Daily Rules, Proposed Rules, and Notices of the Federal Government


Centers for Medicare & Medicaid Services

42 CFR Part 416


RIN 0938-AL80

Medicare and Medicaid Programs; Ambulatory Surgical Centers, Conditions for Coverage

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
SUMMARY: This proposed rule would revise some of the existing conditions for coverage (CfCs) that ambulatory surgical centers must meet to participate in the Medicare and Medicaid programs. The proposed modifications are intended to update the existing CfCs to reflect current practice and set forth new requirements to promote and protect patient health and safety.
DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on October 30, 2007.
ADDRESSES: You may submit comments in one of four ways (no duplicates, please):

1.Electronically.You may submit electronic comments on specific issues in this regulation to on the link "Submit electronic comments on CMS regulations with an open comment period." (Attachments should be in Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft Word.)

2.By regular mail.You may mail written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services,Attention:CMS-3887-P,P.O. Box 8017,Baltimore, MD 21244-8017.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

3.By express or overnight mail.You may send written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services,Attention:CMS-3887-P,Mail Stop C4-26-05,7500 Security Boulevard,Baltimore, MD 21244-1850.

4.By hand or courier.If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to one of the following addresses. If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security Boulevard,Baltimore, MD 21244-1850.

(Because access to the interior of the HHH Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

Submission of comments on paperwork requirements.You may submit comments on this document's paperwork requirements by mailing your comments to the addresses provided at the end of the "Collection of Information Requirements" section in this document.

For information on viewing public comments, see the beginning of theSUPPLEMENTARY INFORMATIONsection.


Jacqueline Morgan, (410) 786-4282. Joan A. Brooks, (410) 786-5526. Steve Miller, (410) 786-6656. Rachael Weinstein, (410) 786-6775.


Submitting Comments:We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by referencing the file code CMS-3887-P and the specific “issue identifier” that precedes the section on which you choose to comment.

Inspection of Public Comments:All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: on the link “Electronic Comments on CMS Regulations” on that Web site to view public comments.

Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.

I. Background

[If you choose to comment on issues in this section, please include the caption “BACKGROUND” at the beginning of your comments.]

As the single largest payer for health care services in the United States, the Federal Government assumes a critical responsibility for the quality of care furnished under its programs. Historically, the Medicare program's quality assurance approach was focused on identifying health care entities that furnish poor quality care or that fail to meet minimum Federal standards. Overall, we have found that this problem-focused approach has had inherent limitations and does not necessarily translate into better care for patients. Ensuring quality through the enforcement of prescriptive health and safety standards alone has resulted in expending many of our resources on working with marginal providers, rather than stimulating broad-based improvements in quality of care.

Section 1832(a)(2)(F)(i) of the Social Security Act (the Act) specifies that an ASC must meet health, safety, and other requirements specified by the Secretary of Health and Human Services (HHS) (the Secretary) in regulation if it has an agreement in effect with the Secretary. Under the agreement, the ASC agrees to accept the standard overhead amount determined under section 1833(i)(2)(A) of the Act as full payment for services, and to accept an assignment described in section 1842(b)(3)(B)(ii) of the Act for payment for all services furnished by the ASC to enrolled individuals. The Secretary is responsible for ensuring that the CfCs and their enforcement are adequate to protect the health and safety of individuals treated by ASCs.

To implement the CfCs, we determine compliance through State survey agencies that conduct onsite inspections utilizing these requirements. ASCs may be deemed to meet Medicare standards if they are certified by one of the national accrediting organizations whose standards meet or exceed theCfCs. Currently, there are four Medicare approved national accreditation organizations: The Joint Commission; American Association for Accreditation of Ambulatory Surgical Facilities (AAAASF); Accreditation Association for Ambulatory Health Care (AAAHC); and the American Osteopathic Association (AOA).

The current ASC CfCs were originally published on August 5, 1982 (47 FR 34082), and, for the most part, these regulations have remained unchanged since that time. From 1990 to 2000, the number of ASCs participating in the Medicare program has increased at a rate of about 175 facilities a year. The total number of ASCs more than doubled from 1,197 to 2,966 during this ten year period, making ASCs one of the fastest growing facility types in the Medicare program. The annual volume of procedures performed on both Medicare and non-Medicare patients have also tripled. Currently, over 4,600 ASCs participate in the Medicare program.1 This growth is due in part to advances in medical technology that have produced additional surgical procedures that can be safely performed outside of a hospital setting and increased focus on patient health and safety and patient convenience. This shift has paved the way for increasing numbers of procedures to be performed in an ASC. We believe that the changes we are proposing will strengthen and modernize the CfCs to be more aligned with today's ASC health care industry standards.

1Only comprehensive rehabilitation facilities and rural health clinics have experienced a higher rate of growth. Office of Evaluations and Inspections (OEI) analysis of Part B Medicare data. See Office of Inspector General Quality Oversight of Ambulatory Surgical Centers Supplemental Report 1: The Role of Certification and Accreditation.

In addition, the recent transparency initiative directed by President Bush requires that more data be made available to all Americans as part of the Administration's commitment to make health care more affordable and accessible. In support of this initiative, we announced in August 2006 the release of Medicare payment information for 61 procedures performed in ASCs. The new information is available on our Web site at will help patients undergoing surgical procedures select the most appropriate setting for the delivery of high quality, efficient care. The information will show “Commonly Performed Procedures in ASCs,” and will contain charge and Medicare payment data for ASC facility costs for a limited number of services administered in States and counties. The data is broken down at the county, State and national level. Moreover, the CMS Web site at available to the public and ASC patients to get information about the Medicare and Medicaid programs, prescription drug coverage, and how to coordinate Medicare benefits with other health insurance programs. The Web site also includes information about filing a grievance or complaint.

Section 109 of Division B, Title I of the Tax Relief and Health Care Act of 2006 (Pub. L. 109-432) (TRHCA), Quality reporting for hospital outpatient services and ambulatory surgical center services, requires that the Secretary develop measures that are appropriate to determine the measurement of quality care (including medication errors) furnished by ASCs that reflect the consensus among affected parties. These measures, to the extent feasible and practicable, shall include measures set forth by one or more national consensus building entities. The Secretary is authorized to reduce the annual payment update for failure to report on the chosen quality measures. We expect Medicare beneficiaries to receive high quality surgical services and for that reason, we are proposing to include a Quality Assurance Performance Improvement Requirement (QAPI) as a new condition for coverage (§ 416.43). (See section II.B.2 of the preamble of this proposed rule for a more detailed discussion of the quality assurance improvement requirement.)

We are soliciting public comments on quality measures appropriate to ASCs. We are interested in public comments regarding the extent to which ASCs are currently utilizing quality measures, the data source for those measures (for example, claims data and chart abstraction), and the extent to which those data are maintained electronically. We are also interested in how the measures were developed and why they are appropriate to measure the care provided to Medicare patients in ASCS.

We have developed a patients' right condition that emphasizes an ASC's responsibility to respect and promote the rights of each ASC patient.

II. Provisions of the Proposed Regulation

[If you choose to comment on issues in this section, please include the caption “PROVISIONS” at the beginning of your comments.]

Eliciting quality health care for Federal beneficiaries from CMS-certified providers and suppliers requires taking advantage of continuing advances in the health care delivery field. As a result, we are revising the Medicare ASC requirements to focus on a patient-centered, outcome-oriented process that promotes patient care foremost, rather than a prescriptive, inflexible approach that penalizes providers of substandard care.

The conditions for coverage (CfCs) for ambulatory surgical centers (ASCs) were originally issued in 1982. Most of the revisions made since then have been payment related. Since 1982, significant innovations in ASC patient care delivery and quality assessment practices have emerged. In an effort to ensure continued quality in the ASC setting, we are proposing to revise three of the existing conditions and create three new conditions. The proposed revised conditions are: Governing body and management; Evaluation of quality (renamed Quality Assessment and Performance Improvement (QAPI); and Laboratory and radiologic services. The proposed new conditions are: Patient rights; Infection control; and Patient admission, assessment and discharge. Our objective is to achieve a balanced regulatory approach by ensuring that an ASC furnishes health care that meets essential health and quality standards, while ensuring that it monitors and improves its own performance.

To achieve this objective, we are working to revise not only the ASC requirements but the requirements for other major health care provider types, such as hospitals, home health agencies and end-stage renal disease facilities, through separate rules. All of the revised and new requirements are directed towards improving patient outcomes of care and satisfaction.

A. Definitions (§ 416.2)

Existing § 416.2 sets forth definitions for terms used in the ASC CfCs. We are proposing to revise the definition of “Ambulatory surgical center (ASC).” Also, we are proposing to add the definition for “overnight stay.”

The ASC definition would read as follows:

Ambulatory surgical center or ASCwould mean any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring an overnight stay following the surgical services, has an agreement with CMS to participate in Medicare as an ASC, and meets the conditions set forth in subparts B and C of this part.

The overnight stay definition would read as follows:

Overnight stay,for purposes of the ASC CfCs, would mean the patient'srecovery requires active monitoring by qualified medical personnel, regardless of whether it is provided in the ASC, beyond 11:59 p.m. of the day on which the surgical procedure was performed.

To provide further clarification on the overnight stay definition, we are proposing to use the 11:59 p.m. threshold as the standard for determining a patient's status when receiving services in an ASC facility. In the Medicare cost reporting manual (Provider Reimbursement Manual, Part 1, Section 2205 (Medicare Patient Days, page 22-16)), we have defined a hospital inpatient day as beginning at midnight and ending 24 hours later. Consistent with this longstanding policy, we would codify in regulations that any patient whose recovery requires active monitoring by qualified personnel beyond 11:59 p.m. of the day on which the surgical procedure was performed, is a patient who may require hospitalization or more intensive care. Accordingly, ASCs that are Medicare-certified may not keep patients beyond 11:59 p.m. of the day on which the surgical procedure was performed.

The Medicare Hospital Outpatient Prospective Payment System and CY 2007 Payment Rates proposed and final rules (71 FR 49506 and 71 FR 67960) address the denial of payment of an ASC facility fee for any procedure for which prevailing medical practice dictates that the beneficiary will typically be expected to require active medical monitoring and care at midnight following the procedure. We also note that the patient's location at midnight is a generally accepted standard for determining his or her status as a hospital inpatient or skilled nursing facility patient and as such, it is reasonable to apply the same standard in the ASC setting.

B. Specific Conditions for Coverage

We are proposing to retain many current requirements because they still reflect current practice and are predictive of ensuring desired outcomes and preventing harmful outcomes.

The changes we are proposing to the current CfCs are the result of three main considerations.

First, we considered the suggestions put forth in a February 2002 report by the HHS Office of Inspector General (OIG) entitled,Quality Oversight of Ambulatory Surgical Centers; A System in Neglect [Janet Rehnquist, Inspector General, OEI-01-00-00450].The report provided two recommendations specifically related to ASC patient health and safety. It recommended updating the CfCs to include patient rights and quality improvement. It also recommended that the CfCs be written in a manner that takes into consideration the scope and severity of the different types of surgical procedures, thereby establishing varied sets of requirements to which ASCs would be accountable.

In response to the suggestions in the OIG report, we are proposing to replace the current Evaluation of Quality requirement with a new QAPI requirement and are proposing to add a new Patient Rights requirement. However, from both a policy perspective and an operational perspective, we are unable to propose different sets of ASC CfCs that are based on the scope of severity of the procedures offered by an ASC. Since ASCs are free to host a wide range of surgical procedures, enforcement of a variety of sets of requirements based on the type of procedures provided would be difficult to implement, since this would demand changes in the type and frequency of State agency oversight. In addition, ASCs wishing to upgrade their certification (if the regulations were approached as a tiered system) would require recertification and add additional oversight burden to the State agencies. This would continue to impact available resources. However, we would expect each ASC's QAPI program to reflect the scope and severity of the surgical services they perform.

Second, we received feedback from the various ASC stakeholders that attended a 1996 Town Hall meeting sponsored by CMS. Recommendations were overwhelmingly directed toward payment issues, updating CPT codes, coverage of specific procedures, and reclassification of the procedure codes. However, a number of the commenters did favor incorporating a QAPI program in place of the existing requirement at § 416.43 (Evaluation of quality) since most ASCs had already implemented a quality assurance performance improvement program as the standard of practice.

Third, this proposed rule is part of a larger CMS effort to bring about improvements in the quality of care furnished to Medicare and Medicaid beneficiaries through an outcome-oriented approach. The existing ASC CfCs do not, in any practical manner, address patient rights or a way to incorporate a quality assessment program that will assist ASCs in managing patient care more effectively. Accordingly, in light of such concerns, we would revise the CfCs to include a QAPI program and patient rights requirement.

1. Condition for Coverage—Governing Body and Management (§ 416.41)

The current regulation contains a condition for Governing Body and Management. We are proposing new language in the condition statement which would require the governing body to assume direct oversight and accountability for the QAPI program. The governing body would be responsible for ensuring that QAPI efforts, at a minimum, focus on identifying areas needing improvement and that QAPI is implemented in accordance with § 416.43 of this part. Specific governing body QAPI responsibilities are detailed in the proposed QAPI requirement at § 416.43. By focusing on QAPI, ASC management would be expected to be better able to improve care being furnished to patients. We are also proposing that the governing body be responsible for creating and maintaining a disaster preparedness plan. In addition, we are proposing to retain the current requirement which provides that the ASC can contract for services with an outside resource. However, we propose to incorporate this language into a separate standard, located at § 416.41(a). The ASC's governing body would still be responsible for the services that are furnished.

The standard on hospitalization will remain the same but has been separated into two subparts for purposes of State agency survey findings. This would enable State surveyors to cite an ASC's compliance with these requirements more precisely. All ASCs will still be required to transfer patients requiring emergency medical care beyond the capabilities of the ASC to the nearest local, Medicare-participating hospital or a local, non-participating hospital that meets the requirements for payment for emergency services under § 482.2 of this chapter. Moreover, the definition of local hospital would require the ASC to consider the most appropriate facility to which the ASC would transport its patients in the event of an emergency. If the closest hospital could not accommodate the patient population or the predominant medical emergencies associated with the types of surgeries performed by the ASC, a more distant hospital might also meet the local definition. Regardless of any business issues that arise between ASCs and their local hospital, the ASC would be required to transfer patients to the nearest, most appropriate local hospital, since this would affect patient health. Any transfers that do not meet the requirements of proposed § 416.41(b)(1) and (2) would be determined to be outof compliance with Medicare regulations.

Lastly, we are also proposing the addition of a disaster preparedness standard at § 416.41(c). In response to the problems affecting health care facilities across much of the Gulf Coast region in September 2005 as a result of Hurricane Katrina, we are proposing this requirement to ensure the health and safety of patients and staff members alike. The ASC's governing Body, as part of the ASC leadership component, would be responsible for maintaining a written disaster preparedness plan that would provide for the emergency care of patients in the event of fire, natural disaster, functional failure of equipment, or other unexpected events or circumstances that threaten the health and/or safety of its patients and staff members. We recommend ASCs coordinate the plan with their State and local agencies, as appropriate. In an effort to achieve successful outcomes in a real-life disaster emergency, we are proposing at § 416.41(c)(3), that ASCs conduct annual drills for effectiveness. The ASC would then also be required to complete a written evaluation of every disaster drill and immediately implement any corrections to the plan.

2. Condition for Coverage—Quality Assessment and Performance Improvement (§ 416.43)

The existing “Evaluation of quality” requirement found at § 416.43, relies on a problem-oriented, reactive approach and primarily focuses on ASC self-assessment and evaluation of the procedures already performed and appropriateness of care issues. However, during the last decade, the health care industry has moved beyond the problem-oriented approach of monitoring quality assurance to an approach that addresses quality improvement prospectively through focused projects designed to reduce errors and address omissions of carebeforepatients are adversely affected. We have already introduced the QAPI philosophy to the hospital, hospice and end stage renal disease facility programs either through a final regulation or a proposed rule. To raise the performance expectations for ASCs seeking entrance into the Medicare program, as well as the expectations of those ASCs already participating in Medicare, we are proposing that each ASC also develop, implement, and maintain an effective QAPI program. Our aim is to support the development of patient-centered, outcome-oriented efforts that focus on patient health and safety. An ASC QAPI program would be designed to stimulate the ASC to constantly monitor and improve its own performance, and to be responsive to the needs, desires, and satisfaction levels of the patients it serves. With an effective QAPI program in place, the ASC would be better able to identify and reinforce the activities it is doing well, identify activities that are leading to poor patient outcomes, and take actions to improve performance. The ASC would be expected to take whatever actions are necessary to implement improvements in its performance as identified through its QAPI program. We are also proposing to change the CfC title from “Evaluation of quality” to “Quality assessment and performance improvement.”

In proposed § 416.43(a), Program scope, we are proposing that the ASC's QAPI program must include, but not be limited to, an ongoing program that demonstrates measurable improvement in patient health outcomes, and improves patient safety by using quality indicators or performance measures associated with improved health outcomes and with the identification of medical errors. Although ASCs may certainly develop their own QAPI program, we encourage them to be open to considering QAPI programs in use by other health care entities since QAPI programs in general contain the same basic elements.

Monitoring care in an ASC can be challenging since the typical patient may be seen for only one visit. Therefore, it is critically important that an ASC's QAPI program identify high-risk areas and areas of problematic care and conduct follow-up analysis in a timely manner to identify specific areas in need of improvement. The ASC would be expected to measure, analyze and track quality indicators, including adverse patient events, infection control and other aspects of performance that include processes of care and services furnished in the ASC. Once a problem is identified, we would expect the ASC to establish and implement a plan to correct all deficiencies. We would expect the ASC to track its improvement and compliance over time to determine, in part, if its corrective actions were effective. Because staff members are in a unique position to provide the ASC with structured feedback on its performance and suggestions on how performance can be improved, we would expect the ASC to utilize staff in conducting its QAPI program. An ASC that decided to utilize an outside resource to conduct its QAPI program would still need to have its staff involved in the process.

In proposed § 416.43(b), Program data, we would require the ASC to utilize quality indicator data to monitor the effectiveness and safety of services, and identify opportunities for improving the ASC's services. Where an ASC professional organization has made QAPI-related programs available to ASCs, we believe an ASC should consider exploring the feasibility of using such applicable programs to meet its needs. We would encourage ASCs to use a wide variety of information and data, in addition to their own findings, to guide improvement efforts. This information could include material available from national accrediting and other ASC organizations such as the AAAASF, the AAAHC, The Joint Commission, and the AOA. Many organizations offer a variety of quality improvement-related services such as benchmarking, quality indicators and quality assurance instructions. For example, the AAAHC offers information on the AAAHC Institute for Quality Improvement at its Web site, made available by these organizations and others could provide an opportunity for an ASC to learn about and be more involved in clinical quality performance measurement.

We are not proposing that an ASC utilize specific quality indicators or collect specific data. An ASC could utilize existing resources or incorporate information from an existing QAPI program developed by other organizations, to potentially elicit a greater degree of insight into how to improve the quality of its services and patient satisfaction rather than developing a totally new program. An ASC would be free to develop programs that meet its individual needs and, in some cases, might benefit from an internally developed process. Regardless of what type of quality improvement program is chosen, we would require that the governing body approve the program. Since ASCs are currently required to “conduct an ongoing, comprehensive self-assessment of the quality of care provided * * *” under the current evaluation of quality measurement requirement at § 416.43, we do not believe ASCs will experience a protracted or difficult transition period.

At proposed § 416.43(c)(1), Program activities, we propose to require that the ASC set priorities for its performance improvement activities that: (1) Focus on high risk, high volume and problem-prone areas; (2) consider the incidence, prevalence and severity of identified problems; and (3) give priority to improvement activities that affect health outcomes, patient safety and quality of care. We expect an ASC would take immediate action to resolve anyidentified problems that directly or potentially threaten the care and safety of patients. For example, patients with minimal support at home, surgery on patients with concurrent health issues, and those whose diagnosis and care may be unique to the ASC, could be the subject of more intense QAPI activity. Prioritizing areas of improvement would be essential for the ASC to gain a strategic view of its operating environment and to ensure a consistent quality of care provided over time.

At § 416.43(c)(2), we are proposing that the ASC track adverse patient events, examine their causes, implement improvements aimed at preventing a reoccurrence of the adverse events and ensure that those improvements are sustained over time. We have not proposed specific methods that ASCs would be required to use in implementing these actions. ASCs would be free to choose methods that are compatible with their operations. ASCs would be expected to view their staff as partners in the quality improvement process. As a follow-up requirement to tracking adverse patient events, we are proposing at § 416.43(c)(3) that ASCs would implement preventive strategies throughout the facility targeting any adverse patient events and ensuring all staff members are familiar with these strategies for improvement.

At § 416.43(d), Performance improvement projects, we are proposing the number and scope of improvement projects conducted annually must reflect the scope and complexity of the ASC's services and operations. For example, we would expect that where endoscopy services constitute the majority of an ASC's services, performance projects related to endoscopic procedures, issues, and follow-up care would be implemented. The ASC would be expected to fully document the projects that are being conducted, and documentation, at the very least, would be expected to include the reason(s) for implementing the project, and a description of the results of the project. Through meaningful data collection and analysis of adverse patient events and outcomes, an ASC would be able to determine how best to select projects that coincide with its existing nature and operations.

We are proposing at § 416.43(e), Governing body responsibilities, that the ASC's governing body would be responsible and accountable for ensuring that:

• The ongoing QAPI program is defined, implemented and maintained;

• The program addresses priorities and that all improvements are evaluated for effectiveness;

• The QAPI data collection methods, frequency and details are appropriate;

• Safety expectations are established; and

• Adequate resources are allocated for implementing the facility's QAPI program.

Any long-term program would require acceptance and direction from an organization's leadership in order to be successfully implemented, thus the ASC governing body's role would be critical to QAPI success. Once an improvement plan is developed and implemented, the ASC must track its progress to determine its effectiveness. The ASC governing body is responsible for assuring that the plan is carried out and that documentation can support the effort. If documentation is not available, selected requirements would be marked deficient at the time of a State survey. We would expect the governing body to be involved in the QAPI process. With an effective QAPI program in place and operating properly, the ASC could better identify and reinforce the activities it is doing well, identify activities that lead to poor patient outcomes, and take actions to improve performance.

3. Condition for Coverage—Laboratory and Radiologic Services (§ 416.49)

The current CfC Laboratory and radiologic services, located at § 416.49, would require laboratory and radiological services to be provided by certified facilities, regardless of whether the ASC performs the services or if the services are referred out to another facility.

In § 416.49, we would divide the current condition into two separate standards: Laboratory and radiologic services; in addition, we are proposing the expansion of the radiologic services requirement. The laboratory standard requirements would not change.

The proposed changes to the radiologic services standard would parallel the current laboratory standard by including requirements that the ASC would be required to meet, if applicable, when providing services directly or under arrangement.

The requirement at § 416.49(b)(1) is part of the current laboratory and radiologic services condition and the language would remain unchanged. The proposed language at § 416.49(b)(2) would require the ASC to meet the requirements of the CfCs for portable x-ray suppliers found at § 486.100 through § 486.110 of this chapter if it is furnishing these services directly. We have also proposed that radiologic services furnished under arrangement would be performed by an entity that was certified by Medicare as a supplier of portable x-ray services by meeting the Medicare CfCs for portable x-ray services. This change would better ensure that high quality radiologic services are available to ASC patients.

4. Condition for Coverage—Patient Rights (§ 416.50)

This proposed new requirement would require ASCs to notify patients of their rights, provide for the exercise of rights, establish the right of privacy and safety, and maintain the confidentiality of clinical records. Although the number of surgical procedures performed in ASCs continues to grow (for example, from 1990 to 2000,2 the annual volume of procedures performed by ASCs increased from 1.3 to 4.3 million), the current ASC regulation does not address patient rights.

2Department of Health and Human Services Office of Inspector General Quality Oversight of Ambulatory Surgical Centers, The Role of Certification and Accreditation, Supplemental Report 1, February 2002, OEI-01-00-00451.

In February 2002, the HHS Office of the Inspector General (OIG) issued a report, “Quality Oversight of Ambulatory Surgical Centers; A System in Neglect” [Janet Rehnquist, Inspector General, OEI-01-00-00450] which was based on a 2001 assessment of CMS's quality oversight of ASCs. The OIG recommended that CMS include a patient rights provision in the CfC for ASCs. The report specified that a “patients’ rights CfC” is necessary to address issues such as how ASCs will respect patient dignity and resolve patient grievances. In developing the patient rights requirement we examined the current requirements for end stage renal disease facilities and hospitals.

The addition of a patient rights provision would be consistent with the philosophy of assuring patient participation in his or her care. A similar provision has been included in other recently issued rules (for example, Hospital Conditions of Participation: Requirements for Approval and Re-Approval of Transplant Centers to Perform Organ Transplants (72 FR 15198, March 30, 2007)).

The proposed standard at § 416.50(a), Notice of rights, would require the ASC to provide the patient or representative with verbal and written notice of the patient's rights in a language and manner the patient understands prior to furnishing care to the patient. The ASC would also be responsible for posting written notice of the patient rights in a place or places within the ASC where they are likely to be noticed by patientswaiting for treatment. In addition, the notice of patient's rights must include the name, address and telephone number for a representative in the State agency to whom patients can report complaints about ASCs, and the CMS Web site for the Medicare Beneficiary Ombudsman ( (Section 923 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173) (MMA), mandated the creation of the Medicare Beneficiary Ombudsman at section 1808(c) of the Act, to ensure that Medicare beneficiaries receive the information and help they need to understand their Medicare options and to apply their rights and protections. A Medicare Beneficiary Ombudsman Open Door Forum (ODF) has been established to provide an opportunity for beneficiaries, their caregivers and advocates to publicly interact with the Medicare Beneficiary Ombudsman to discuss issues and concerns regarding ways to improve the systems and processes within the Medicare program.

The ASC would also be responsible for meaningfully disclosing, if applicable, physician financial interests or ownership in the ASC facility in accordance with 42 CFR part 420 (Program Integrity). The ASC must disclose the information in writing and furnish it to the patient prior to the first visit.

The disclosure of financial information should be such that patients and their representatives are able to clearly understand if the physician(s) who will be performing a procedure has a financial relationship with the ASC. It is incumbent on the ASC to be able to provide information that is not only technically correct, but which is also easily understood by persons not familiar with financial statements, legal documents or technical language. The ASC should be aware of the age and the cognitive abilities of its patients and recognize that older patients may be confused when presented with a document that they cannot readily understand at first glance.

In § 416.50(a)(2), Advance directives, the ASC would also be responsible for providing the patient or representative with verbal and written information concerning its policies on advance directives, including a description of applicable State law and, if requested, official State advance directive forms. In addition, the ASC would be required to inform the patient or representative of the patient's right to make informed decisions regarding their care, and to document in a prominent part of the patient's current medical record, whether or not the individual has executed an advance directive.

We believe that ASCs should be given flexibility to meet this requirement within the context of their unique patient populations. Differences exist among ASCs and, therefore, ASCs should be allowed to determine the process they would use to comply with this proposed requirement. As a result, we are not establishing specific guidelines for implementation. We also believe that the ASC should be aware that questions may arise when informing patients of their rights; and therefore, they should provide ample time for answering questions.

If the patient is unable to effectively communicate in English, the ASC could have the family members assist in providing an explanation of rights. If a family member is not available, an ASC could make arrangements to furnish translation services to ensure that patients understand their rights. We would expect that advance patient scheduling would enable the ASC to secure the translation services that might be necessary. If the ASC is not able to furnish translation services and believes that neither the patient nor his or her representative will understand the explanation of rights, the ASC would be required to reschedule the procedure or request assistance from the parties in securing translation services. ASCs would have flexibility in determining how best to inform patients of their rights. We would also require that a written explanation of patient rights would be made available to the patient in a language the patient could understand.

Most Medicare facilities, including hospitals, critical access hospitals, skilled nursing facilities, nursing facilities, home health agencies, and hospices are required to maintain written policies and procedures that meet the requirements for advance directives for all adult individuals receiving medical care. In § 489.100, an advance directive is defined as a written instruction, such as a living will or durable power of attorney for health care, that is recognized under State law, whether statutorily or by the courts of the State, and relates to the provision of health care when the individual is incapacitated.

The current ASC regulation does not contain an advance directive provision. This is because Medicare suppliers of services, of which an ASC is one type, are not currently required to maintain written policies and procedures concerning advance directives. However, because ASCs are performing an increasing number of surgical procedures on Medicare beneficiaries, many of which are invasive and require general anesthesia, we are proposing that advance directives be made available in an ASC.

We are also proposing a requirement entitled “Submission and investigation of grievances” at § 416.50(a)(3). This requirement would respond directly to the OIG report referenced earlier regarding management of patient grievances and any alleged violations against patients.

Grievance procedures are already in effect for numerous health care providers including ASCs. Similar to other internal procedures (for example, admission and discharge procedures, infection control procedures and others that are common to health care entities) the development and implementation of grievance procedures vary. Therefore, we have determined that it would be better to allow ASC to establish the specifics of a grievance system that may match its current one or needs rather than requiring that every ASC conform to a single grievance system.

We are proposing that the ASC would establish clearly explained procedures for documenting the existence, submission, investigation, and disposition of grievances presented to the ASC (either written or verbal) made by the patient or the patient's representative. ASCs would document all alleged violations related to and including, but not limited to, mistreatment, neglect, verbal, mental, sexual or physical abuse. If other allegations of mistreatment arise, such as theft of personal property, the ASC would document this allegation, as well. The ASC would immediately report these allegations to a person in authority in the ASC, the State, and local bodies having jurisdiction, and the State survey agency if warranted, to the extent that such reports are consistent with the Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104-191) (HIPAA) and privacy provisions.

We are proposing that the grievance process specify time frames for review and response to the grievance. We are also proposing the ASC would be required to investigate, document, and respond to all grievances made by a patient or the patient's representative regarding treatment or care that is (or fails to be) furnished.

We are proposing that certain information be captured when documenting and responding to grievances. Proposed documentation should include such information as how the grievance was addressed, the steps taken during the investigation; writtennotice to the patient or representative of the ASC's decision (containing the name of an ASC contact person); the results of the grievance process; and the date the grievance process was completed consistent with HIPAA and privacy requirements. ASCs could use different approaches to effectively meet this CfC. We would set forth the general elements that should be common to grievance processes across all ASCs, but we are not explicitly delineating strategies and policies that ASCs are required to use to comply with the requirement. Also, we would leave the degree of documentation to the discretion of the ASC.

The OIG Report specifies the growing need for a grievance process which would ensure that ASCs provide quality care. It also specifies that the process should provide Medicare consumers with a forum to have their grievances about ASCs documented and investigated by State agencies and accreditors. The process should also identify poor or even dangerous ASCs for intervention and follow-up. Consistent with the recommendations in the OIG's report, we are proposing a new standard, “Exercise of rights and respect for property and person,” at § 416.50(b) which would specify that every patient would have the right to: (1) Exercise his or her rights without being subjected to discrimination or reprisal; (2) voice grievances regarding treatment or care that is (or fails to be) furnished; and (3) be fully informed about a treatment or procedure and the expected outcome before it is performed.

In addition, if the patient is determined to be incompetent under State law by a court of proper jurisdiction, the person appointed under State law could act on the patient's behalf. If a State court has not adjudged the patient incompetent, any legal representative designated by the patient in accordance with State law could exercise the patient's rights on his or her behalf to the extent allowed by State law. The ASC would retain flexibility in developing the policies that would support these rights. Although, we are not proposing a specific method stating how the ASC would implement § 416.50(b), we expect that an ASC would educate its staff on the importance of patients' full exercise of their rights and record and maintain complete and full documentation with respect to allegations concerning violation of these rights.

We would propose at § 416.50(c), Privacy and safety, that patients have the right to personal privacy and safety, to receive care in a safe setting, and to be free from all forms of abuse or harassment. For example, ASCs would be required to provide a private space in which patients could disrobe and wait until the surgical procedure begins because we believe it is inappropriate for patients to be required to sit in a public waiting area while in a hospital gown with other fully clothed or similarly gowned patients or be in a common patient area without the benefit of partitions. This right would also allow patients, for example, to identify and report dangerous or unsafe conditions, harassment or abusive behaviors within the ASC that the patient believes could negatively impact the services received at the ASC. We believe this requirement would act as an additional safeguard to patient health and safety.

The proposed “Confidentiality of clinical records standard” at § 416.50(d) is designed to safeguard patients against unauthorized use of their clinical record. We would assure that the patient's right to confidentiality consistent with HIPAA standards and that access to or release of patient information and clinical records is permitted only with written consent of the patient or representative or as authorized by law. We are proposing to add this requirement because patients have the right to communicate with health care providers in confidence and to have the confidentiality of their health care information protected. In addition, all ASCs would be required to comply with the HIPAA health information privacy rule at 45 CFR parts 160 and 164.

5. Condition for Coverage—Infection Control (§ 416.51)

There is currently a requirement for Infection control. The current requirements on infection control are incorporated within the Physical environment standard of the Environment Condition for coverage (§ 416.44). Current requirements include the establishment of a program for identifying and preventing infections, maintaining a sanitary environment, and reporting the results to appropriate authorities.

We propose to establish a separate condition for infection control since control of infection is critically important to overall patient and staff health and safety.

We believe that surgery in an ASC must not entail a greater risk of infection to the patient than surgery in an inpatient setting. Medicare approved surgical procedures are performed in a variety of settings and we believe that an effective infection control program should be present in all ASCs. One primary cause of infections is poor surgical technique and follow-up care. The Centers for Disease Control and Prevention (CDC) 1999 Guideline for Prevention of Surgical Site Infection [Infection Control and Hospital Epidemiology, Vol. 20 No. 4], also states that serious surgical infections can be explained by the emergence of antimicrobial-resistant pathogens and the increased numbers of surgical patients who are elderly. Furthermore, the CDC also reports that two million people are affected by infections that annually occur in hospitals and not including those healthcare associated infections that occur in long-term care facilities, ambulatory-care facilities and outpatient settings (CDC. Public health focus: surveillance, prevention and control of nosocomial infections (MMWR 1992; 41: 783-7)). A recent report on maximizing hand hygiene compliance and improved outcomes published in Infection Control Today reported that healthcare associated infections subject patients to increased risk of morbidity and mortality, increased durations of care and increased healthcare treatment costs (E. Fendler and P. Groziak; Maximizing Hand-Hygiene Compliance to Improve Outcomes: A New Tool for Infection Control, Infection Control Today, November 2001). Furthermore the report by Fendler and Groziak, according to CDC estimates, states that implementing effective infection control programs prevents one-third of these infections.

The proposed infection control condition would place accountability on ASCs to prevent, control, and investigate infections and communicable diseases, and take action that result in improvements for those problematic areas identified and monitored as part of the proposed QAPI program. However, the proposed infection control condition allows flexibility for ASCs to determine how to meet these objectives. This includes the flexibility to determine how much training in infection control is necessary for the ASCs personnel.

The first standard, sanitary environment, would require the ASC to provide a sanitary environment by following acceptable infection control standards of practice in the ASC setting to avoid sources and transmission of infections and communicable diseases. We have proposed to expand the current requirement of maintaining a sanitary environment to include the utilization of infection control standards of practice as guidelines in the ASC infection control program.

The proposed infection control program standard would require the ASC to designate a qualified professional, such as a registered nurse, as the infection control officer. The infection control program would operate under the direction of that designated individual who would be accountable for the investigation and resolution of infection and communicable disease incidents. In addition, the infection control program would be required to follow an organized plan of action to identify infection control problems and implement corrective measures and preventive mechanisms when necessary. We considered requiring ASCs to meet CDC and Occupational Safety and Health Administration (OSHA) standards for providing an environment to avoid infections and communicable disease. However, such a requirement would raise questions as to which CDC or OSHA standards must be met. Moreover, where dual sets of professionally recognized standards exist, we would not wish to restrict ASC flexibility by mandating compliance with a particular body of standards. Therefore, we are not mandating that ASCs follow any specific set of infection control guidelines.

However, we would strongly encourage the ASCs adhere to infection control guidelines that are published by the CDC, the Association of Practitioners in Infection Control (APIC) and the JCAHO as a reference for the utilization of infection control standards of practice.

As stated in the infection control standard, infection control must be an integral part of the QAPI program. In addition, infection control would also be targeted as a required area to be monitored in the proposed QAPI condition. The designated ASC personnel responsible for the infection control program would be required to coordinate with the QAPI program to maintain and improve outcomes in ASC infection control.

We would expect that the ASC will integrate knowledge gained from past and current experiences to modify policies, procedures or practice that would lead to improvements for those problematic areas identified and monitored as part of the QAPI program.

We also considered including specific requirements concerning preoperative hand/forearm antisepsis between surgical patient contacts. The CDC reports that failure to perform appropriate hand hygiene is considered the leading cause of healthcare associated infections and spread of multi-resistant organisms and has been recognized as a substantial contributor to outbreaks. (Centers for Disease Control and Prevention,Guideline For Hand Hygiene in Health-Care Settings,October 25, 2002; Vol. 51; No. RR-16). However, we believe the ASC's obligation to protect patients and staff from facility acquired infections could be assured if an ASC is required to follow current infection control standards of practice. ASCs would be held accountable for establishing hand hygiene policies. Adequate policy and practice of hand hygiene between all patients that addresses antiseptic agents used, scrubbing technique, duration of the scrub, condition of the hands, and techniques used for drying and gloving would all fall under the responsibilities of the ASC to protect its staff and patients from infection.

In addition, we are not proposing to include a prescriptive requirement that mandates a specific method of cleaning and sterilization of equipment utilized in ASC procedures. We would require each ASC to be responsible for creating and implementing its own policies and procedures for proper instrument cleaning and maintenance of the sterilization equipment to prevent patient exposure to infectious organisms by ensuring all equipment is properly cleaned and sterilized. If an ASC utilizes equipment that has been improperly sterilized, a potential exists to put all of its patients at risk.

With the increasing popularity of ASCs, adherence to the most basic elements of infection control, like simple hand hygiene techniques, are of paramount importance.

6. Condition for Coverage—Patient Admission, Assessment and Discharge (§ 416.52)

This proposed condition continues to reflect a more patient-centered approach and underscores our view of essential steps to improve quality of care and patient outcomes. The proposed new condition would augment the current regulations that require an evaluation of the patient for anesthesia risk before surgery and proper recovery from anesthesia before discharge.

As noted by the former CMS Administrator, Dr. Mark McClellan, during his testimony before the Senate Finance Committee on May 18, 2006, “Medicare payments to ASCs are expected to better reflect the resources required to perform specific surgical procedures and to be similar to payments under other payment systems. In its 2005 Report to Congress, CMS found that many orthopedic surgical specialty hospitals were more similar to ASCs than to acute care hospitals.” To address this problem, CMS is developing revisions to the payment rates and also the list of procedures eligible for payment. The payment revisions are slated to be in effect by January 1, 2008, and it is anticipated there will be many more procedures performed in ASCs than in the past. We believe that with the expansion of procedures being performed in ASCs, there is a need for a requirement that addresses thorough patient assessment and recovery issues.

Older patients generally face greater risks when using anesthetics during surgical procedures than do younger patients. The normal aging process can extend healing time, increase the recovery time from medications, and complications may be more severe (Merck Manual of Geriatrics, Section 3, Chapter 27, Anesthesia Considerations). It is our intent to ensure that accurate and thorough assessments would be conducted to assure appropriate and safe surgery, and that patients would be able to tolerate a scheduled surgical procedure.

We are proposing this new condition as a method to capture specific patient care requirements in the pre-admission, pre-surgical, post-surgical and discharge phases of the ASC surgery process. The core objectives of this condition would be to ensure: (1) The patient can tolerate a surgical experience; (2) the patient's anesthesia risk and recovery are properly evaluated; (3) the patient's post-operative recovery is adequately evaluated; (4) the patient receives effective discharge planning; and (5) the patient is successfully discharged from the ASC.

Under the first proposed standard, “Admission and pre-surgical assessment”, we would propose that each patient must have a comprehensive medical history and physical assessment completed not more than 30 days before the date of scheduled surgery by a physician (as defined in section 1861(r) of the Act), or other qualified practitioner in accordance with State law and ASC policy. We are proposing the 30-day time limit to remain consistent with our hospital conditions of participation that also requires a medical history and physical assessment be completed no more than 30 days before an elective procedure or admission. In addition, to ensure the ASC healthcare team would have all patient information available if needed, the ASC would be required to place the medical history and physical assessment in the patient's medical record before the surgical procedure is started.

The information to be included in the assessment would be determined by theASC based on accepted standards of practice and the characteristics, health risks and needs of the patient. ASCs would continue to have the flexibility to define the content and extent of the pre-surgical assessment; however, we would propose several items that must be included. The pre-surgical assessment entry in the medical record would be required to include an updated entry documenting an examination for any changes in the patient's condition since the most recently documented medical history and physical assessment. In addition, we believe that ASCs must provide specific documentation addressing the patient's capacity, both physically and mentally, to undergo the planned surgery and documentation of any allergies. As stated in the current pre-surgical assessment requirement at § 416.42(a), a physician is required to examine the patient immediately before surgery to evaluate the risk of anesthesia and of the procedure to be performed. The proposed additional pre-assessment items are to be completed by a physician or other qualified practitioner in accordance with State law and in conjunction with the current pre-surgical requirements. We believe that this proposed standard would set a clear expectation for a direct, effective relationship between the patient medical history and assessment and the procedures performed; a relationship that is essential for achieving desired healthcare outcomes.

The proposed standard § 416.52(b), “Post-surgical assessment” would require the ASC to ensure that a thorough assessment of the patient's post-surgical condition is completed, documented in the medical record and that any post-surgical needs are addressed and included in the discharge notes. We propose to retain the current standard at § 416.42(a) that requires a physician to evaluate each patient for anesthesia recovery before discharge. The post-surgical assessment must be performed by a physician or other qualified practitioner in accordance with State law. The post-surgical assessment would assess all body systems and identify any unforeseen or unanticipated post-surgical medical issues. The goal would be to decrease the amount of post-surgical complications experienced after discharge in the home recovery setting.

The last proposed standard, Discharge, would require the ASC to provide each patient with written discharge instructions and ensure that all patients have the best possible transition to home and that all post-surgical needs would be met. In addition, we are proposing that each patient have a discharge order signed by the physician or the qualified practitioner who performed the surgery or procedure unless otherwise specified by State law. The discharge order must indicate that the patient has been evaluated for proper anesthesia and medical recovery. The requirement of a signed discharge order would ensure our beneficiaries are stable and safe to be discharged. We believe it is imperative, especially in preparation for the upcoming changes to the approved procedures in an ASC setting, that a physician or the qualified practitioner who performed the surgery or procedure be available to provide assistance in the ASC if needed, until all patients have been given a signed discharge order by the aforementioned practitioner. We believe this would eliminate any confusion with respect to the level of care and the ability of the ASC to respond to a patient emergency before the patient is discharged. We have not included language specifically requiring a physician to be on the premises while there are patients in the ASC. However, when the discharge order is signed, the patient would be expected to be discharged, that is, physically leave the ASC facility within a reasonable amount of time. Fifteen to thirty minutes would be a reasonable timeframe for the patient to complete the discharge process and leave the facility. Although most patients know how to contact their physician during nonroutine office hours, professional standards of practice dictate the ASC should include physician coverage information in the written discharge instructions regarding emergency care in the event of any postoperative adverse effects. We believe adding the three additional discharge elements would be essential for our beneficiaries because advanced age could pose slower healing times, unforeseen complications, and depending on the individual, difficulty with home self-care. The proposed discharge standard would not be intended to require lengthy and burdensome documentation. However, the intent is to ensure our beneficiaries receive the appropriate care once the surgical procedure is completed.

Lastly, early in the ASC regulation drafting process, we considered creating a revised list of required emergency equipment. However, we decided not to create a new list since the emergency equipment that is currently stated in § 416.44(c) is what we consider to be the minimum requirement. Advances and improvements in medical technology generate improvements in emergency equipment used by medical professionals. As a result, a variety of applicable equipment is available from which to choose. Technology and professional judgment should dictate the kind of emergency equipment a facility should be using. If another list of “current” emergency equipment were to be created it would soon be outdated. Conversely, not specifying any emergency equipment would lead to ambiguity and there is a need to ensure that a minimum amount of emergency equipment will be available on-site at the ASC.

We believe that substitutions for a specific piece of emergency equipment, listed in § 489.44(c), could be appropriate if it performs the same emergency function for which the equipment listed in the current regulation was intended. For example, in the event a patient experiences cardiac fibrillation, it is critical that ASCs provide their medical professionals with the appropriate equipment to respond to this kind of emergency. The use of automatic external defibrillators (AED) has recently increased in various settings and in healthcare facilities. The intent of the current and proposed regulation is to make certain that an ASC uses emergency equipment which is deemed appropriate. We believe that ASCs should be required to have available all forms of emergency equipment listed in § 416.44(c), or other equipment which can meet the intended purpose.

III. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in theFederal Registerand solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues:

• The need for the information collection and its usefulness in carrying out the proper functions of our agency.

• The accuracy of our estimate of the information collection burden.

• The quality, utility, and clarity of the information to be collected.

• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.

We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements:

Conditions for Coverage—Governing Body and Management (§ 416.41)

In summary, this section outlines the conditions of coverage related to the governing bodies and management of ASCs