not eligible for
except when HHS finds that conditions at the
payment under the Medicare and Medicaid
laboratory pose an imminent and serious risk
programs.
to human health.
157 FR 7142, Feb. 28, 1992, as amended at 58 FR 5222, Jan. 19,
(3) For laboratories receiving payment from the
1993;60 FR 20044, Apr. 24, 1995]
Medicare or Medicaid program, such pay-
ments will be suspended on the effective date
493.37 Requirements for a certificate of waiver.
specified in the notice to the laboratory of a
(a) HHS will issue a certificate of waiver to a labora-
non-compliance determination even if there
tory only if the laboratory meets the requirements
has been no appeals decision issued.
of 493.35.
(f) A laboratory seeking to renew its certificate of
(b) Laboratories issued a certificate of waiver-
waivermust-
(1) Are subject to the requirements of this sub-
(1) Complete the renewal application prescribed
part and 493.15(e) of subpart A of this part;
by HHS and return it to HHS not less than 9
and
months nor more than 1 year before the expi-
(2) Must permit announced or unannounced
ration of the certificate; and
inspections by HHS in accordance with sub-
(2) Meet the requirements of 493.35 and 493.37.
part Q of this part.
(g) A laboratory with a certificate of waiver that
(c) Laboratories must remit the certificate of waiver
wishes to perform examinations or tests not
feespecified in subpart F of this part.
listed in the waiver test category must meet the
(d) In accordance with subpart R of this part, HHS will
requirements set forth in subpart C or subpart D
suspend or revoke or limit a laboratory's certifi-
of this part, as applicable.
cate of waiver for failure to comply with the
157 FR 7142, Feb. 28, 1992, as amended at 58 FR 5222, Jan. 19,
requirements of this subpart. In addition, failure
1993;60 FR 20045, Apr. 24, 1995]
to meet the requirements of this subpart will result
in suspension or denial of payments under
493.39 Notification requirements for laboratories
Medicare and Medicaid in accordance with sub-
issued a certificate of waiver.
part R of this part.
Laboratories performing one or more tests listed in
(e)
493.15 and no others must notify HHS or its designee-
(1) A certificate of waiver issued under this sub-
(a) Before performing and reporting results for any
part is valid for no more than 2 years. In the
test or examination that is not specified under
event of a non-compliance determination
493.15 for which the laboratory does not have the
resulting in HHS action to revoke, suspend,
appropriate certificate as required in subpart C or
or limit the laboratory's certificate of waiver,
subpart D of this part, as applicable; and
HHS will provide the laboratory with a state-
(b) Within 30 days of any change(s) in-
ment of grounds on which the determination
(1) Ownership;
of non-compliance is based and offer an
(2) Name;
opportunity for appeal as provided in sub-
(3) Location; or
part R of this part.
(4) Director.
(2) If the laboratory requests a hearing within the
157 FR 7142, Feb. 28, 1992, as amended at 60 FR 20045, Apr. 24,
time specified by HHS, it retains its certificate
1995/
11*258 National Association for Home Care
CFR Part 498-Appeals Procedures for
Determinations that Affect Participation
In the Medicare Program
42 CFR Part 498-Subpart A-General Provisions
498.1 [Amended] Statutory basis.
152 FR 22446, June 12, 1987, as amended at 59 FR 56251, Nov. 10,
[Amended by: 61 FR 32347-6/24/96-MEDICARE
1994]
AND MEDICAID PROGRAMS; PROVIDER APPEALS:
TECHNICAL AMENDMENTS]
498.2 [Amended] Definitions.
(a) Section 1869(c) of the Act provides for a hearing
[Amended by: 61 FR 32347-6/24/96-MEDICARE
and for judicial review of the hearing for any insti-
AND MEDICAID PROGRAMS; PROVIDER APPEALS:
tution or agency dissatisfied with a determination
TECHNICAL AMENDMENTS]
that it is not a provider, or with any determination
As used in this part-
described in section 1866(b)(2) of the Act.
Affected party means a provider, prospective provider,
(b) Section 1866(b)(2) of the Act lists determinations
supplier, prospective supplier, or practitioner that is affect-
that serve as a basis for termination of a provider
ed by an initial determination or by any subsequent deter-
mination or decision issued under this part, and "party"
agreement.
(c) Section 1128 (a) and (b) of the Act provide for
means the affected party or HCFA (or the OIG), as appro-
exclusion of certain individuals or entities because
priate. ALJ stands for Administrative Law Judge.
of conviction of crimes related to their participa-
Appeals Council or Council means the Appeals
Council of the Office of Hearings and Appeals of the Social
tion in Medicare.
Security Administration.
(d) Section 1156 of the Act establishes certain oblig-
OHA stands for the Social Security Administration's
ations for practitioners and providers of health
Office of Hearings and Appeals.
care services, and provides sanctions and penal-
OIG stands for the Department's Office of the
ties for those that fail to meet those obligations.
Inspector General.
(e) Section 1862(d) of the Act provides for the
Provider means a hospital, rural primary care hospi-
exclusion of individuals or entities that submit
tal (RPCH), skilled nursing facility (SNF), comprehensive
false claims, bill excessive charges or furnish
outpatient rehabilitation facility (CORF), home health
substandard care.
agency (HHA), or hospice, that has in effect an agree-
(f) HFCA is responsible for implementing section
ment to participate in Medicare, a nursing facility (NF), or
1869(c) of the Act, and section 1866 (b)(2), except
intermediate care facility for the mentally retarded (ICF/MR)
subparagraphs (D), (E), and (F). The OIG is respon-
that has in effect an agreement to participate in Medicaid,
sible for implementing the other cited sections.
or a clinic, rehabilitation agency, or public health agency
(g) Although sections 1866 and 1869 of the Act are
that has a similar agreement but only to furnish outpatient
silent regarding appeal rights for suppliers and
physical therapy or outpatient speech pathology services,
practitioners, the rules in this part include proce-
and "prospective provider" means any of the listed enti-
dures for review of determinations that affect
ties that seeks to participate in Medicare as a provider.
those two groups.
Supplier means an independent laboratory, supplier
(h) Section 1128A of the Act provides that HCFA will
of portable X-ray services, rural health clinic (RHC),
not collect a civil money penalty while a SNF or
Federally qualified health center (FQHC), ambulatory sur-
NF has a final administrative decision pending
gical center (ASC), organ procurement organization
on the noncompliance that led to the imposition
(OPO), or end-stage renal disease (ESRD) treatment facil-
of the civil money penalty.
ity that is approved by HCFA as meeting the conditions
CHCE Resource Manual 11.259
for coverage of its services, and prospective supplier
termination of a Federally qualified health
means any of the listed entities that seeks to be approved
center agreement in accordance with
for coverage of its services under Medicare.
405.2400 of this chapter.
(However, for purposes of the sanctions and penalties
(8) The cancellation of the approval of a Medicaid
that may be imposed by the OIG, the term supplier has
SNF or NF by HCFA under section 1910(b) of
the meaning specified in 1001.2 of this title.)
the Act.
152 FR 22446, June 12, 1987, as amended at 53 FR 6551, March 1,
(9) Whether, for purposes of rate setting and reim-
1988; 57 FR 24984, June 12, 1992; 58 FR 30677, May 26, 1993; 59
bursement, an ESRD treatment facility is con-
FR 6579, Feb. 11, 1994; 59 FR 56251, Nov. 10, 1994]
sidered to be hospitalbased or independent.
(10) Whether to deny payment under 409.19 or
498.3 [Amended] Scope and applicability.
409.64 of this chapter, pertaining to cardiac
[Amended by: 61 FR 32347-6/24/96-MEDICARE
pacemakers and the pacemaker registry.
AND MEDICAID PROGRAMS; PROVIDER APPEALS:
(11) Whether a hospital, skilled nursing facility,
TECHNICAL AMENDMENTS]
home health agency, or hospice program
(a) Scope. This part sets forth procedures for review-
meets or contimues to meet the advance
ing initial determinations that HCFA makes with
directives requirements specified in subpart
respect to the matters specified in paragraph (b)
I of part 489 of this chapter.
of this section and that the OIG makes with respect
(12) Except as provided at 498.3(d)(11) for SNFs
to matters specified in paragraph (c) of this section.
and NFs, the finding of noncompliance lead-
(b) Initial determinations by HCFA. HCFA makes
ing to the imposition of enforcement actions
initial determinations with respect to the fol-
specified in 488.406 of this chapter, but not
lowing matters:
the determination as to which remedy to
(1) Whether a prospective provider qualifies as
impose. The scope of review on the imposi-
a provider.
tion of a civil money penalty is specified in
(2) Whether an institution is a hospital qualified
488.438(e) of this chapter.
to elect to claim payment for all emergency
(13) The level of noncompliance found by
hospital services furnished in a calendar year.
HCFA in a SNF or NF only if a successful
(3) Whether an institution continues to remain in
challenge on this issue would affect the
compliance with the qualifications for claim-
range of civil money penalty amounts that
ing reimbursement for all emergency services
HCFA could collect.
furnished in a calendar year.
(c) Initial determinations by the OIG. The OIG
(4) Whether a prospective supplier meets the
makes initial determinations with respect to the
appropriate conditions for coverage of its ser-
following matters:
vices, as set forth in part 405 (subpart M, N,
(1) The termination of a provider agreement
Q, or U), part 416, part 485, subpart D, or part
in accordance with part 1001, subpart C of
491 of this chapter).
this title.
(5) Whether the services of a supplier continue
(2) The suspension, or exclusion from coverage
to meet the conditions for coverage.
and the denial of reimbursement for services
(6) Whether a physical therapist in independent
furnished by a provider, practitioner, or sup-
practice or a chiropractor meets the require-
plier, because of fraud or abuse, or convic-
ments for coverage of his or her services as
tion of crimes related to participation in the
set forth in subpart D of part 486 of this chap-
program, in accordance with part 1001, sub-
ter and 410.22 of this chapter, respectively.
part B of this title.
(7) Except for SNFs and NFs, the termination
(3) The imposition of sanctions in accordance
of a provider agreement in accordance with
with part 1004 of this title.
489.53 of this chapter, or the termination
(d) Administrative actions that are not initial deter-
of a rural health clinic agreement in accor-
minations. Administrative actions other than those
dance with 405.2404 of this chapter, or the
specified in paragraphs (b) and (c) of this section
11.260 National Association for Home Care
are not initial determinations and thus are not
(iii) Had previously been notified of its fail-
subject to this part.
ure to continue to comply.
Administrative actions that are not initial deter-
(8) The finding that the reason for the revocation
minations include, but are not limited to, the
of a supplier's right to accept assignment has
following:
not been removed or there is insufficient
(1) The finding that a provider or supplier deter-
assurance that the reason will not recur.
mined to be in compliance with the condi-
(9) The finding that a hospital accredited by the
tions of participation or the conditions for
Joint Commission on Accreditation of
coverage has deficiencies.
Hospitals or the American Osteopathic
(2) The finding that a prospective provider does
Association is not in compliance with a con-
not meet the conditions of participation set
dition of participation, and a finding that that
forth elsewhere in this chapter, if the prospec-
hospital is no longer deemed to meet the
tive provider is, nevertheless, approved for
conditions of participation.
participation in Medicare on the basis of spe-
(10) With respect to an SNF or NF that is not in
cial access certification, as provided in sub-
substantial compliance with the require-
part B of part 488 of this chapter.
ments, the finding that the SNF's or NF's defi-
(3) The refusal to enter into a provider agreement
ciencies pose immediate jeopardy to resi-
because the prospective provider is unable to
dents' health or safety, except as provided in
give satisfactory assurance of compliance with
paragraph (b)(13) of this section.
the requirements of title XVIII of the Act.
(11) For SNFs and NFs, the imposition of State
(4) The finding that an entity that had its
monitoring or loss of nurse aide training.
provider agreement terminated may not
(12) Except as provided in paragraph (b)(13) of this
file another agreement because the rea-
section, a determination by HCFA concerning
sons for terminating the previous agree-
the level of noncompliance in an SNF or NF.
ment have not been removed or there is
(13) The determination that the accreditation
insufficient assurance that the reasons for
requirements of a national accreditation orga-
the exclusion will not recur.
nization do not provide (or do not continue
(5) The determination not to reinstate a sus-
to provide) reasonable assurance that the
pended or excluded practitioner, provider,
entities accredited by the accreditation orga-
or supplier because the reason for the sus-
nization meet the applicable long-term care
pension or exclusion has not been removed,
requirements, conditions for coverage, con-
or there is insufficient assurance that the rea-
ditions of certification, conditions of partici-
son will not recur.
pation, or CLIA condition level requirements.
(6) The finding that the services of a laboratory
(14) The determination that requirements imposed
are covered as hospital services or as physi-
on a State's laboratories under the laws of
cian's services, rather than as services of an
that State do not provide (or do not contin-
independent laboratory, because the labora-
ue to provide) reasonable assurance that lab-
tory is not independent of the hospital or of
oratories licensed or approved by the State
the physician's office.
meet applicable CLIA requirements.
(7) The refusal to accept for filing an election to
(e) Exclusion of civil rights issues. The procedures in
claim payment for all emergency hospital ser-
this subpart do not apply to the adjudication of
vices furnished in a calendar year because
issues relating to a provider's compliance with
the institution-
civil rights requirements that are set forth in part
(i) Had previously charged an individual or
489 of this chapter. Those issues are handled
other person for services furnished dur-
through the Department's Office of Civil Rights.
ing that calendar year;
152 FR 22446, June 12, 1987, as amended at 52 FR 27765, July 23,
(ii) Submitted the election after the close of
1987; 53 FR 6551, March 1, 1988; 53 FR 6649, March 2, 1988; 54
that calendar year; or
FR 5373, Feb. 2, 1989; 56 FR 8854, Mar. 1, 1991; 56 FR 48879
CHCE Resource Manual 11.261
Sept. 26, 1991; 8204, Mar. 6, 1992; FR 34021, July 31, 1992;
(2) Suppliers and prospective suppliers do not
57 FR 43925, Sept. 23, 1992; 59 FR 56251, Nov. 10, 1994; 60 FR
have a right to judicial review except as pro-
2330, Jan. 9, 1995; 60 FR 50120, Sept. 28, 1995]
vided in paragraph (i) of this section.
(g) Appeal rights for certain practitioners. A physical
498.5 Appeal rights.
therapist in independent practice or a chiroprac-
(a) Appeal rights of prospective providers.
tor dissatisfied with a determination that he or she
(1) Any prospective provider dissatisfied with an
does not meet the requirements for coverage of his
initial determination or revised initial deter-
or her services has the same appeal rights as sup-
mination that it does not qualify as a provider
pliers have under paragraphs (d), (e) and (f) of
may request reconsideration in accordance
this section.
with 498.22(a).
(h) Appeal rights for nonparticipating hospitals that
(2) Any prospective provider dissatisfied with a
furnish emergency services. A nonparticipating
reconsidered determination under paragraph
hospital dissatisfied with a determination or deci-
(a)(1) of this section, or a revised reconsid-
sion that it does not qualify to elect to claim pay-
ered determination under 498.30, is entitled
ment for all emergency services furnished during
to a hearing before an ALJ.
a calendar year has the same appeal rights that
(b) Appeal rights of providers. Any provider dis-
providers have under paragraph (a), (b), and (c)
satisfied with an initial determination to ter-
of this section.
minate its provider agreement is entitled to a
(i) Appeal rights for suspended or excluded practi-
hearing before an ALJ.
tioners, providers, or suppliers.
(c) Appeal rights of providers and prospective
(1) Any practitioner, provider, or supplier who
providers. Any provider or prospective
has been suspended, or whose services have
provider dissatisfied with a hearing decision
been excluded from coverage in accordance
may request Appeals Council review and has
with 498.3(c)(2), or has been sanctioned in
a right to seek judicial review of the Council's
accordance with 498.3(c)(3), is entitled to a
decision.
hearing before an ALJ.
(d) Appeal rights of prospective suppliers.
(2) Any suspended or excluded practitioner,
(1) Any prospective supplier dissatisfied with an
provider, or supplier dissatisfied with a hear-
initial determination or a revised initial deter-
ing decision may request Departmental
mination that its services do not meet the
Appeals Board review and has a right to seek
conditions for coverage may request recon-
judicial review of the Board's decision by fil-
sideration in accordance with 498.22(a).
ing an action in Federal district court.
(2) Any prospective supplier dissatisfied with a
(j) Appeal rights for Medicaid ICFs/MR terminated
reconsidered determination under paragraph
by HCFA.
(d)(1) of this section, or a revised reconsid-
(1) Any Medicaid ICF/MR that has had its
ered determination under 498.30, is entitled
approval cancelled by HCFA in accordance
to a hearing before an ALJ.
with 498.3(b)(8) has a right to a hearing before
(e) Appeal rights of suppliers. Any supplier dissatis-
an ALJ, to request Departmental Appeals
fied with an initial determination that the services
Board review of the hearing decision, and to
subject to the determination no longer meet the
seek judicial review of the Board's decision.
conditions for coverage, is entitled to a hearing
(2) The Medicaid agreement remains in effect until
before an ALJ.
the period for requesting a hearing has expired
(f) Appeal rights of suppliers and prospective
or, if the facility requests a hearing, until a
suppliers.
hearing decision is issued, unless HCFA-
(1) Any supplier or prospective supplier dissat-
(i) Makes a written determination that con-
isfied with the hearing decision may request
tinuation of provider status for the SNF or
Departmental Appeals Board review of the
ICF constitutes an immediate and serious
ALJ's decision.
threat to the health and safety of patients
II.262 National Association for Home Care
and specifies the reasons for that deter-
498.13 Fees for services of representatives.
mination; and
Fees for any services performed on behalf of an affected
(ii) Certifies that the facility has been notified
party by an attorney appointed and qualified in accor-
of its deficiencies and has failed to correct
dance with 498.10 are not subject to the provisions of sec-
them.
tion 206 of Title II of the Act, which authorizes the Secretary
[52 FR 22446, June 12, 1987, as amended at 57 FR 43925, Sept. 23,
to specify or limit those fees.
1992; 59 FR 56252, Nov. 10, 1994]
498.15 Charge for transcripts.
498.10 Appointment of representatives.
A party that requests a transcript of prehearing or hear-
(a) An affected party may appoint as its representa-
ing proceedings or Council review must pay the actual or
tive anyone not disqualified or suspended from
estimated cost of preparing the transcript unless, for good
acting as a representative in proceedings before
cause shown by that party, the payment is waived by the
the Secretary or otherwise prohibited by law.
ALJ or the Appeals Council, as appropriate.
(b) If the representative appointed is not an attorney,
the party must file written notice of the appoint-
498.17 Filing of briefs with the ALJ or Appeals
ment with HCFA, the ALJ, or the Appeals Council.
Council, and opportunity for rebuttal.
(c) If the representative appointed is an attorney, the
(a) Filing of briefs and related documents. If a party
attorney's statement that he or she has the author-
files a brief or related document such as a writ-
ity to represent the party is sufficient.
ten argument, contention, suggested finding of
fact, conclusion of law, or any other written state-
498.11 Authority of representatives.
ment, it must submit an original and one copy to
(a) A representative appointed and qualified in accor-
the ALJ or the Appeals Council, as appropriate.
dance with 498.10 may, on behalf of the repre-
The material may be filed by mail or in person
sented party-
and must include a statement certifying that a
(1) Give and accept any notice or request perti-
copy has been furnished to the other party.
nent to the proceedings set forth in this part;
(b) Opportunity for rebuttal.
(2) Present evidence and allegations as to facts
(1) The other party will have 20 days from the
and law in any proceedings affecting that
date of mailing or personal service to submit
party to the same extent as the party; and
any rebuttal statement or additional evidence.
(3) Obtain information to the same extent as
If a party submits a rebuttal statement or addi-
the party.
tional evidence, it must file an original and
(b) A notice or request may be sent to the affect-
one copy with the ALJ or the Council and
ed party, to the party's representative, or to
furnish a copy to the other party.
both. A notice or request sent to the repre-
(2) The ALJ or the council will grant an oppor-
sentative has the same force and effect as if it
tunity to reply to the rebuttal statement only
had been sent to the party.
if the party shows good cause.
CHCE Resource Manual 11.263
42 CFR Part 498-Subpart B-Initial,
Reconsidered, and Revised Determinations
498.20 Notice and effect of initial determinations.
Part 405 Subpart X-for rural health clinics.
(a) Notice of initial determination.
Part 416-for ambulatory surgical centers.
(1) General rule. HCFA or the OIG, as appropri-
Part 489-for providers, when their provider
ate, mails notice of an initial determination to
agreements have been terminated.
the affected party, setting forth the basis or
Part 1001, Subpart B-for excluded or sus-
reasons for the determination, the effect of the
pended providers, suppliers, physicians, or
determination, and the party's right to recon-
practitioners.
sideration, if applicable, or to a hearing.
Part 1001, Subpart C-for providers, when
(2) Special rules: Independent laboratories and
their provider agreements are terminated by
suppliers of portable x-ray services. If HCFA
the OIG.
determines that an independent laboratory
Part 1004-for sanctioned providers and
or a supplier of portable x-ray services no
practitioners.
longer meets the conditions for coverage of
(b) Effect of initial determination. An initial determi-
some or all of its services, the notice-
nation is binding unless it is-
(i) Specifies an effective date of termination
(1) Reconsidered in accordance with 498.24;
of coverage that is at least 15 days after
(2) Reversed or modified by a hearing decision
the date of the notice;
in accordance with 498.78; or
(ii) Is also sent to physicians, hospitals, and
(3) Revised in accordance with 498.32 or 498.100.
other parties that might use the services
of the laboratory or supplier; and
498.22 Reconsideration.
(iii) In the case of laboratories, specifies the
(a) Right to reconsideration. HCFA reconsiders any
categories of laboratory tests that are no
initial determination that affects a prospective
longer covered.
provider or supplier, or a hospital seeking to qual-
(3) Special rules: Nonparticipating hospitals that
ify to claim payment for all emergency hospital
elect to claim payment for emergency ser-
services furnished in a calendar year, if the affect-
vices. If HCFA determines that a nonpartici-
ed party files a written request in accordance with
pating hospital no longer qualifies to elect to
paragraphs (b) and (c) of this section.
claim payment for all emergency services fur-
(None of the determinations made by the OIG are
nished in a calendar year, the notice-
subject to reconsideration.)
(i) States the calendar year to which the
(b) Request for reconsideration: Manner and timing.
determination applies;
The affected party specified in paragraph (a) of
(ii) Specifies an effective date that is at least
this section, if dissatisfied with the initial deter-
5 days after the date of the notice; and
mination may request reconsideration by filing
(iii) Specifies that the determination applies
the request-
to services furnished, in the specified cal-
(1) With HCFA or with the State survey agency;
endar year, to patients accepted (as inpa-
(2) Directly or through its legal representative or
tients or outpatients) on or after the effec-
other authorized official; and
tive date of the determination.
(3) Within 60 days from receipt of the notice of
(4) Other special rules. Additional rules pertain-
initial determination, unless the time is
ing, for example, to content and timing of
extended in accordance with paragraph (d)
notice, notice to the public and to other enti-
of this section. The date of receipt will be
ties, and time allowed for submittal of addi-
presumed to be 5 days after the date on the
tional information, are set forth elsewhere in
notice unless there is a showing that it was,
this chapter, as follows:
in fact, received earlier or later.
11.264 National Association for Home Care
(c) Content of request. The request for reconsidera-
on which the initial determination was based, the
tion must state the issues, or the findings of fact
evidence considered in making the initial deter-
with which the affected party disagrees, and the
mination, and any other written evidence sub-
reasons for disagreement.
mitted under paragraph (a) of this section, taking
(d) Extension of time to file a request for re-
into account facts relating to the status of the
consideration.
prospective provider or supplier subsequent to the
(1) If the affected party is unable to file the
initial determination; and
request within the 60 days specified in para-
(c) Makes a reconsidered determination, affirming
graph (b) of this section, it may file a written
or modifying the initial determination and the
request with HCFA, stating the reasons why
findings on which it was based.
the request was not filed timely.
(2) HCFA will extend the time for filing a request
498.25 Notice and effect of reconsidered deter-
for reconsideration if the affected party shows
mination.
good cause for missing the deadline.
(a) Notice.
(1) HCFA mails notice of a reconsidered deter-
498.23 Withdrawal of request for reconsideration.
mination to the affected party.
A request for reconsideration is considered withdrawn if
(2) The notice gives the reasons for the deter-
the requestor files a written withdrawal request before
mination.
HCFA mails the notice of reconsidered determination, and
(3) If the determination is adverse, the notice
HCFA approves the withdrawal request.
specifies the conditions or requirements of
law or regulations that the affected party fails
498.24 Reconsidered determination.
to meet, and informs the party of its right to
When a request for reconsideration has been properly
a hearing.
filed in accordance with 498.22, HCFA-
(b) Effect. A reconsidered determination is binding
(a) Receives written evidence and statements that are
unless—
relevant and material to the matters at issue and
(1) HCFA or the OIG, as appropriate, further
are submitted within a reasonable time after the
revises the revised determination; or
request for reconsideration;
(2) The revised determination is reversed or mod-
(b) Considers the initial determination, the findings
ified by a hearing decision.
CHCE Resource Manual 11.265
42 CFR Part 498-Subpart C-Reopening of
Initial or Reconsidered Determinations
498.30 Limitation on reopening.
(2) The notice of revised determination states the
An initial or reconsidered determination that a prospec-
basis or reason for the revised determination.
tive provider is a provider or that a hospital qualifies to
(3) If the determination is that a supplier or
elect to claim payment for all emergency services fur-
prospective supplier does not meet the con-
nished in a calendar year may not be reopened. HCFA or
ditions for coverage of its services, the notice
the OIG, as appropriate, may on its own initiative, reopen
specifies the conditions with respect to which
any other initial or reconsidered determination, within 12
the affected party fails to meet the require-
months after the date of notice of the initial determination.
ments of law and regulations, and informs
the party of its right to a hearing.
498.32 Notice and effect of reopening and revision.
(b) Effect. A revised determination is binding unless
(a) Notice.
(1) The affected party requests a hearing before
(1) HCFA or the OIG, as appropriate, gives the
an ALJ; or
affected party notice of reopening and of any
(2) HCFA or the OIG further revises the revised
revision of the reopened determination.
determination.
11.266 National Association for Home Care
42 CFR Part 498-Subpart D-Hearings
498.40 Request for hearing.
(c) As used in this part, "ALJ" includes a member or
(a) Manner and timing of request.
members of the Appeals Council who are desig-
(1) An affected party entitled to a hearing
nated to conduct a hearing.
under 498.5 may file a request for a hear-
ing with HCFA or the OIG, as appropriate,
498.45 Disqualification of Administrative Law
or with OHA.
Judge.
(2) The affected party or its legal representative or
(a) An ALJ may not conduct a hearing in a case in
other authorized official must file the request
which he or she is prejudiced or partial to the
in writing within 60 days from receipt of the
affected party or has any interest in the matter
notice of initial, reconsidered, or revised deter-
pending for decision.
mination unless that period is extended in
(b) A party that objects to the ALJ designated to con-
accordance with paragraph (c) of this section.
duct the hearing must give notice of its objec-
(Presumed date of receipt is determined in
tions at the earliest opportunity.
accordance with 498.22(b)(3)).
(c) The ALJ will consider the objections and decide
(b) Content of request for hearing. The request for
whether to withdraw or proceed with the hearing.
hearing must-
(1) If the ALJ withdraws, another will be desig-
(1) Identify the specific issues, and the findings
nated to conduct the hearing.
of fact and conclusions of law with which
(2) If the ALJ does not withdraw, the objecting
the affected party disagrees; and
party may, after the hearing, present its objec-
(2) Specify the basis for contending that the find-
tions to the Appeals Council as reasons for
ings and conclusions are incorrect.
changing, modifying, or reversing the ALJ's
(c) Extension of time for filing a request for hearing.
decision or providing a new hearing before
If the request was not filed within 60 days-
another ALJ.
(1) The affected party or its legal representative
or other authorized official may file with the
498.47 Prehearing conference.
ALJ a written request for extension of time
(a) At any time before the hearing, the ALJ may call
stating the reasons why the request was not
a prehearing conference for the purpose of
filed timely.
delineating the issues in controversy, identify-
(2) For good cause shown, the ALJ may extend
ing the evidence and witnesses to be present-
the time for filing the request for hearing.
ed at the hearing, and obtaining stipulations
accordingly.
498.42 Parties to the hearing.
(b) On the request of either party or on his or her own
The parties to the hearing are the affected party and HCFA
motion, the ALJ may adjourn the prehearing con-
or the OIG, as appropriate.
ference and reconvene at a later date.
498.44 Designation of hearing official.
498.48 Notice of prehearing conference.
(a) The Associate Commissioner for Hearings and
(a) Timing of notice. The ALJ will fix a time and place
Appeals, or his or her delegate designates an ALJ
for the prehearing conference and mail written
or a member or members of the Appeals Council
notice to the parties at least 10 days before the
to conduct the hearing.
scheduled date.
(b) If appropriate, the Associate Commissioner or the
(b) Content of notice. The notice will inform the par-
delegate may substitute another ALJ or another
ties of the purpose of the conference and speci-
member or other members of the Appeals Council
fy what issues are sought to be resolved, agreed
to conduct the hearing.
to, or excluded.
CHCE Resource Manual 11.267
(c) Additional issues. Issues other than those set forth
(3) After the 10 days have elapsed, the ALJ set-
in the notice of determination or the request for
tles the order.
hearing may be considered at the prehearing con-
(c) Effect of prehearing conference. The agreements
ference if
and stipulations entered into at the prehearing
(1) Either party gives timely notice to that effect
conference are binding on all parties, unless a
to the ALJ and the other party; or
party presents facts that, in the opinion of the
(2) The ALJ raises the issues in the notice of pre-
ALJ, would make an agreement unreasonable or
hearing conference or at the conference.
inequitable.
498.52 Time and place of hearing.
498.49 Conduct of prehearing conference.
(a) The ALJ fixes a time and place for the hearing and
(a) The prehearing conference is open to the affect-
gives the parties written notice at least 10 days
ed party or its representative, to the HCFA or OIG
before the scheduled date.
representatives and their technical advisors, and
(b) The notice informs the parties of the general and
to any other persons whose presence the ALJ
specific issues to be resolved at the hearing.
considers necessary or proper.
(b) The ALJ may accept the agreement of the parties
498.53 Change in time and place of hearing.
as to the following:
(a) The ALJ may change the time and place for the
(1) Facts that are not in controversy.
hearing either on his or her own initiative or at
(2) Questions that have been resolved favorably
the request of a party for good cause shown, or
to the affected party after the determination
may adjourn or postpone the hearing.
in dispute.
(b) The ALJ may reopen the hearing for receipt of
(3) Remaining issues to be resolved.
new evidence at any time before mailing the
(c) The ALJ may request the parties to indicate the
notice of hearing decision.
following:
(c) The ALJ gives the parties reasonable notice of
(1) The witnesses that will be present to testify
any change in time or place or any adjournment
at the hearing.
or reopening of the hearing.
(2) The qualifications of those witnesses.
(3) The nature of other evidence to be submit-
498.54 Joint hearings.
ted.
When two or more affected parties have requested hear-
ings and the same or substantially similar matters are at
498.50 Record, order, and effect of prehearing con-
issue, the ALJ may, if all parties agree, fix a single time and
ference.
place for the prehearing conference or hearing and con-
(a) Record of prehearing conference.
duct all proceedings jointly. If joint hearings are held, a
(1) A record is made of all agreements and stip-
single record of the preceedings is made and a separate
ulations entered into at the prehearing con-
decision issued with respect to each affected party.
ference.
(2) The record may be transcribed at the request
498.56 Hearing on new issues.
of either party or the ALJ.
(a) Basic rules.
(b) Order and opportunity to object.
(1) Within the time limits specified in paragraph
(1) The ALJ issues an order setting forth the
(b) of this section, the ALJ may, at the request
results of the prehearing conference, includ-
of either party, or on his or her own motion,
ing the agreements made by the parties as to
provide a hearing on new issues that impinge
facts not in controversy, the matters to be
on the rights of the affected party.
considered at the hearing, and the issues to
(2) The ALJ may consider new issues even if HCFA
be resolved.
or the OIG has not made initial or reconsid-
(2) Copies of the order are sent to all parties and
ered determinations on them, and even if they
the parties have 10 days to file objections to
arose after the request for hearing was filed or
the order.
after a prehearing conference.
II.268 National Association for Home Care
(3) The ALJ may give notice of hearing on new
152 FR 22446, June 12, 1987, as amended at 53 FR 31335, Aug. 18,
issues at any time after the hearing request is
1988]
filed and before the hearing record is closed.
(b) Time limits. The ALJ will not consider any issue
498.58 Subpoenas.
that arose on or after any of the following dates:
(a) Basis for issuance. The ALJ, upon his or her own
(1) The effective date of the termination of a
motion or at the request of a party, may issue
provider agreement.
subpoenas if they are reasonably necessary for the
(2) The date on which it is determined that a
full presentation of a case.
supplier no longer meets the conditions for
(b) Timing of request by a party. The party must file
coverage of its services.
a written request for a subpoena with the ALJ at
(3) The effective date of the notice to a hos-
least 5 days before the date set for the hearing.
pital of its failure to remain in compliance
(c) Content of request. The request must:
with the qualifications for claiming reim-
(1) Identify the witnesses or documents to be
bursement for all emergency services fur-
produced;
nished to Medicare beneficiaries during
(2) Describe their addresses or location with suf-
the calendar year.
ficient particularity to permit them to be
(4) The effective date of the suspension, or of the
found; and
exclusion from coverage of services furnished
(3) Specify the pertinent facts the party expects
by a suspended or excluded practitioner,
to establish by the witnesses or documents,
provider, or supplier.
and indicate why those facts could not be
(5) With respect to Medicaid SNFs or ICFs sur-
established without use of a subpoena.
veyed under section 1910(c) of the Act-
(d) Method of issuance. Subpoenas are issued in the
(i) The completion date of the survey or
name of the Secretary, who pays the cost of
resurvey that is the basis for a proposed
issuance and the fees and mileage of any sub-
cancellation of approval; or
poenaed witnesses.
(ii) If approval was cancelled before the
hearings, because of immediate and seri-
498.60 [Amended] Conduct of hearing.
ous threat to patient health and safety, the
[Amended by: 61 FR 32347-6/24/96-MEDICARE
effective date of cancellation.
AND MEDICAID PROGRAMS; PROVIDER APPEALS:
(c) Notice and conduct of hearing on new issues.
TECHNICAL AMENDMENTS]
(1) Unless the affected party waives its right to
(a) Participants in the hearing. The hearing is open
appear and present evidence, notice of the
to the parties and their representatives and tech-
time and place of hearing on any new issue
nical advisors, and to any other persons whose
will be given to the parties in accordance
presence the ALJ considers necessary or proper.
with 498.52.
(b) Hearing procedures.
(2) After giving notice, the ALJ will, except as
(1) The ALJ inquires fully into all of the matters
provided in paragraph (d) of this section,
at issue, and receives in evidence the testi-
proceed to hearing on new issues in the same
mony of witnesses and any documents that
manner as on an issue raised in the request
are relevant and material.
for hearing.
(2) If the ALJ believes that there is relevant
(d) Remand to HCFA or the OIG. At the request of
and material evidence available which has
either party, or on his or her own motion, in lieu
not been presented at the hearing, he may,
of a hearing under paragraph (c) of this sec-
at any time before mailing of notice of the
tion, the ALJ may remand the case to HCFA or
decision, reopen the hearing to receive
the OIG for consideration of the new issue and,
that evidence.
if appropriate, a determination. If necessary, the
(3) The ALJ decides the order in which the evi-
ALJ may direct HCFA or the OIG to return the
dence and the arguments of the parties are
case to the ALJ for further proceedings.
presented and the conduct of the hearing.
CHCE Resource Manual 11.269
498.61 [Amended] Evidence.
affected party or its representatives or other wit-
[Amended by: 61 FR 32347-6/24/96-MEDICARE
nesses is necessary to clarify the facts at issue.
AND MEDICAID PROGRAMS; PROVIDER APPEALS:
(2) HCFA or the OIG shows good cause for
TECHNICAL AMENDMENTS]
requiring the presentation of oral evidence.
(a) Evidence may be received at the hearing even
(c) Dismissal for failure to appear. If, despite the
though inadmissible under the rules of evidence
waiver, the ALJ sends notice of hearing and the
applicable to court procedure. The ALJ rules on the
affected party fails to appear, or to show good
admissibility of evidence.
cause for the failure, the ALJ will dismiss the
(b) In civil money penalty cases, HCFA's conclusions as
appeal in accordance with 498.69.
to a SNF's or NF's level of noncompliance must be
(d) Hearing without oral testimony. When there is
upheld unless clearly erroneous.
no oral testimony, the ALJ will-
159 FR 56252, Nov. 10, 1994]
(1) Make a record of the relevant written evi-
dence that was considered in making the
498.62 Witnesses.
determination being appealed, and of any
Witnesses at the hearing testify under oath or affirmation.
additional evidence submitted by the parties;
The representative of each party is permitted to examine
(2) Furnish to each party copies of the addition-
his or her own witnesses subject to interrogation by the
al evidence submitted by the other party; and
representative of the other party. The ALJ may ask any
(3) Give both parties a reasonable opportunity
questions that he or she deems necessary. The ALJ rules
for rebuttal.
upon any objection made by either party as to the pro-
(e) Handling of briefs and related statements. If the
priety of any question.
parties submit briefs or other written statements
of evidence or proposed findings of facts or con-
498.63 Oral and written summation.
clusions of law, those documents will be han-
The parties to a hearing are allowed a reasonable time to
dled in accordance with 498.17.
present oral summation and to file briefs or other written
statements of proposed findings of fact and conclusions
498.68 Dismissal of request for hearing.
of law. Copies of any briefs or other written statements
(a) The ALJ may, at any time before mailing the notice
must be sent in accordance with 498.17.
of the decision, dismiss a hearing request if a
party withdraws its request for a hearing or the
498.64 Record of hearing.
affected party asks that its request be dismissed.
A complete record of the proceedings at the hearing is
(b) An affected party may request a dismissal by fil-
made and transcribed in all cases.
ing a written notice with the ALJ.
498.66 Waiver of right to appear and present
498.69 Dismissal for abandonment.
evidence.
(a) The ALJ may dismiss a request for hearing if it is
(a) Waiver procedures.
abandoned by the party that requested it.
(1) If an affected party wishes to waive its right
(b) The ALJ may consider a request for hearing to be
to appear and present evidence at the hear-
abandoned if the party or its representative-
ing, it must file a written waiver with the ALJ.
(1) Fails to appear at the prehearing conference
(2) If the affected party wishes to withdraw a
or hearing without having previously shown
waiver, it may do so, for good cause, at any
good cause for not appearing; and
time before the ALJ mails notice of the hear-
(2) Fails to respond, within 10 days after the ALJ
ing decision.
sends a "show cause" notice, with a show-
(b) Effect of waiver. If the affected party waives the
ing of good cause.
right to appear and present evidence, the ALJ
need not conduct an oral hearing except in one
498.70 Dismissal for cause.
of the following circumstances:
On his or her own motion, or on the motion of a party to
(1) The ALJ believes that the testimony of the
the hearing, the ALJ may dismiss a hearing request either
11.270 National Association for Home Care
entirely or as to any stated issue, under any of the following
[Changes: 61 FR 32347-6/24/96-MEDICARE AND
circumstances:
MEDICAID PROGRAMS; PROVIDER APPEALS:
(a) Res judicata. There has been a previous deter-
TECHNICAL AMENDMENTS]
mination or decision with respect to the rights
(a) Timing, basis and content. As soon as practical
of the same affected party on the same facts
after the close of the hearing, the ALJ issues a
and law pertinent to the same issue or issues
written decision in the case. The decision is based
which has become final either by judicial affir-
on the evidence of record and contains separate
mance or, without judicial consideration,
numbered findings of fact and conclusions of law.
because the affected party did not timely
(b) Notice and effect. A copy of the decision is mailed
request reconsideration, hearing, or review, or
to the parties and is binding on them unless—
commence a civil action with respect to that
(1) A party requests review by the Appeals
determination or decision.
Council within the stated time period, and
(b) No right to hearing. The party requesting a hear-
the Council reviews the case;
ing is not a proper party or does not otherwise
(2) The Appeals Council denies the request for
have a right to a hearing.
review and the party seeks judicial review
(c) Hearing request not timely filed. The affected
by filing an action in a Federal district court;
party did not file a hearing request timely and
(3) The decision is revised by an ALJ or the
the time for filing has not been extended.
Appeals Council; or
498.71 Notice and effect of dismissal and right to
(4) The decision is a recommended decision
request review.
directed to the Council.
(a) Notice of the ALJ's dismissal action is mailed to
the parties. The notice advises the affected party
498.76 Removal of hearing to Appeals Council.
of its right to request that the dismissal be vacat-
(a) At any time before the ALJ receives oral testimo-
ed as provided in 498.72.
ny, the Council may remove to itself any pend-
(b) The dismissal of a request for hearing is bind-
ing request for a hearing.
ing unless it is vacated by the ALJ or the
(b) Notice of removal is mailed to each party.
Appeals Council.
(c) The Council conducts the hearing in accordance
with the rules that apply to ALJ hearings under
498.72 Vacating a dismissal of request for hearing.
this subpart.
An ALJ may vacate any dismissal of a request for hearing
498.78 Remand by the Administrative Law Judge.
if a party files a request to that effect within 60 days from
(a) If HCFA or the OIG requests remand, and the
receipt of the notice of dismissal and shows good cause
affected party concurs in writing or on the record,
for vacating the dismissal. (Date of receipt is determined
the ALJ may remand any case properly before
in accordance with 498.22(b)(3).)
him or her to HCFA or the OIG for a determina-
tion satisfactory to the affected party.
498.74 [Changes] Administrative Law Judge's
(b) The ALJ may remand at any time before notice
decision.
of hearing decision is mailed.
CHCE Resource Manual 11.271
42 CFR Part 498-Subpart E-Appeals Council Review
498.80 Right to request Appeals Council review of
(4) A previous determination or decision,
Administrative Law Judge's decision or dismissal.
based on the same facts and law, and
Either of the parties has a right to request Appeals Council
regarding the same issue, has become final
review of the ALJ's decision or dismissal order, and the par-
through judicial affirmance or because the
ties are so informed in the notice of the ALJ's action.
affected party failed to timely request
reconsideration, hearing, Council review,
498.82 Request for Appeals Council review.
or judicial review, as appropriate.
(a) Manner and time of filing.
(c) Effect of dismissal. The dismissal of a request for
(1) Any party that is dissatisfied with an ALJ's
Appeals Council review is binding and not subject
decision or dismissal of a hearing request,
to further review.
may file a written request for review by the
(d) Review panel. If the Council grants a request
Appeals Council.
for review of the ALJ's decision, the review
(2) The requesting party or its representative or
will be conducted by a panel of at least two
other authorized official must file the request
members of the Council, designated by the
with the OHA within 60 days from receipt of
Chairperson or Deputy Chairperson, and one
the notice of decision or dismissal, unless the
individual designated by the Secretary from
Council, for good cause shown by the
the US Public Health Service.
requesting party, extends the time for filing.
The rules set forth in 498.40(c) apply to exten-
498.85 Procedures before the Appeals Council on
sion of time for requesting Appeals Council
review.
review. (The date of receipt of notice is deter-
The parties are given, upon request, a reasonable oppor-
mined in accordance with 498.22(c)(3).)
tunity to file briefs or other written statements as to fact and
(b) Content of request for review. A request for
law, and to appear before the Appeals Council to present
review of an ALJ decision or dismissal must
evidence or oral arguments. Copies of any brief or other writ-
specify the issues, the findings of fact or con-
ten statement must be sent in accordance with 498.17.
clusions of law with which the party disagrees,
and the basis for contending that the findings
498.86 Evidence admissible on review.
and conclusions are incorrect.
(a) The Appeals Council may admit evidence into
the record in addition to the evidence introduced
498.83 Appeals Council action on request for
at the ALJ hearing, (or the documents considered
review.
by the ALJ if the hearing was waived), if the
(a) Request by HCFA or the OIG. The Appeals
Council considers that the additional evidence is
Council may dismiss, deny, or grant a request
relevant and material to an issue before it.
made by HCFA or the OIG for review of an ALJ
(b) If it appears to the Council that additional relevant
decision or dismissal.
evidence is available, the Council will require that
(b) Request by the affected party. The Council will grant
it be produced.
the affected party's request for review unless it dis-
(c) Before additional evidence is admitted into the
misses the request for one of the following reasons:
record-
(1) The affected party requests dismissal of its
(1) Notice is mailed to the parties (unless they
request for review.
have waived notice) stating that evidence will
(2) The affected party did not file timely or show
be received regarding specified issues; and
good cause for late filing.
(2) The parties are given a reasonable time to
(3) The affected party does not have a right
comment and to present other evidence per-
to review.
tinent to the specified issues.
II*272 National Association for Home Care
(d) If additional evidence is presented orally to the
(2) A copy of the Council's decision is mailed to
Council, a transcript is prepared and made avail-
each party.
able to any party upon request.
498.90 [Revised] Effect of Appeals Council decision.
498.88 Decision or remand by the Appeals Council.
[Revised: 61 FR 32347-6/24/96-MEDICARE AND
(a) When the Appeals Council reviews an ALJ's deci-
MEDICAID PROGRAMS; PROVIDER APPEALS:
sion or order of dismissal, or receives a case
TECHNICAL AMENDMENTS]
remanded by a court, the Council may either issue
(a) The decision of the Appeals Council is binding
a decision or remand the case to an ALJ for a
unless—
hearing and decision or a recommended deci-
(1) The affected party has a right to judicial
sion for final decision by the Council.
review and timely files a civil action in a dis-
(b) In a remanded case, the ALJ initiates addition-
trict court of the United States; or
al proceedings and takes other actions as
(2) The Council reopens and revises its decision
directed by the Council in its order of remand,
in accordance with 498.102.
and may take other action not inconsistent with
(b) (1) When HCFA imposes a civil money penalty
that order.
on a SNF or NF, the decision of the Appeals
(c) Upon completion of all action called for by the
Council is final upon issuance.
remand order and any other consistent action,
(2) Judicial review of an Appeals Council deci-
the ALJ promptly makes a decision or, as speci-
sion concerning the imposition of a civil
fied by the Council, certifies the case to the
money penalty on a SNF or NF is available in
Council with a recommended decision.
the appropriate United States Court of Appeals.
(d) The parties have 20 days from the date of a notice
(c) Section 498.5 specifies the circumstances under
of a recommended decision to submit to the
which an affected party has a right to seek judi-
Council any exception, objection, or comment
cial review.
on the findings of fact, conclusions of law, and
152 FR 22446, June 12, 1987, as amended at 60 FR 50120, Sept. 28,
recommended decision.
1995]
(e) After the 20-day period, the Council issues its
decision adopting, modifying or rejecting the ALJ's
498.95 Extension of time for seeking judicial
recommended decision.
review.
(f) If the Council does not remand the case to an ALJ,
(a) Any affected party that is dissatisfied with an
the following rules apply:
Appeals Council decision and is entitled to judi-
(1) The Council's decision-
cial review must commence civil action within
(i) Is based upon the evidence in the hear-
60 days from receipt of the notice of the Council's
ing record and any further evidence that
decision (as determined under 498.22(c)(3)),
the Council receives during its review;
unless the Council extends the time in accordance
(ii) Is in writing and contains separate num-
with paragraph (c) of this section.
bered findings of fact and conclusions
(b) The request for extension must be filed in writing
of law; and
with the Council before the 60-day period ends.
(iii) May modify, affirm, or reverse the ALJ's
(c) For good cause shown, the Council may extend
decision.
the time for commencing civil action.
CHCE Resource Manual #273
42 CFR Part 498-Subpart F-Reopening of Decisions Made by
Administrative Law Judges or the Appeals Council
498.100 Basis, timing, and authority for reopening
(ii) Grants opportunity to appear in the case
an ALJ or Council decision.
of a Council revision.
(a) Basis and timing for reopening. An ALJ of Appeals
(b) Basis for revised decision and right to review.
Council decision may be reopened, within 60
(1) If a revised decision is necessary, the ALJ or
days from the date of the notice of decision, upon
the Appeals Council, as appropriate, renders
the motion of the ALJ or the Council or upon the
it on the basis of the entire record.
petition of either party to the hearing.
(2) If the decision is revised by an ALJ, the
(b) Authority to reopen.
Appeals Council may review that revised deci-
(1) A decision of the Appeals Council may be
sion at the request of either party or on its
reopened only by the Appeals Council.
own motion.
(2) A decision of an ALJ may be reopened by that
ALJ, by another ALJ if that one is not avail-
498.103 Notice and effect of revised decision.
able, or by the Appeals Council. For purpos-
(a) Notice. The notice mailed to the parties states the
es of this paragraph, an ALJ is considered to
basis or reason for the revised decision and
be unavailable if the ALJ has died, terminated
informs them of their right to Appeals Council
employment, or been transferred to another
review of an ALJ revised decision, or to judicial
duty station, is on leave of absence, or is unable
review of a Council reviewed decision.
to conduct a hearing because of illness.
(b) Effect-
498.102 Revision of reopened decision.
(1) ALJ revised decision. An ALJ revised decision
(a) Revision based on new evidence. If a reopened
is binding unless it is reviewed by the Appeals
decision is to be revised on the basis of new evi-
Council.
dence that was not included in the record of that
(2) Appeals Council revised decision. A
decision, the ALJ or the Appeals Council-
Council revised decision is binding unless
(1) Notifies the parties of the proposed revi-
a party files a civil action in a district court
sion; and
of the United States within the time frames
(2) Unless the parties waive their right to hear-
specified in 498.95.CHAPTER V-OFFICE
ing or appearance-
OF INSPECTOR GENERAL-HEALTH
(i) Grants a hearing in the case of an ALJ
CARE, DEPARTMENT OF HEALTH AND
revision; and
HUMAN SERVICES
11*274 National Association for Home Care
Clinton Presidential Records
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This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
Professional Certification for
Home Care & Hospice Executives
NATIONAL HOME ASSOCIATION FOR HOME CARE
#
care
=
CERTIFIED
EXECUTIVE
HOME CARE UNIVERSITY CARE
®
Candidate
Information
Handbook
SEPTEMBER 1998
Sponsored by Home Care University, an affiliate of
The National Association for Home Care
519 C Street, NE
Washington, DC 20002
HOMECARE UNIVERSITY
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
Professional Certification for
Home Care & Hospice Executives
NATIONAL ASSME ASSOCIATION FOR HOME CARE
#
care
CERTIFIED
EXECUTIVE
HOME CARE UNIVERSITY CARE
®
Candidate
Information
Handbook
SEPTEMBER 1998
Sponsored by Home Care University, an affiliate of
The National Association for Home Care
519 C Street, NE
Washington, DC 20002
HOMECARE UNIVERSITY