Medicare Program; Accrediting Organizations-Changes to Change of Ownership
| Published date | 02 May 2019 |
| Citation | 84 FR 18748 |
| Record Number | 2019-08939 |
| Section | Proposed rules |
| Court | Centers For Medicare & Medicaid Services |
Federal Register, Volume 84 Issue 85 (Thursday, May 2, 2019)
[Federal Register Volume 84, Number 85 (Thursday, May 2, 2019)]
[Proposed Rules]
[Pages 18748-18757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08939]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 410, 414, 424, 488, and 493
[CMS-3368-P]
RIN 0938-AT83
Medicare Program; Accrediting Organizations--Changes to Change of
Ownership
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would add requirements and a specified
process to address changes of ownership as they relate to the sale,
transfer, and/or purchase of assets of Accrediting Organizations (AOs)
with the Centers for Medicare & Medicaid Services (CMS)-approved
accreditation programs. This change is intended to provide CMS the
ability to receive notice when an AO is contemplating undergoing or
negotiating a change of ownership and the ability to review the AO's
capability to perform its tasks after a change of ownership has
occurred, in order to insure the ongoing effectiveness of the approved
accreditation program(s) and to minimize risk to patient safety.
DATES: Comments: To be assured consideration, comments must be received
at one of the addresses provided below, no later than 5 p.m. on July 1,
2019.
ADDRESSES: In commenting, refer to file code CMS-3368-P. Because of
staff and resource limitations, we cannot accept comments by facsimile
(FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-3368-P, P.O. Box 8010,
Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-3368-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Monda Shaver, 410-786-3410.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: http://www.regulations.gov. Follow the search instructions on
that website to view public comments.
I. Background
Medicare-certified providers and suppliers participate in the
Medicare program by entering into a provider agreement with the
Medicare program. Medicare-certified providers and suppliers include
hospitals, skilled nursing facilities (SNFs), home health agencies
(HHAs), hospice programs, rural health clinics (RHCs), critical access
hospitals (CAHs), comprehensive outpatient rehabilitation facilities
(CORFs), laboratories, clinics, rehabilitation agencies, public health
agencies, End Stage Renal Disease (ESRD) dialysis facilities and
ambulatory surgical centers (ASCs). To
[[Page 18749]]
participate in the Medicare program, Medicare-certified providers and
suppliers of health care services must among other things, be
substantially in compliance with specified statutory requirements of
the Social Security Act (the Act), as well as any additional regulatory
requirements related to the health and safety of patients specified by
the Secretary of the Department of Health and Human Services (the
Secretary). These health and safety requirements are generally called
conditions of participation (CoPs) for most providers, requirements for
SNFs, conditions for coverage (CfCs) for ASCs and other suppliers, and
conditions for certification for RHCs. A Medicare-certified provider or
supplier that does not substantially comply with the applicable health
and safety requirements risks having its Medicare provider agreement
terminated.
Section 1865(a) of the Act allows most types of Medicare-certified
providers and suppliers to demonstrate compliance with the applicable
health and safety requirements through accreditation by a Centers for
Medicare & Medicaid Services (CMS)-approved accreditation program of a
national accreditation body, known as an Accrediting Organization (AO).
This is referred to as ``deemed'' accreditation, because, if an AO is
recognized by the Secretary as having standards for accreditation that
meet or exceed Medicare requirements, any provider or supplier which is
accredited by that AO's CMS-approved accreditation program is deemed by
CMS as complying with the applicable Medicare conditions or
requirements.
The CMS is responsible for providing continued oversight of
national AOs' Medicare accreditation programs to ensure that providers
or suppliers accredited by the AO meet the required quality and patient
safety standards. We must ensure that the AOs have formalized
procedures to determine whether the healthcare facilities deemed under
their accreditation programs meet the AO's accreditation standards
(which must meet or exceed the applicable Medicare program
requirements). CMS is also responsible for ensuring that the AO's
accreditation standards and practices for surveying providers and
suppliers meet or exceed CMS's standards and practices for granting
approval.
Additionally, while accreditation by an AO is generally voluntary
on the part of the Medicare-certified providers or suppliers,
accreditation is mandated by statute for five supplier-types in order
to receive payment from Medicare for the services furnished to Medicare
beneficiaries. These five supplier types are Advanced Diagnostic
Imaging (ADI) suppliers, Home Infusion Therapy (HIT) suppliers,
Diabetic Self-Management Training (DSMT) entities, Durable Medical
Equipment suppliers, suppliers of Prosthetics, Orthotics, and Supplies
(DMEPOS), and clinical laboratories. We describe these providers and
suppliers as ``non-certified'' because they are enrolled in the
Medicare program but are not eligible to become Medicare-certified by
entering into a participation agreement with Medicare.
These proposed provisions would affect all of the AOs that accredit
providers and suppliers, both those that are enrolled in the Medicare
program, and those that enter into a participation agreement with
Medicare. We believe that a change of ownership could occur with an AO
that accredits either category of providers or suppliers.
Any national AO seeking approval of an accreditation program in
accordance with section 1865(a) of the Act must apply for and be
approved by CMS for a period not to exceed 6 years (See 42 CFR
488.5(e)(2)(i)). The AO must also reapply for renewed CMS approval of
an accreditation program before the date its existing approval period
expires. This allows CMS to continue to ensure that accreditation
provided by these AOs continue to indicate that the providers or
suppliers accredited are meeting or exceeding Medicare standards.
Regulations implementing these provisions are found at 42 CFR 488.1
through 488.9.
We have an established process for the change of ownership of
Medicare-certified providers and suppliers set forth at Sec. 489.18
and in Chapter 100-07 of the State Operations Manual (SOM). Although
the existing provider and supplier change of ownership process does not
apply to the sale and transfer of AOs, we believe that it serves as an
appropriate model for what we are proposing to require for changes of
ownership of AOs.
Section 489.18 defines what constitutes a change of ownership, the
required notice from the current provider, the disposition of the
current provider agreement and the conditions that apply to the
provider agreement once it is assigned or transferred to the new owner.
The Medicare regulations at Sec. 489.18, as well as the CMS State
Operations Manual (CMS Pub. 100-07), outline processes concerning how a
change of ownership of a provider or supplier affects Medicare
participation, such as how a provider agreement is automatically
assigned to a new owner unless the new owner rejects assignment of the
provider agreement. A change of ownership takes place when the
responsible legal entity has changed and typically occurs when a
Medicare provider has been purchased (or leased) by another
organization. This section specifically defines what constitutes a
change of ownership for purposes of Medicare, the effect on the
provider agreement, and requires a provider that is contemplating or
negotiating a change of ownership to notify CMS (See Sec. 489.18(b)).
In general, and with certain limited exceptions, under this existing
process if a facility's new owner accepts the assignment of the
provider agreement and provider number (also known as a CMS
Certification Number (CCN), the provider agreement remains intact, the
new owner retains all the benefits and liabilities of that agreement,
and the provider's Medicare participation continues without
interruption. If the purchaser (or lessee) elects not to accept
automatic assignment or transfer of the provider agreement, then that
rejection is considered to be a voluntary termination of the existing
provider agreement. Therefore, the purchaser or lessee is considered a
new applicant and must request initial certification as a new provider
and obtain a new provider agreement. It is important to clarify that
CMS does not approve the actual business transaction between entities
that result in the change of the responsible legal entity. Instead,
CMS' role when provider ownership changes is to ensure that a new owner
who accepts the automatic assignment of the existing provider agreement
(a change of ownership) is eligible for Medicare participation. If so,
we continue to treat the provider as the same entity, with only the
owner having changed. Section 489.18(d) provides that where there is a
change of ownership (defined as automatic assignment of the provider
agreement at Sec. 489.18(c)), the provider agreement under the new
owner is subject to all applicable statutes and regulations, and to the
terms and conditions under which it was originally issued. This
includes successor liability for Medicare overpayments and penalties.
If the new owner rejects automatic assignment of the provider
agreement, then it must seek initial Medicare enrollment and
certification for the facility, which may take several months. A new
owner who rejects automatic assignment cannot receive payment for any
services it may provide for Medicare beneficiaries between the date it
acquires the facility and the date we determine that it meets all
Medicare requirements at Sec. 489.13.
[[Page 18750]]
Currently, the regulations governing AOs do not include a process
for notifying CMS of pending changes of ownership or other procedures,
which would allow CMS to review information about the proposed transfer
of ownership of accreditation program(s) and the authority for CMS to
approve or deny the transfer of the existing CMS approval for the
accreditation program(s) to be transferred. Under our current
regulations, CMS does not typically become aware of a sale or transfer
until an AO applies for renewal of CMS approval of its accreditation
program(s) or if voluntarily notified by the AO (although CMS always
retains the right to conduct comparability or validation surveys in
accordance with Sec. 488.8). Thus, we do not believe that we currently
have the explicit regulatory authority to prospectively review and
approve or deny the transfer of the existing Medicare-approval of
accreditation programs being transferred in a change of ownership
transaction to ensure that after such transfer, the AO could continue
to ensure that the entities it accredits meet or exceed CMS
requirements in order to be granted CMS approval of its program(s).
We believe that the current situation, whereby a change in
ownership of CMS-approved accreditation programs may occur without
notice to CMS, which does not provide an opportunity for CMS to review
and approve or deny the transfer of the existing CMS-approval of the
accreditation programs to be transferred. We believe that this scenario
must be addressed so that we may assure Medicare beneficiaries that the
standards and conditions for surveying facilities will continue to be
met by the accreditation programs that are transferred under new
ownership. We also believe it is possible that the AO, after a change
of ownership transaction, may not be viable or equipped to accredit
facilities under the transferred CMS approved CMS accreditation
programs, due to the new owner's inability to enforce the health and
safety requirements of CMS. Without the authority to require AOs to
provide CMS with notice when they are contemplating or negotiating a
change of ownership, and the authority to review the ability of the
prospective new owner's capability to perform the required
accreditation tasks, after a change of ownership, CMS is unable to
confirm the ongoing effectiveness of the transferred CMS-approved
accreditation program(s).
II. Provisions of the Proposed Regulations
Although the existing provider and supplier change of ownership
process outlined above (Sec. 489.18) does not apply to the sale and
transfer of AOs, we have used it as a model for this proposal because
stakeholders are familiar with it and we are hopeful to reduce their
burden. In addition to the current AO regulations for application and
reapplication procedures for national AOs (Sec. 488.5), we are
proposing to add notification and approval requirements in the event
there is an anticipated change of ownership of an AO. The proposed
procedure would enable CMS to determine whether the new AO would be
able to meet the appropriate accreditation requirements to be awarded
deeming authority by CMS for the new or transferred CMS-approved
accreditation programs. This means that we would make a decision as to
whether to allow the existing Medicare-approval for the accreditation
programs involved in the change of ownership transaction to be
transferred to the new owner/transferee.
As noted above, we currently have no regulatory authority to review
and approve the transfer of the existing Medicare approval of the
accreditation programs undergoing a change of ownership to ensure that
immediately after the transfer, the purchaser or transferee ensures
that the providers and suppliers it accredits continue to meet or
exceed CMS accreditation and survey requirements. Additionally, we
consider AOs which have ceased doing business to have voluntarily
terminated their Medicare approval(s); therefore, if another entity
subsequently purchased the property of the defunct AO with the intent
of operating as an AO, we would require that entity to begin the AO
approval process from the beginning. In most cases, CMS would be able
to determine an AO's cessation of business either through--(1) a change
in their accreditation name on the required reapplication documents for
approval of their accrediting programs; (2) notification of cessation
of business, or notification that the entity approved for deeming
authority (published in the Federal Register) is no longer in control
or operation of the AO; or (3) a validation survey process.
We propose at Sec. 488.5 to add a new paragraph (f) that would set
out the requirements and processes for CMS' review and approval of the
transfer of the existing CMS-approval for the accreditation program(s)
to be transferred in the change of ownership event. We propose at Sec.
488.5(f)(1)(i), that any CMS-approved AOs negotiating or engaging in a
change of ownership transaction must provide notice of this change of
ownership transaction to CMS. At proposed Sec. 488.5(f)(1)(ii) and
(iii), we would require that this notice be provided to CMS in writing
no less than 90 days prior to the effective date of the transfer of
ownership. This notice requirement would allow CMS to perform an
evaluation of whether the AO, under the new ownership, would (1) be
viable or equipped to accredit facilities under its existing CMS
approval; (2) be able to enforce the health and safety requirements of
CMS for that program; (3) operate effectively; and (4) continue to meet
or exceed the Medicare standards.
We would further require the prospective new owner or transferee to
submit certain information to CMS for review in support of their
request for transfer of the existing CMS-approval of the CMS-approved
accreditation programs to be transferred. We propose at Sec.
488.5(f)(2)(iii), to require the prospective new owner or transferee to
submit the following information: (1) The name and address of the legal
entity that would be the owner of the new AO after the transfer is
completed; (2) the three most recent audited financial statements of
the organization that demonstrate that the organization's staffing,
funding, and other resources are adequate to perform the required
surveys and related activities; (3) a transition plan that summarizes
the details of how the accreditation functions will be transitioned to
the new owner. Section 488.5(f)(2)(iii)(C) would require that the AO's
transition plan include the following information: (1) Changes to
management and governance structures including current and proposed
organizational charts; (2) a list of the CMS-approved accreditation
programs that will be transferred to the purchaser/buyer/transferee;
(3) Employee changes, if applicable; (4) anticipated timelines for
action; (5) plans for notification to employees; and (6) any other
relevant information that CMS finds necessary.
It is important in the process of a change of ownership that the
purchaser or transferee and seller develop a transition plan that
allows for details to be considered and addressed, which may be
relevant to the transfer of the CMS approved accreditation program that
could impact the health and safety of patients. Transition plans may
include but are not limited to management structures, organizational
charts which reflect existing and new positions or departments,
governance, employee changes, and any substantive
[[Page 18751]]
changes to the AOs operations or accreditation programs associated with
the sale or transfer. In the event the transition plans provided to CMS
by the purchaser or transferee were determined by CMS to be inadequate,
we could request revisions to the plans or deny the transfer of the
existing CMS-approval for the accreditation program(s), which are part
of the change of ownership transaction, as we believe these plans
directly impact patient safety within facilities. In addition, we
believe that the review of this information would allow CMS to ensure
an AO is capable of continuing to provide safe and effective
accreditation services to those healthcare settings they serve.
We propose at Sec. 488.5(f)(3)(i), to require the purchaser or
transferee to provide a written acknowledgement, which states that if
CMS approve the transfer of the existing CMS-approval of the
accreditation programs that are part of the change of ownership
transaction, the new owner will become managerially, legally, and
financially responsible for the operations of all CMS-approved
accreditation programs being transferred. This means that upon our
approval of the transfer of the existing CMS-approval for the
accreditation programs being transferred, and upon the finalization of
the change of ownership transaction, the purchaser or transferee would
be completely responsible for the management of the business operations
of the AO, including, but not limited to the day to day business
operations, the survey and accreditation processes, the oversight of
accredited providers and suppliers, the handling of complaints
regarding accredited suppliers, and the compliance with all CMS
requirements. This acknowledgement would ensure that the purchaser or
transferee knows that they will be accountable for any oversight
concerns from the date CMS grants approval of the transfer of the
program and deeming authority and after the change of ownership has
taken affect, in accordance with CMS' policy of successor liability.
Furthermore, we propose at Sec. 488.5(f)(3)(ii), to require the
purchaser or transferee to provide CMS with a written acknowledgment
stating that they agree to operate the transferred CMS-approved
accreditation program(s) under all the terms and conditions found at
Sec. Sec. 488.5 through 488.9.
We propose at Sec. 488.5(f)(3)(iii), that the purchaser or
transferee would be required to provide a written acknowledgement that
they would not operate the accreditation program(s) it acquired as a
CMS-approved accreditation program(s) until they received from CMS a
notice of approval of the transfer of the CMS approved accreditation
programs.
We propose at Sec. 488.5(f)(4)(i), that the parties to the change
of ownership would be required to notify the providers and suppliers
affected by the change of ownership within 15 calendar days after being
notified of CMS's approval of the transfer to the existing CMS-approval
for the accreditation program(s) being transferred. Additionally, we
propose at Sec. 488.5(f)(4)(ii), that if the AO or accreditation
program(s) being acquired were under a performance review or under
probationary status at the time the change of ownership notice was
submitted, the purchaser or transferee would have to acknowledge such
status in writing. We believe that the purchaser or transferee must
understand that when the CMS-approved accreditation program(s) are
transferred under the change of ownership, all current terms and
conditions, and responsibilities are included in the transfer.
We propose at Sec. 488.5(f)(5), that we would publish a notice in
the Federal Register, which would acknowledge the transfer of the CMS-
approved accreditation program(s) due to the change of ownership event
and state that the accreditation program(s) to be transferred, which
were previously approved by CMS will retain this CMS-approval under the
new ownership. This notice is only intended to inform the public of the
ownership change; therefore, the notice would not solicit public
comments. This section further provides that we would not publish this
notice after CMS has issued approval for the transfer, without first
receiving written confirmation that the change of ownership has taken
place. We believe this would avoid potential issues in which CMS may
publish a notice in the Federal Register based solely on its approval,
without having confirmation of the completed transaction.
We propose at Sec. 488.5(f)(6), that in the event CMS did not
approve the transfer of the existing CMS approval for the accreditation
programs subject to the change of ownership event, CMS would notify all
parties to the change of ownership transaction in writing. This notice
would be sent to the relevant parties at the existing AO and the
prospective transferee.
We propose at Sec. 488.5(f)(7)(i), in the event CMS was not made
aware of a change of ownership transaction, or did not approve the
transfer of the existing CMS approval for the accreditation program(s)
subject to transfer through a change of ownership event, the subject AO
would be able to continue operating under the existing CMS approval for
its accreditation programs if the change of ownership transaction was
not completed. The exception to this proposal would be in the event
that our review of the un-finalized change of ownership transaction
revealed performance and/or compliance issues that were previously
unknown to CMS with the AO that was the subject of the un-finalized
transfer.
We also propose at Sec. 488.5(f)(7)(ii), that CMS would be able to
withdraw the CMS approval of an AO's accreditation programs in
accordance with Sec. 488.8(c)(3)(ii) and (iii), if a change of
ownership transaction was completed without notice to CMS or without
the approval of CMS to transfer the existing CMS approval for the
accreditation program(s) to the new owner.
We propose at Sec. 488.5(f)(8), that in the event parties
completed the change of ownership transaction, notwithstanding CMS
disapproval of the request to transfer the existing CMS approval for
the accreditation programs to the new ownership, and the purchaser or
transferee attempted to operate the transferred accreditation programs
under the CMS-approval granted to the previous owner of the
accreditation program(s), for which the transfer was disapproved, CMS
would withdraw the approval of the accreditation programs in accordance
with the procedures set out at Sec. 488.8(c)(3)(ii) and (iii).
We propose at Sec. 488.5(f)(9), that, in accordance with Sec.
488.8(g), if CMS withdrew the existing approval of transferred
accreditation program(s) because a change of ownership transaction was
completed without notice to or the approval of CMS, an affected
Medicare-certified provider's or supplier's deemed status would
continue in effect for 180 calendar days after the removal of the
existing CMS accreditation approval if the provider or supplier took
the steps stated in Sec. 488.8(g). First, the Medicare-certified
provider or supplier would be required to submit an application to
another CMS-approved accreditation program within 60 calendar days from
the date of publication of the removal notice in the Federal Register.
Second, the Medicare-certified provider or supplier would be required
to provide written notice to the SA stating that it has submitted an
application for accreditation under another CMS-approved accreditation
program within the 60-calendar day timeframe specified in Sec.
488.8(g). Failure to comply with the timeframe requirements specified
in Sec. 488.8(g) would place the affected
[[Page 18752]]
Medicare-certified provider or supplier under the SA's authority for
continued participation in Medicare and on-going monitoring. The intent
of proposed Sec. 488.5(f)(9) is to protect Medicare-certified
providers and suppliers that have been accredited by an AO that
received the accreditation program(s) in a change of ownership
transaction that was completed without notice to CMS or without
receiving the approval of CMS for the transfer of the existing CMS
approval for the accreditation program(s) transferred. It is necessary
to provide this protection because, if CMS were to withdraw approval
for the improperly transferred accreditation program(s) the providers
and suppliers accredited by the affected AO would be left with non-CMS
approved accreditation.
However, the provisions of Sec. 488.8(g) would not apply to non-
certified providers and suppliers, because the statute does not
authorize SAs to engage in oversight of these types of providers and
suppliers. Therefore, we propose at Sec. 488.5(f)(10) that if CMS
withdrew the existing approval of transferred non-certified
accreditation program(s) because a change of ownership transaction was
completed without notice to or the approval of CMS, an affected non-
certified provider's or supplier's deemed status would continue in
effect for 1 year after the removal of the existing CMS accreditation
approval if the non-certified provider or supplier submitted an
application to another CMS-approved accreditation program within 60
calendar days from the date of publication of the removal notice in the
Federal Register and provided written notice of such application to the
CMS within such timeframe. Failure to comply with the timeframe
requirements would result in a CMS determination that the provider or
supplier was no longer accredited.
For non-certified suppliers such as ADI and DSMT suppliers, CMS-
approved accreditation is required as a condition for receipt of CMS
reimbursement for the services furnished to Medicare beneficiaries. If
these suppliers were suddenly left without CMS-approved accreditation
they would have to seek new accreditation from a CMS-approved AO. We
estimate that it would take no less than 6 to 9 months for these
suppliers to complete the reaccreditation process and obtain new CMS-
approved accreditation. We are concerned that during the time that
these suppliers were undergoing the reaccreditation process, they would
not be able to receive reimbursement from Medicare for any services
furnished to Medicare beneficiaries. For many of these suppliers,
Medicare beneficiaries make up a large portion of their client
population and provides a large source of revenue for them. Therefore,
these suppliers are likely to suffer significant hardship if left
without CMS-approved accreditation for a 6 to 9 month period. Also, if
these suppliers were not able to provide services to Medicare
beneficiaries for an extended period of time, it may create access to
care issue for Medicare beneficiaries for the services provided by
these suppliers. For this reason, CMS will recognize an accreditation
for a 1 year period after Federal Register notification that CMS's
approval of the non-certified provider or supplier's accreditation
organization is being withdrawn.
Because we propose to add the same requirements for ADI, HIT, DSMT,
and DMEPOS suppliers, and clinical laboratories, we would add cross
references to the provisions in Sec. 488.5(f) for these suppliers so
that they would be subject to the same proposed requirements for a
change of ownership. Specifically, for DSMT suppliers at Sec. 410.142,
we propose to add a new paragraph (k); for ADI suppliers at Sec.
414.68, we propose to add a new paragraph (j); for DMEPOS at Sec.
424.58, we propose to add a new paragraph (f); for HIT suppliers at
Sec. 488.1030, we propose to add new paragraph (g); and for
laboratories at Sec. 493.553, we propose to add a new paragraph (e).
III. Solicitation of Comments
We are soliciting public comments related to our proposed
regulatory requirements, which would govern of the transfer of the
existing CMS approval for accreditation programs when there is a change
of ownership event of an AO, and more specifically, the requirement for
the proposed new owner or transferee to submit an applications to CMS
with documentation, which shows that the CMS-approved transferred
accreditation programs will continue to perform its tasks safely and
effectively after a change in ownership has occurred to insure the
ongoing effectiveness of the approved accreditation program(s) and to
minimize risk to patient safety.
While we are soliciting comments on the general provision of
requiring an application to be filed with CMS, we are specifically
seeking comments on the following areas:
Documentation Requirements: Financial statements, a
transition plan and other relevant information as deemed necessary.
Written Acknowledgements: Requirement for AOs to provide
written acknowledgement that it understands the financial and legal
responsibilities involved with the change of ownership process.
We are also requesting that stakeholders provide us with comments
on additional information they may believe to be critical to submit to
CMS for a change of ownership of AOs. We welcome any feedback received
that is related to the text of this proposed rule and will take the
comments under consideration for final rulemaking.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
publish a 60-day notice in the Federal Register and 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 the use of automated
collection techniques.
We are soliciting public comment on each of the section
3506(c)(2)(A)-required issues for the following information collection
requirements (ICRs).
Wage Data
To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' (BLS') May 2016 National Occupational Employment and Wage
Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, the following table presents the mean
hourly wage, the cost of fringe benefits and overhead (calculated at
100 percent of salary), and the adjusted hourly wage.
[[Page 18753]]
Table 1--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Adjusted
BLS occupation title Occupation Mean hourly hourly wage ($/
code wage ($/hr) hr)
----------------------------------------------------------------------------------------------------------------
Registered Nurse................................................ 29-1141 $35.36 $70.72
Medical or Health Services Manager.............................. 11-9111 53.69 107.38
----------------------------------------------------------------------------------------------------------------
As indicated, we are adjusting our employee hourly wage estimates
by a factor of 100 percent. This is necessarily a rough adjustment,
both because fringe benefits and overhead costs vary significantly from
employer to employer, and because methods of estimating these costs
vary widely from study to study. Nonetheless, there is no practical
alternative and we believe that doubling the hourly wage to estimate
total cost is a reasonably accurate estimation method.
1. Documentation Requirements
At Sec. 488.5(f)(1), we propose that the AO that is the subject of
the transaction provide notice to CMS that it intends to request
approval for a change of ownership. This initial notice would be
minimal such as a coversheet, email, or any type of formal notice and
would be included in the additional documentation requirements of Sec.
488.5(f)(2).
At Sec. 488.5(f)(2)(i) and (ii), we propose that the prospective
purchaser or transferee provide three most recent audited financial
statements of the organization that demonstrate that the organization's
staffing, funding, and other resources are adequate to perform the
required surveys and related activities. Additionally, we would require
the name and address of the legal entity that would be the owner of the
new AO. We believe that this information is documentation that would be
easily accessible and require minimal time to gather and submit.
Therefore, we have considered that the cost burden for the AO to submit
the financial statements and other information deemed necessary by CMS
would be approximately $70.72. We believe it is likely that the AOs use
a registered nurse to gather information; therefore, according to the
U.S. Bureau of Labor Statistics, the mean hourly wage for a registered
nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm) and we
estimate the time to gather the financial statements would not exceed
one hour. The wage rate would be doubled to include overhead and fringe
benefits. The AO would incur a cost burden in the amount of $70.72 for
the preparation of the response to CMS (1 hour x $70.72)
At Sec. 488.5(f)(2)(iii), we also propose to require the
prospective purchaser or transferee to submit a transition plan that
summarizes the details of how the accreditation functions will be
transitioned to the new owner. While most existing AOs engaged in
business transactions such as a change of ownership would have already
developed a transition plan as proposed under Section II of this
proposed rule, this process will be more time consuming. The
development of a transition plan would take approximately 45 hours of
time to gather, obtain, or prepare all documentation for submission. We
estimate that the AO would have a total of two staff work on transition
plan and that the staff would likely be clinicians such as registered
nurse or medical or health services manager, as they currently serve in
roles for submission of general accrediting approvals. According to the
U.S. Bureau of Labor Statistics, the mean hourly wage for a registered
nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm) and the
mean hourly wage for a medical or health services manager is $53.69
(https://www.bls.gov/oes/current/oes119111.htm). Therefore, we estimate
that the AOs would incur wages for 45 hours of time by a registered
nurse and wages for 45 hours of time by a medical or health services
manager in the amount of $8,014 (45 hours x $70.72 per hour = $3,182) +
(45 hours x $107.38 = $4,832 per hour) +.
2. Written Acknowledgements
At Sec. 488.5(f)(3), we propose the purchasing AO to provide
several written acknowledgements. At Sec. 488.5(f)(3)(i), we are
proposing to require the purchaser or transferee to provide written
acknowledgement that it understands the financial and legal
responsibilities involved with the change of ownership process. We
believe this written acknowledgement would be developed by a health
services manager, as they currently serve in roles for submission of
general accrediting approvals. According to the U.S. Bureau of Labor
Statistics, the mean hourly wage for a and the mean hourly wage for a
medical or health services manager is $53.69 (https://www.bls.gov/oes/current/oes119111.htm) and we believe this proposed written notice
would not exceed 1 hour to develop; therefore, the burden associated
would be $70.72 ($53.69 x 1 hour x 2 to include overhead and fringe
benefits).
At Sec. 488.5(f)(3)(ii), we propose to require the purchasing AO
to provide written acknowledgement that it agrees to operate the new AO
as defined by CMS' standards under Sec. Sec. 488.5 and 488.9, as well
as include acknowledgements on any program reviews or probationary
terms. This would be a minimal cost burden as we are not defining a
specific format for the written acknowledgement. Therefore, according
to the U.S. Bureau of Labor Statistics, the mean hourly wage for a and
the mean hourly wage for a medical or health services manager is $53.69
(https://www.bls.gov/oes/current/oes119111.htm) and we believe this
proposed written notice would not exceed 1 hour to develop, therefore
the burden associated would be $70.72 ($53.69 x 1 hour x 2 to include
overhead and fringe benefits).
At Sec. 488.5(f)(3)(iii), we are proposing to require the
purchasing AO to provide written acknowledgement that would not operate
the accreditation program until it received a notice of approval of the
transfer of the CMS approved accreditation program from CMS. Given this
requirement is minimal and the purchasing AO is already required to
include a written acknowledgment as outlined at proposed Sec.
488.5(f)(3)(ii), it is likely that this written notice would include
both acknowledgements; therefore, we would include this in the hour of
burden and cost described under Sec. 488.5(f)(3)(ii) above.
At Sec. 488.5(f)(5), we propose to require the purchasing AO to
provide documentation within 15 days after the sale confirming the
change of ownership. Given that this would be a standard business
practice or documentation that would generally be required to confirm
the sale outside of these proposed requirements, this burden to provide
proof of sale would be minimal. This would solely require
[[Page 18754]]
the purchasing AO to provide a copy; therefore, we estimate the cost to
be $53.39. According to the U.S. Bureau of Labor Statistics, the mean
hourly wage for a and the mean hourly wage for a medical or health
services manager is $53.69 (https://www.bls.gov/oes/current/oes119111.htm) and this proposed written notice would only require 30
minutes to provide a copy to CMS via electronic methods (email);
therefore, the burden associated would be $53.69 ($26.84 x 0.5 hours x
2 to include overhead and fringe benefits).
Finally, there is potential for AOs to incur a cost burden for the
wages of the AO staff that are involved with reviewing CMS' additional
requests for information and the preparation of the written
acknowledgements. The AO staff that would review information requested
by CMS regarding the change of ownership would be a clinician such as
registered nurse, as is generally the case in AO applications seeking
deeming authority. According to the U.S. Bureau of Labor Statistics,
the mean hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). In order to include overhead
and fringe benefits the wage is doubled. Therefore, the AO would incur
a cost burden in the amount of $70.72 for the preparation of the
response to CMS (1 hour x $70.72).
We want to emphasize that these anticipated costs and burdens are
only subject to those AOs seeking a change of ownership. To date, there
has only been one change of ownership request of an AO in over 20 years
or more, therefore this occurrence is rare.
The requirements and burden will be submitted to OMB under (OMB
control number 0938-New).
V. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VI. Regulatory Impact Statement
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget. We have
examined the impacts of this rule as required by Executive Order 12866
on Regulatory Planning and Review (September 30, 1993), Executive Order
13563 on Improving Regulation and Regulatory Review (January 18, 2011),
the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96
354), section 1102(b) of the Social Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999), the Congressional
Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing
Regulation and Controlling Regulatory Costs (January 30, 2017).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order. A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). We do not
expect this rule to reach that threshold, and thus it is neither
economically significant under E.O. 12866, nor a major rule under the
Congressional Review Act.
Burden for Change of Ownership Among Accrediting Organizations
The AOs which seek to sell or transfer or purchase another AO and
undergo a change of ownership would incur time and cost burdens
associated with the preparation of the information they submit to CMS
to request approval of their new accreditation program under the change
of ownership. This would include the preparation, gathering or
obtaining of all the documentation required in proposed Sec. 488.5(f).
While we recognize that most existing AOs would likely be familiar
and have majority of the documentation CMS is requesting at proposed
Sec. 488.5(f), we believe that due to the need for the selling or
transferring and purchasing AOs to submit documentation for both
entities, that this would take approximately 2 hours of time to gather,
obtain or prepare all documentation required by proposed Sec.
488.5(f). It would take approximately 2 hours as the AOs have
previously submitted an application to CMS requesting approval of their
accreditation program; therefore, would already be familiar with the
application process and requirements and have the majority of the
documents requested under the change of ownership, readily available.
The AOs (selling or transferring and purchasing) would incur costs
associated with the preparation and submission of the requested
documents, development of the written acknowledgement letters, and
submission of the documents. The AO would incur costs for the wages of
all AO staff that work on the preparation of the change of ownership
application. We estimate that the AO would have a total of two staff
work on the preparation of the application. We believe that the AO
staff that prepare the application would likely be clinicians such as
registered nurse or medical or health services manager, as they
currently serve in roles for submission of general accrediting
approvals. According to the U.S. Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm) and the mean hourly wage for a medical or health
services manager is $53.69 (https://www.bls.gov/oes/current/oes119111.htm). Therefore, we estimate that the AOs would incur wages
for 2 hours of time by a registered nurse and wages for 2 hours of time
by a medical or health services manager in the amount of $356.20 (2
hours x $35.36 per hour = $70.72) + (2 hours x $53.69 = $107.38) +
($178.10 for fringe benefits and overhead, estimated at 100% of the
hourly wage).
Furthermore, under proposed Sec. 488.5(e)(8), we would require the
AOs to provide additional information as requested by CMS to ensure the
continuity of oversight for facilities currently accredited. Therefore,
there is potential for AOs to incur a cost burden for the wages of the
AO staff that are involved with reviewing CMS's additional requests for
information and the preparation of the documents and program standards.
The AO staff that would review information requested by
[[Page 18755]]
CMS regarding the change of ownership would be a clinician such as
registered nurse, as is generally the case in AO applications seeking
deeming authority. According to the U.S. Bureau of Labor Statistics,
the mean hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the AO would incur a
cost burden in the amount of $70.72 for the preparation of the response
to CMS (1 hour x $35.36 per hour = $35.36) + ($35.36 for fringe
benefits and overhead).
We want to emphasize that these anticipated costs and burdens are
only subject to those AOs seeking a change of ownership. To date, there
has only been one change of ownership request of an AO in over 20 years
or more, therefore this occurrence is rare in its entirety.
As these change of ownerships are rare among AOs, we do not believe
that the burden would be substantial. We are soliciting comments,
specifically from stakeholders and AOs and request AOs to submit their
comments to include a breakdown of potential costs they would estimate
for this to be completed.
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of less than $7.5 million to $38.5 million in any 1 year.
Individuals and states are not included in the definition of a small
entity. We are not preparing an initial regulatory flexibility analysis
because we have determined, and the Secretary certifies, that this
proposed rule would not have a significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 603 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a Metropolitan Statistical Area for Medicare
payment regulations and has fewer than 100 beds. We are not preparing
an analysis for section 1102(b) of the Act because we have determined,
and the Secretary certifies, that this proposed rule would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2019, that
threshold is approximately $154 million. This rule will have no
consequential effect on state, local, or tribal governments or on the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. Since this regulation does not impose any costs on state
or local governments, the requirements of Executive Order 13132 are not
applicable.
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs, was issued on January 30, 2017, and requires that the
costs associated with significant new regulations ``shall, to the
extent permitted by law, be offset by the elimination of existing costs
associated with at least two prior regulations.'' OMB's interim
guidance, issued on April 5, 2017, https://www.whitehouse .gov/sites/
whitehouse.gov/files/omb/memoranda/2017/M-17-21-OMB.pdf, explains that
for Fiscal Year 2017 the above requirements only apply to each new
``significant regulatory action that imposes costs.'' It has been
determined that this proposed rule is not a ``significant regulatory
action'' and thus does not trigger the above requirements of Executive
Order 13771.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 410
Health facilities, Health professions, Diseases, Laboratories,
Medicare, Reporting and recordkeeping requirements, Rural areas,
Supplementary Medical Insurance (SMI) benefits, X-rays.
42 CFR Part 414
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping
requirements
42 CFR Part 424
Conditions for Medicare payment, Emergency medical services, Health
facilities, Health professions, Medicare, Reporting and recordkeeping
requirements.
42 CFR Part 488
Administrative practice and procedure, Health facilities, Medicare,
Reporting and recordkeeping requirements, Survey, certification, and
enforcement procedures
42 CFR Part 493
Administrative practice and procedure, Grant programs--health,
Health facilities, Laboratories, Medicaid, Medicare, Penalties,
Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services propose to amend 42 CFR chapter IV as follows:
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
0
1. The authority citation for part 410 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.
0
2. Section 410.142 is amended by adding paragraph (k) to read as
follows:
Sec. 410.142 CMS process for approving national accreditation
organizations.
* * * * *
(k) Change of ownership. An accreditation organization whose
accreditation program(s) is (are) approved and recognized by CMS that
wishes to undergo a change of ownership is subject to the requirements
set out at Sec. 488.5(f) of this chapter.
PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES
0
3. The authority citation for part 414 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395hh, and 1395rr(b)(l).
0
4. Section 414.68 is amended by adding paragraph (j) to read as
follows:
Sec. 414.68 Imaging accreditation.
* * * * *
(j) Change of ownership. An accreditation organization whose
accreditation program(s) is (are) approved and recognized by CMS that
wishes to undergo a change of ownership are subject to the requirements
set out at Sec. 488.5(f) of this chapter.
[[Page 18756]]
PART 424--CONDITIONS FOR MEDICARE PAYMENT
0
5. The authority citation for part 424 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh.
0
6. Section 424.58 is amended by adding paragraph (f) to read as
follows:
Sec. 424.58 Accreditation.
* * * * *
(f) Change of ownership. An accreditation organization whose
accreditation program(s) is (are) approved and recognized by CMS that
wishes to undergo a change of ownership are subject to the requirements
outlined under Sec. 488.5(f) of this chapter.
PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES
0
7. The authority citation for part 488 continues to read as follows:
Authority: 42 U.S.C. 1302; and 1395hh.
0
8. Section 488.5 is amended by adding paragraph (f) to read as follows:
Sec. 488.5 Application and re-application procedures for national
accrediting organizations.
* * * * *
(f) Change of ownership. What Constitutes Change of Ownership. A
description of what could constitute a change of ownership with respect
to a national accrediting organization are those activities described
in Sec. 489.18(a)(1) through (3) of this chapter.
(1) Notice to CMS. Any CMS-approved accrediting organization that
is contemplating or negotiating a change of ownership for must notify
CMS of the change of ownership.
(i) This notice requirement applies to any national accrediting
organization with CMS-approved accreditation program(s) that is the
subject of a potential or actual change of ownership transaction,
including accrediting organizations for Advanced Diagnostic Imaging
(ADI) suppliers; Home Infusion Therapy (HIT) suppliers; Diabetic Self-
Management Training (DSMT) entities, Durable Medical Equipment
Prosthetics, Orthotics and Supplies (DMEPOS) suppliers, and clinical
laboratories.
(ii) This notice must be provided to CMS in writing.
(iii) This notice must be provided to CMS no less than 90 days
prior to the anticipated effective date of the change of ownership
transaction.
(2) Information submitted with the request for approval for change
of ownership transaction. The person(s) or organization(s) acquiring an
existing CMS-approved accrediting organization or accreditation
programs (that is, purchaser, buyer or transferee) through a change of
ownership transaction must do the following:
(i) Seek approval from CMS for the purchase or transfer of the
existing CMS approval for the accreditation program(s) to be
transferred in the change of ownership event; and
(ii) Meet the requirements of paragraphs (f)(2)(iii) through (f)(4)
of this section to demonstrate that the entities that will be
accredited with the transferred accrediting program(s) continue to meet
or exceed the applicable Medicare conditions or requirements.
(iii) The following information must be submitted to CMS in the
purchaser's/buyer's/transferee's request for approval of a transfer of
the existing CMS approval for the accreditation program(s) to be
transferred in the change or ownership transaction:
(A) The legal name and address of the new owner;
(B) The three most recent audited financial statements of the
organization that demonstrate the organization's staffing, funding and
other resources are adequate to perform the required surveys and
related activities;
(C) A transition plan that summarizes the details of how the
accreditation functions will be transitioned to the new owner,
including:
(1) Changes to management and governance structures including
current and proposed organizational charts;
(2) A list of the CMS-approved accreditation programs that will be
transferred to the purchaser/buyer/transferee,
(3) Employee changes, if applicable,
(4) Anticipated timelines for action;
(5) Plans for notification to employees; and
(6) Any other relevant information that CMS finds necessary.
(3) Written acknowledgements. The purchaser/buyer/transferee must
provide a written acknowledgement to CMS, which states the following:
(i) If the application for the transfer of the existing CMS-
approval for the accreditation program(s) to be transferred in the
change of ownership transaction is approved by CMS, said purchaser/
buyer/transferee must assume complete responsibility for the operations
(that is, managerial, financial, and legal) of the CMS-approved
accreditation programs transferred, immediately upon the finalization
of the change of ownership transaction.
(ii) The purchaser/buyer/transferee agrees to operate the
transferred CMS-approved accreditation program(s) under all of the CMS
imposed terms and conditions, to include program reviews and
probationary status terms, currently approved by CMS; and
(iii) The purchaser/buyer/transferee must not operate the
accreditation program(s) it acquired in the change in ownership
transaction as CMS approved accreditation programs, until the effective
date set forth within the notice of approval from CMS.
(iv) The purchaser/buyer/transferee agrees to operate the
transferred CMS-approved accreditation program(s) under all of the
terms and conditions found at Sec. Sec. 488.5 through 488.9.
(4) Notification. The following written notifications are required
after the change of ownership transaction has been approved by CMS:
(i) All parties to the change of ownership transaction must notify
the providers and suppliers affected by such change within 15 calendar
days after being notified of CMS's approval of the transfer of the
existing CMS-approval for the accreditation programs to be transferred
in the change of ownership transaction.
(ii) If applicable, the purchaser/buyer/transferee must acknowledge
in writing to CMS that the accrediting organization or accreditation
program(s) being acquired through a purchase or transfer of ownership
was under a performance review or under probationary status at the time
the change of ownership notice was submitted.
(5) Federal Register notice. CMS will publish a notice of approval
in the Federal Register of the transfer of the existing CMS approval
for the accreditation program(s) to be transferred to the new owner,
only after CMS receives written confirmation from the new owner that
the change of ownership has taken place.
(6) Notification to parties in the event that CMS does not approve
the transfer of the existing CMS approval. In the event that CMS does
not approve the transfer of the existing CMS approval for the
accreditation program(s) to be transferred in the change of ownership
transaction, CMS will notify all parties to the change of ownership
transaction of such in writing.
(7) Withdrawal of CMS approval for transferred accreditation
programs due to failure to notify CMS of intent to transfer
accreditation programs. In the event that CMS was not made aware of or
did not approve the transfer of the existing CMS-approval for the
accreditation program(s) to be transferred under a change of ownership:
[[Page 18757]]
(i) The existing AO would be permitted to continue operating their
existing CMS-approved accreditation programs, if the change of
ownership transaction was not completed, unless our review of the
transaction revealed issues with the AO that were the subject of the
un-finalized change of ownership transaction that was previously
unknown to CMS.
(ii) If a change of ownership transaction was completed without
notice to CMS or the approval of CMS, CMS would be able to withdraw the
existing approval of the AO's accreditation programs in accordance with
Sec. 488.8(c)(3)(ii) and (iii) of this section.
(8) Withdrawal of CMS approval for accreditation programs which are
transferred notwithstanding CMS' disapproval of the transfer. In the
event that the parties complete the change of ownership transaction,
notwithstanding CMS disapproval and the purchaser/buyer/transferee
attempts to operate the transferred accreditation program(s) under the
CMS-approval granted to the previous owner, CMS will withdraw the
existing approval of the transferred accreditation program(s) in
accordance with the procedures set out at Sec. 488.8(c)(3)(ii) and
(iii).
(9) Requirements for continuation of a deemed status accreditation
of Medicare-certified providers and suppliers after CMS withdraws the
existing approval of the transferred accreditation program(s). If CMS
withdraws the existing approval of the transferred accreditation
program(s) because the change of ownership transaction was completed
without notice to CMS or the approval of CMS, an affected Medicare-
Certified provider or supplier's deemed status will continue in effect
for 180 calendar days if the Medicare-Certified provider or supplier
takes the following steps set forth is Sec. 488.8(g).
(i) The Medicare-certified provider or supplier must submit an
application to another CMS-approved accreditation program within 60
calendar days from the date of publication of the removal notice in the
Federal Register; and
(ii) The Medicare-certified provider or supplier must provide
written notice to the SA that it has submitted an application for
accreditation under another CMS-approved accreditation program within
this same 60-calendar day timeframe in accordance with Sec. 488.8(g).
(iii) Failure to comply with the timeframe requirements specified
in Sec. 488.8(g) will place the provider or supplier under the SA's
authority for continued participation in Medicare and on-going
monitoring.
(10) Requirements for continuation of accreditation for non-
certified suppliers when CMS withdraws the existing approval of the
transferred accreditation program(s). If CMS withdraws its existing
approval from a transferred non-certified accreditation program for
Advanced Diagnostic Imaging (ADI) suppliers; Home Infusion Therapy
(HIT) suppliers; Diabetic Self-Management Training (DSMT) entities;
Durable Medical Equipment Prosthetics, Orthotics and Supplies (DMEPOS)
suppliers; or clinical laboratories, because a change of ownership
transaction was completed without notice to or the approval of CMS,
such affected non-certified supplier's deemed status would continue in
effect for 1 year after the removal of the existing CMS accreditation
approval, if such non-certified supplier take the steps specified
paragraphs (f)(10)(i) and (ii) of this section--
(i) The non-certified supplier must submit an application to
another CMS-approved accreditation program within 60 calendar days from
the date of publication of the removal notice in the Federal Register;
and
(ii) The non-certified supplier must provide written notice to CMS
stating that it has submitted an application for accreditation under
another CMS-approved accreditation program within the 60-calendar days
from the date of publication of the removal notice in the Federal
Register.
(iii) Failure to comply with the above-stated timeframe
requirements will result in de-recognition of such provider or
supplier's accreditation.
0
9. Section 488.1030 is amended by adding paragraph (g) to read as
follows:
Sec. 488.1030 Ongoing review of home infusion therapy accrediting
organizations.
* * * * *
(g) Change of ownership. An accrediting organization that wishes to
undergo a change of ownership is subject to the requirements set out at
Sec. 488.5(f).
PART 493--LABORATORY REQUIREMENTS
0
10. The authority citation for part 493 is revised to read as follows:
Authority: 42 U.S.C. 263a, 1302, 1395x(e), the sentence
following 1395x(s)(11) through 1395x(s)(16).
0
11. Section 493.553 is amended by adding paragraph (e) to read as
follows:
Sec. 493.553 Approval process (application and reapplication) for
accreditation organizations and State licensure programs.
* * * * *
(e) Change of ownership. An accrediting organization that wishes to
undergo a change of ownership is subject to the requirements set out at
Sec. 488.5(f) of this chapter.
Dated: November 7, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: April 2, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-08939 Filed 4-30-19; 11:15 am]
BILLING CODE 4120-01-P
