Medicare program; physicians' referrals to health care entities with which they have financial relationships (Phase II). Interim final rule with comment period

This interim final rule with comment period (Phase II of this rulemaking) incorporates into regulations the provisions concerning ownership and investment exceptions in paragraphs (c) and (d) and the compensation exceptions in paragraph (e) of section 1877 of the Social Security Act (the Act). Phase II also addresses comments concerning the reporting requirements in section 1877(f) of the Act. Phase I (as defined below) addressed the majority of issues in implementing section 1877 of the Act. Phase II both addresses the remaining issues not addressed in Phase I and responds to public comments. In general, in response to public comments, the Department has attempted to reduce regulatory burden by broadening exceptions using the Secretary's discretionary authority under the statute to create exceptions that pose no risk of fraud or abuse. For the convenience of affected parties, we have set out the entire rule as previously promulgated, including the changes made by this rulemaking.     

Medicaid program; time limitation on record keeping requirements under the drug rebate program. Interim final rule with comment period

On August 29, 2003, we published a final rule with comment period in the Federal Register that finalized two specific provisions: it established new 3-year recordkeeping requirements for drug manufacturers under the Medicaid drug rebate program and set a 3-year time limitation during which manufacturers must report changes to average manufacturer price and best price for purposes of reporting data to us. In addition, it announced the pressing need for codification of fundamental recordkeeping requirements. On September 26, 2003, we issued a correction notice to change the effective date of the August 29, 2003 rule from October 1, 2003 to January 1, 2004. In this interim final rule with comment period, we are removing the 3-year recordkeeping requirements, replacing them with 10-year recordkeeping requirements on a temporary basis, and soliciting comments on the 10-year requirements. Manufacturers must retain records beyond the 10-year period if the records are the subject of an audit or a government investigation of which the manufacturer is aware. These provisions contain a sunset date with respect to the record retention requirements to ensure that we reexamine whether the retention rule remain necessary and effective. This interim final rule with comment period also responds to public comments on the August 29, 2003 final rule with comment period that pertain to the 3-year recordkeeping requirement at Sec. 447.534(h).     

Medicare program; change in methodology for determining payment for extraordinarily high-cost cases (cost outliers) under the acute care hospital inpatient and long-term care hospital prospective payment systems. Final rule

In this final rule, we are revising the methodology for determining payments for extraordinarily high-cost cases (cost outliers) made to Medicare-participating hospitals under the acute care hospital inpatient prospective payment system (IPPS). Under the existing outlier methodology, the cost-to-charge ratios from hospitals' latest settled cost reports are used in determining a fixed-loss amount cost outlier threshold. We have become aware that, in some cases, hospitals' recent rate-of-charge increases greatly exceed their rate-of-cost increases. Because there is a time lag between the cost-to-charge ratios from the latest settled cost report and current charges, this disparity in the rate-of-increases for charges and costs results in cost-to-charge ratios that are too high, which in turn results in an overestimation of hospitals' current costs per case. Therefore, we are revising our outlier payment methodology to ensure that outlier payments are made only for truly expensive cases. We also are revising the methodology used to determine payment for high-cost outlier and short-stay outlier cases that are made to Medicare-participating long-term care hospitals (LTCHs) under the long-term care hospital prospective payment system (LTCH PPS). The policies for determining outlier payment under the LTCH PPS are modeled after the outlier payment policies under the IPPS.     

Medicare program; improvement to the Medicare+Choice appeal and grievance procedures. Final rule with comment period

This final rule with comment period responds to comments on the January 24, 2001, proposed rule regarding improvements to the Medicare+Choice (M+C) appeal and grievance procedures. It establishes new notice and appeal procedures for enrollees when an M+C organization decides to terminate coverage of provider services. The January 24, 2001 proposed rule was published as a required element of an agreement entered into between the parties in Grijalva v. Shalala, civ. 93-711 (U.S.D.C. Az.), to settle a class action lawsuit. This rule also specifies a Medicare-participating hospital's responsibility for issuing discharge or termination notices under both the original Medicare and M+C programs, amends the Medicare provider agreement regulations with regard to beneficiary notification requirements, and amends M+C enrollee grievance procedures.     

Medicare and Medicaid programs; hospital conditions of participation: quality assessment and performance improvement. Final rule

This final rule requires hospitals to develop and maintain a quality assessment and performance improvement (QAPI) program. In the December 19, 1997 Federal Register, we published a proposed rule to revise the hospitals conditions of participation (CoPs). The QAPI CoP was one of the conditions included in the proposed rule. We separated the QAPI CoP from the larger set of hospital CoPs so that it could be published in advance of the remaining CoPs to implement the Administration's initiatives regarding medical errors. QAPI focuses provider efforts on the actual care delivered to patients, the performance of the hospital as an organization, and the impact of treatment furnished by the hospital on the health status of its patients. Specifically, it is important to note that a QAPI is not designed to measure a hospital's quality, but rather a minimum requirement that the hospital systematically examine its quality and implement specific improvement projects on an ongoing basis. State agencies (SAs) during their surveys, review all aspects of a hospital's operations and this review provides a framework in which the SA can assess a hospital's QAPI program. In addition, the QAPI entails all activities required for measuring quality of care and maintaining it at acceptable levels. This typically includes; 1) Identifying and verifying quality-related problems and their underlying cause; 2) Designing and implementing corrective action activities to address deficiencies; 3) Following up to determine the degree of success of an intervention and to detect new problems and opportunities for improvement. Performance improvement activities aim to improve overall performance assuming that there is no permanent threshold for good performance. Under performance improvement framework, hospitals will continuously study and improve the processes of healthcare and delivery of service.     

Medicare program; notification of hospital discharge appeal rights. Final rule

This final rule sets forth requirements for how hospitals must notify Medicare beneficiaries who are hospital inpatients about their hospital discharge rights. Notice is required both for original Medicare beneficiaries and for beneficiaries enrolled in Medicare Advantage (MA) plans and other Medicare health plans subject to the MA regulations. (For purposes of this preamble, these entities will collectively be known as "Medicare health plans"). Hospitals will use a revised version of the Important Message from Medicare (IM), an existing statutorily required notice, to explain the discharge rights. Hospitals must issue the IM within 2 days of admission, and must obtain the signature of the beneficiary or his or her representative. Hospitals will also deliver a copy of the signed notice prior to discharge, but not more than 2 days before the discharge. For beneficiaries who request an appeal, the hospital will deliver a more detailed notice.     

Medicare program; home health prospective payment system rate update for calendar year 2007 and Deficit Reduction Act of 2005 changes to Medicare payment for oxygen equipment and capped rental durable medical equipment; final rule

This final rule sets forth an update to the 60-day national episode rates and the national per-visit amounts under the Medicare prospective payment system for home health services. In addition, this final rule sets forth policy changes related to Medicare payment for certain durable medical equipment for the purpose of implementing sections 1834(a)(5) and 1834(a)(7) of the Social Security Act, as amended by section 5101 of the Deficit Reduction Act of 2005. This final rule also responds to public comments on the August 3, 2006, proposed rule that pertain to a number of issues including the requirement that home health payments are based on the reporting of specific quality data by home health agencies.     

Medicare and Medicaid programs; condition of participation: immunization standard for long term care facilities. Final rule

The goal of this final rule is to increase immunization rates in Medicare and Medicaid participating long term care (LTC) facilities by requiring LTC facilities to offer each resident immunization against influenza annually, as well as lifetime immunization against pneumococcal disease. LTC facilities will be required to ensure that before offering the immunization, each resident or the resident's legal representative receives education regarding the benefits and potential side effects of immunization. The facilities will be required to offer immunization against influenza annually and immunization against pneumococcal disease once, unless medically contraindicated or the resident or the resident's legal representative refuses immunization. Increasing the use of Medicare-funded preventive services is a goal of both CMS and the Centers for Disease Control and Prevention (CDC). This final rule is intended to increase the number of elderly receiving influenza and pneumococcal immunization and decrease the morbidity and mortality rate from influenza and pneumococcal diseases.