[Federal Register Volume 75, Number 101 (Wednesday, May 26, 2010)]
[Proposed Rules]
[Pages 29479-29487]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-12647]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 482 and 485

[CMS-3227-P]
RIN 0938-AQ05


Medicare and Medicaid Programs: Proposed Changes Affecting 
Hospital and Critical Access Hospital (CAH) Conditions of Participation 
(CoPs): Credentialing and Privileging of Telemedicine Physicians and 
Practitioners

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the conditions of 
participation (CoPs) for both hospitals and critical access hospitals 
(CAHs). These revisions would allow for a new credentialing and 
privileging process for physicians and practitioners providing 
telemedicine services.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on July 26, 2010.

ADDRESSES: In commenting, please refer to file code CMS-3227-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four 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 instructions under 
the ``More Search Options'' tab.
    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-3227-P, P.O. Box 8010, Baltimore, MD 21244-1850.

    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-3227-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 before the close of the comment period 
to either of the following addresses:

a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201. (Because access to the interior of the Hubert H. Humphrey 
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.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.

    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    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 following the 
instructions at the end of the ``Collection of Information 
Requirements'' section in this document.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: CDR Scott Cooper, USPHS (410) 786-
9465. Marcia Newton, (410) 786-5265. Jeannie Miller, (410) 786-3164.

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 Web 
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions 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, MD 21244, on Monday through Friday of each week from 8:30 
a.m. to 4 p.m. EST. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Electronic Access

    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. Free public access is available on a Wide 
Area Information Server (WAIS) through the Internet and via 
asynchronous dial-in. Internet users can access the database by using 
the World Wide Web (the Superintendent of Documents' home page address 
is http://www.gpoaccess.gov/index.html), by using local WAIS client 
software, or by telnet to swais.access.gpo.gov, then login as guest (no 
password required). Dial-in users should use communications software 
and modem to call (202) 512-1661; type swais, then login as a guest (no 
password required).

[[Page 29480]]

I. Background

    The current Medicare Hospital conditions of participation (CoPs) 
for credentialing and privileging of medical staff at 42 CFR 
482.12(a)(2) and 482.22(a)(2) require the governing body of the 
hospital to make all privileging decisions based upon the 
recommendations of its medical staff after the medical staff has 
thoroughly examined and verified the credentials of practitioners 
applying for privileges, and also used specific criteria to determine 
whether an individual practitioner should be privileged at the 
hospital. The current critical access hospital (CAH) CoPs at 42 CFR 
485.616(b) require every CAH that is a member of a rural health network 
to have an agreement for review of physicians and practitioners seeking 
privileges at the CAH. The agreement must be with a hospital that is a 
member of the network, a Medicare Quality Improvement Organization 
(QIO), or another qualified entity identified in the State's rural 
health plan. In addition, the services provided by each doctor of 
medicine or osteopathy at the CAH must be evaluated by one of these 
same three types of outside parties. These requirements apply to all 
physicians and practitioners seeking privileges at the hospital or CAH, 
regardless of whether services will be provided in-person and on-site 
at the hospital or CAH, or remotely through a telecommunications 
system. CMS regulations currently require hospitals and CAHs receiving 
telemedicine services to privilege each physician or practitioner 
providing services to its patients as if such practitioner were on-
site.
    While hospitals may use third party credentialing verification 
organizations to relieve the time-consuming burden of compiling and 
verifying the credentials of practitioners applying for privileges, the 
hospital's governing body is still responsible for all privileging 
decisions. Similarly, each CAH is required to have its privileging 
decisions made by either its governing body or the person responsible 
for the CAH.
    In the past, hospitals that were accredited by the Joint Commission 
(TJC) were deemed to have met the Medicare CoPs, including the 
credentialing and privileging requirements, under TJC's statutory 
deeming authority. Section 125 of the Medicare Improvements for 
Patients and Providers Act of 2008 (Pub. L. 110-275, July 15, 2008) 
(MIPPA), terminated the statutory recognition of TJC's hospital 
accreditation program, effective July 15, 2010. The law requires TJC to 
secure CMS approval of its standards in order to confer Medicare deemed 
status on hospitals after July 15, 2010. This means that we do not have 
the discretion under the law to accept TJC policies or standards that 
do not meet or exceed the Medicare CoPs. One TJC policy that has been 
in direct conflict with the CoPs has been TJC's practice of permitting 
``privileging by proxy,'' which has allowed TJC-accredited hospitals to 
utilize a different methodology to privilege ``distant-site'' (as that 
term is defined at section 1834(m)(4)(A) of the Social Security Act 
(the Act)) physicians and practitioners. In short, TJC privileging by 
proxy standards allowed for one TJC-accredited facility to accept the 
privileging decisions of another TJC-accredited facility. Hospitals 
that have used this method to privilege distant-site medical staff 
technically did not meet CMS requirements that applied to other 
hospitals even though they were TJC-accredited. When CMS learned of 
specific instances of such noncompliance through on-site surveys by 
State Survey Agencies, the hospital was required to change its policies 
to come into compliance.
    As of July 15, 2010, TJC will be statutorily required to enforce 
CMS requirements regarding privileging physicians and practitioners in 
the hospitals they accredit, both those providing and those receiving 
telemedicine services. TJC-accredited hospitals, therefore, are 
concerned that they may be unable to meet the long-standing CMS 
privileging requirements while sustaining their current telemedicine 
agreements. Small hospital and CAH medical staffs, in particular, are 
concerned about the burden of privileging hundreds of specialty 
physicians and practitioners that large academic medical centers make 
available to them.
    Upon reflection, we came to the conclusion that our present 
requirement is a duplicative and burdensome process for physicians, 
practitioners, and the hospitals involved in this process, particularly 
small hospitals, which often lack adequate resources to fully carry out 
the traditional credentialing and privileging process for all of the 
physicians and practitioners that may be available to provide 
telemedicine services. In addition to the costs involved, small 
hospitals often do not have in-house medical staff with the clinical 
expertise to adequately evaluate and privilege the wide range of 
specialty physicians that larger hospitals can provide through 
telemedicine services.
    CMS has become increasingly aware, through outreach efforts and 
communications with the various stakeholders in the telemedicine 
community (for example, large academic medical centers that provide 
telemedicine services; small hospitals that make effective use of these 
services for the benefit of their patients; representative professional 
organizations; and Congressional representatives whose various 
constituencies are made up of telemedicine practitioners as well as the 
patients receiving telemedicine services), of the urgent need to revise 
the CoPs in this area so that access to these vital services may 
continue in a manner that is both safe and beneficial for patients and 
is free of unnecessary and duplicative regulatory impediments.

II. Provisions of the Proposed Rule

    The following provisions of this proposed rule would apply to all 
hospitals and CAHs participating in the Medicare and Medicaid programs. 
Section 1861(e)(1) through (9) of the Act: (1) Defines the term 
``hospital''; (2) lists the statutory requirements that a hospital must 
meet to be eligible for Medicare participation; and (3) specifies that 
a hospital must also meet other requirements as the Secretary finds 
necessary in the interest of the health and safety of the hospital's 
patients. Under this authority, the Secretary has established in the 
regulations 42 CFR part 482, the requirements that a hospital must meet 
to participate in the Medicare program. Section 1905(a) of the Act 
provides that Medicaid payments may be applied to hospital services. 
Regulations at 42 CFR 440.10(a)(3)(iii) require hospitals to meet the 
Medicare CoPs to qualify for participation in Medicaid.
    We recognize the advantages and benefits that telemedicine provides 
for patients and are interested in reducing the burden and the 
duplicative efforts of the traditional credentialing and privileging 
process for Medicare-participating hospitals, both those which provide 
telemedicine services and those which use such services. Therefore, we 
are proposing to revise both the hospital and CAH credentialing and 
privileging requirements to eliminate these regulatory impediments and 
allow for the advancement of telemedicine nationwide while still 
protecting the health and safety of patients. We believe that these 
proposed revisions would preserve and strengthen the core values of the 
credentialing and privileging process for all hospitals: accountability 
to all patients, and assurance that medical staff are privileged to 
provide services in the

[[Page 29481]]

hospital based on evaluation of the practitioner's medical competency.

Hospital CoPs (Sec.  482.12 and Sec.  482.22)

    The proposed revisions to the hospital CoPs for the credentialing 
and privileging of telemedicine physicians and practitioners are 
contained within two separate CoPs: Sec.  482.12, ``Governing body,'' 
and Sec.  482.22, ``Medical staff.''
    For the Governing body CoP, we are proposing to add a new 
paragraph, Sec.  482.12(a)(8), which would require the hospital's 
governing body to ensure that, when telemedicine services are furnished 
to the hospital's patients through an agreement with a Medicare-
participating hospital (the ``distant-site'' hospital as defined at 
section 1834(m)(4)(A) of the Act), the agreement must specify that it 
is the responsibility of the governing body of the distant-site 
hospital providing the telemedicine services to meet the existing 
requirements in Sec.  482.12(a)(1) through (a)(7) with regard to its 
physicians and practitioners who are providing telemedicine services. 
These existing provisions cover the distant-site hospital's governing 
body responsibilities for its medical staff that all Medicare-
participating hospitals must meet.
    The proposed requirements at Sec.  482.12(a)(8) would allow the 
governing body of the hospital whose patients are receiving the 
telemedicine services to grant privileges based on its medical staff 
recommendations, which would rely on information provided by the 
distant-site hospital, as a more efficient means of privileging the 
individual distant-site physicians and practitioners providing the 
services.
    This provision would be accompanied by the proposed requirement in 
the ``Medical staff'' CoP at Sec.  482.22(a)(3), which would provide 
the basis on which the hospital's governing body, through its agreement 
as noted above, can choose to have its medical staff rely upon 
information furnished by the distant-site hospital when making 
recommendations on privileges for the individual physicians and 
practitioners providing such services. This option would allow the 
hospital's medical staff to rely upon the credentialing and privileging 
decisions of the distant-site hospital in lieu of the current 
requirements at Sec.  482.22(a)(1) and (a)(2), which require the 
hospital's medical staff to conduct individual appraisals of its 
members and examine the credentials of each candidate in order to make 
a privileging recommendation to the governing body. This option would 
not prohibit a hospital's medical staff from continuing to perform its 
own periodic appraisals of telemedicine members of its staff, nor would 
it bar them from continuing to use the traditional credentialing and 
privileging process required under the current regulations. The intent 
of this proposed requirement is to relieve burden for smaller hospitals 
by providing for a less duplicative and more efficient privileging 
scheme with regard to physicians and practitioners providing 
telemedicine services.
    However, in an effort to ensure accountability to the process, we 
are proposing within this same provision (Sec.  482.22(a)(3)) that the 
hospital, in order to choose this less burdensome option for 
privileging, must ensure that--(1) The distant-site hospital providing 
the telemedicine services is a Medicare-participating hospital; (2) the 
individual distant-site physician or practitioner is privileged at the 
distant-site hospital providing telemedicine services, and that this 
distant-site hospital provides a current list of the physician's or 
practitioner's privileges; (3) the individual distant-site physician or 
practitioner holds a license issued or recognized by the State in which 
the hospital, whose patients are receiving the telemedicine services, 
is located; and (4) with respect to a distant-site physician or 
practitioner granted privileges by the hospital, the hospital has 
evidence of an internal review of the distant-site physician's or 
practitioner's performance of these privileges and sends the distant-
site hospital this information for use in its periodic appraisal of the 
individual distant-site physician or practitioner. We are also 
proposing, at a minimum, the information sent for use in the periodic 
appraisal would have to include all adverse events that may result from 
telemedicine services provided by the distant-site physician or 
practitioner to the hospital's patients and all complaints the hospital 
has received about the distant-site physician or practitioner.
    Within the revisions to the hospital CoPs, we are also proposing 
that additional language be added to the current requirement at Sec.  
482.22(c)(6), which requires that the hospital's medical staff bylaws 
include criteria for determining privileges and a procedure for 
applying the criteria to individuals requesting privileges. We are 
proposing to add language to stipulate that in cases where distant-site 
physicians and practitioners are requesting privileges to furnish 
telemedicine services through an agreement between hospitals, the 
criteria for determining those privileges and the procedure for 
applying the criteria would be subject to the proposed requirements at 
Sec.  482.12(a)(8) and Sec.  482.22(a)(3).

Critical Access Hospital (CAH) CoPs (Sec.  485.616 and Sec.  485.641)

    The proposed revisions to the CAH CoPs are found at Sec.  485.616, 
``Agreements,'' and Sec.  485.641, ``Periodic evaluation and quality 
assurance review.'' However, the majority of the proposed revisions, 
particularly those which mirror the proposed hospital revisions, are 
found in the ``Agreements'' CoP, specifically Sec.  485.616(c). We are 
proposing to add a new standard at Sec.  485.616(c) entitled, 
``Agreements for credentialing and privileging of telemedicine 
physicians and practitioners.''
    The proposed telemedicine credentialing and privileging 
requirements for CAHs are modeled after the hospital requirements, with 
almost no differences in the regulatory language. Since the only 
existing requirements in the CAH CoPs specific to the responsibility of 
the governing body to grant medical staff privileges concerns surgical 
privileges for practitioners, we are proposing to add language that 
follows the language in the hospital requirements at Sec.  482.12(a). 
This language delineates the responsibilities of the governing body for 
the medical staff privileging process.
    At Sec.  485.641(b)(4)(iv), we would make a minor change to the CAH 
CoPs that do not have an equivalent provision in the hospital CoPs. We 
are proposing to add a new requirement that would allow the distant-
site hospital to evaluate the quality and appropriateness of the 
diagnosis and treatment furnished by its own staff when providing 
telemedicine services to the CAH. This proposed requirement would be in 
addition to the three other entities already allowed to perform this 
function under the existing regulations.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 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.

[[Page 29482]]

     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 (ICRs):

A. ICRs Regarding Condition of Participation: Governing Body (Sec.  
482.12)

    Section 482.12(a)(8) would require the governing body of a hospital 
to ensure that, when telemedicine services are furnished to the 
hospital's patients through an agreement with a distant-site hospital, 
the agreement specifies that it is the responsibility of the governing 
body of the distant-site hospital to meet the requirements in 
paragraphs (1) through (7) of this subsection with regard to its 
physicians and practitioners providing telemedicine services. The 
burden associated with this requirement would be the time and effort 
necessary for a hospital's governing body to develop, initially review, 
and annually review the agreement with a distant-site hospital. We 
estimate that 4,860 hospitals (not including 1,314 CAHs) must develop 
the aforementioned written agreement. We also estimate that the 
development and review of the agreement would take 1,440 minutes 
initially and the review would take 360 minutes annually. The total 
cost associated with this proposed requirement is $2,346.

B. ICRs Regarding Condition of Participation: Medical Staff (Sec.  
482.22)

    Section 482.22(a)(3) states that when telemedicine services are 
furnished to a hospital's patients through an agreement with a distant-
site hospital, the governing body of the hospital whose patients are 
receiving the telemedicine services may choose to have its medical 
staff rely upon information furnished by the distant-site hospital when 
making recommendations on privileges for the individual physicians and 
practitioners providing such services. To do this, a hospital's 
governing body must ensure that all of the provisions listed at Sec.  
482.22(a)(3)(i) through (iv) are met. Specifically, Sec.  
482.22(a)(3)(iv) contains a third-party disclosure requirement. Section 
482.22(a)(3)(iv) states that with respect to a distant-site physician 
or practitioner granted privileges, the hospital whose patients are 
receiving the telemedicine services, has evidence of an internal review 
of the distant-site physician's or practitioner's performance of these 
privileges and sends the distant-site hospital such information for use 
in the periodic appraisal of the distant-site physician or 
practitioner. At a minimum, this information would include all adverse 
events that result from the telemedicine services provided by the 
distant-site physician or practitioner to the hospital's patients and 
all complaints the hospital has received about the distant-site 
physician or practitioner.
    The burden associated with this third-party disclosure requirement 
would be the time and effort necessary for a hospital to send evidence 
of a distant-site physician's or practitioner's performance review to 
the distant-site hospital with which it has an agreement for providing 
telemedicine services. We estimate 4,860 hospitals (not including 1,314 
CAHs) would have to comply with this requirement. Similarly, we 
estimate that each disclosure would take 60 minutes and that there 
would be approximately 32 annual disclosures. The estimated cost 
associated with this proposed requirement is $1,248.

C. ICRs Regarding Condition of Participation: Agreements (Sec.  
485.616)

    Section 485.616(c)(1) would state that the governing body of the 
CAH must ensure that, when telemedicine services are furnished to the 
CAH's patients through an agreement with a distant-site hospital, the 
agreement specifies that it is the responsibility of the governing body 
of the distant-site hospital to meet the proposed requirements listed 
at Sec.  485.616(c)(1)(i) through (vii) and Sec.  485.616(c)(2). The 
burden associated with this proposed requirement would be the time and 
effort necessary for a CAH's governing body to develop, initially 
review, and annually review the agreement with a distant-site hospital. 
We estimate that 1,314 CAHs must develop and review the aforementioned 
written agreement. We also estimate that development and review of the 
agreement would take 1440 minutes initially and the review would take 
360 minutes annually. The total cost associated with this proposed 
requirement is $2,346.
    Section 485.616(c)(2) would state that when telemedicine services 
are furnished to the CAH's patients through an agreement with a 
distant-site hospital, the CAH's governing body or responsible 
individual may choose to rely upon the credentialing and privileging 
decisions made by the governing body of the distant-site hospital for 
individual distant-site physicians or practitioners, if the CAH's 
governing body or responsible individual ensures that all of the 
provisions listed at Sec.  485.616(c)(2)(i) through (iv) are met. The 
burden associated with this third-party disclosure requirement at Sec.  
485.616(c)(2)(iv) would be the time and effort necessary for a CAH to 
send evidence of a distant-site physician's or practitioner's 
performance review to the distant-site hospital with which it has an 
agreement for providing telemedicine services. We estimate 1,314 CAHs 
would have to comply with this proposed requirement. Similarly, we 
estimate that each disclosure would take 60 minutes and that there 
would be approximately 32 annual disclosures. The estimated cost 
associated with this proposed requirement is $1,248.

[[Page 29483]]



                                                                       Table 1--Annual Reporting and Recordkeeping Burden
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                                                                                                                                             Hourly
                                                                                                               Burden per       Total      labor  cost  Total  labor      Total
                      Regulation  section(s)                        OMB  control   Respondents    Responses     response       annual          of          cost of      capital/     Total cost
                                                                         No.                                     (hours)       burden       reporting     reporting    maintenance       ($)
                                                                                                                               (hours)         ($)           ($)       costs  ($)
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Sec.   482.12(a)(8)...............................................      0938-New         4,860         4,860            24       116,640            **     8,942,400             0     8,942,400
                                                                    ............         4,860         4,860             6        29,160            **     2,459,160             0     2,459,160
Sec.   482.22(a)(3)...............................................      0938-New         4,860       155,520             1       155,520            39     6,065,280             0     6,065,280
Sec.   485.616(c)(1)..............................................      0938-New         1,314         1,314            24        31,536            **     2,417,760             0     2,417,760
                                                                    ............         1,314         1,314             6         7,884            **       664,884             0       664,884
Sec.   485.616(c)(2)..............................................      0938-New         1,314        42,048             1        42,048            39     1,639,872             0     1,639,872
                                                                   -----------------------------------------------------------------------------------------------------------------------------
    Total.........................................................  ............         6,174       209,916  ............       382,788  ............  ............  ............  ............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
** Wage rates vary by level of staff involved in complying with the information collection request (ICR). The wage rates associated with the aforementioned information collection requirements
  are listed in Tables 2-9 in the regulatory impact analysis of this proposed rule.


[[Page 29484]]

    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    1. Submit your comments electronically as specified in the 
ADDRESSES section of this proposed rule; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
CMS-3227-IFC.
    Fax: (202) 395-6974; or
    E-mail: OIRA_submission@omb.eop.gov.

IV. 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.

V. Regulatory Impact Analysis

A. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), the 
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), 
section 1102(b) of the Social Security Act (the Act), section 202 of 
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive 
Order 13132 on Federalism (August 4, 1999), and the Congressional 
Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). This proposed 
rule is not an economically significant rule and does not impose 
significant costs. The benefits of finalizing this proposed rule would 
greatly outweigh any costs imposed. Conversely, the negative impacts on 
overall patient health and safety as well as on the operating costs of 
individual hospitals were this rule not to be finalized would be 
significant compared to the minimal cost imposed. Accordingly, we have 
prepared a regulatory impact analysis, which to the best of our 
ability, presents the costs and benefits of the rulemaking.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses, if a rule has a significant impact on a 
substantial number of small entities. For purposes of the RFA, we 
estimate that the great majority of hospitals, including CAHs, are 
small entities as that term is used in the RFA. Individuals and States 
are not included in the definition of a small entity. While we do not 
believe that this proposed rule would have a significant impact on 
small entities, we do believe, as we have stated previously, that this 
rule would have a positive impact by providing immediate regulatory 
relief for these small entities and would negatively impact them if not 
finalized. Therefore, we are voluntarily preparing a Regulatory 
Flexibility Analysis.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. This rule would not have 
a significant impact on small rural hospitals as it is intended to 
relieve the burden on hospitals, particularly on small rural hospitals 
and CAHs, and to reduce or eliminate the impact of the current 
regulatory impediments to efficient operation and patient access to 
essential healthcare services. Therefore, the Secretary has determined 
that this proposed rule would not have a significant negative impact on 
the operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 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 2010, that 
threshold is approximately $135 million. This rule does not contain 
mandates that would impose spending costs on State, local, or tribal 
governments in the aggregate, or by the private sector, of $135 
million.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This proposed rule would not have a substantial direct 
effect on State or local governments, preempt States, or otherwise have 
a Federalism implication.

B. Anticipated Effects

1. Effects on Hospitals and Critical Access Hospitals (CAHs)
    We estimate the costs to hospitals and CAHs to implement this 
proposed rule to be minimal. The major costs are related to the 
agreement between the distant-site hospital and the hospital or CAH at 
which patients who receive the telemedicine services are located. Many 
hospitals and CAHs already have such telemedicine service agreements in 
place and would not incur the initial costs of developing and reviewing 
such an agreement.
    Our figures, as of March 31, 2010, indicate that there were 4,860 
hospitals and 1,314 CAHs (for a total of 6,174) in the United States. 
However, we have no way of determining an exact number on which of 
these hospitals provide telemedicine services and which of these 
hospitals and CAHs receive services, nor can we determine how many 
hospitals and CAHs already have telemedicine agreements. Accordingly, 
we have based on our cost estimates on the higher costs that would be 
incurred if every hospital and CAH in the United States were required 
to develop the agreement, to review it initially, and to review it 
annually. We prepared the cost estimates for hospitals and CAHs 
separately. However, all sides of this equation would require the 
initial services of a hospital or CAH attorney at an average of $66/
hour; a hospital or CAH chief of the medical staff (a physician) at an 
average of $112/hour; and a hospital or CAH administrator at an average 
of $75/hour. For the third-party disclosure requirements, we also 
prepared the cost estimates for hospitals and CAHs separately, though 
both would require the annual services of a medical staff credentialing 
manager or a medical staff coordinator at an average of $39/hour. Our 
salary figures are from http://www.salary.com/. Our estimates of time 
and cost for each aspect of the proposed agreement (development, 
initial review, and annual review), as well as for the third-party 
disclosure, is as follows:

[[Page 29485]]



 Table 2--Information Collection Requirements for a Hospital to Develop an Agreement for Telemedicine Services:
                                                  Initial Cost
----------------------------------------------------------------------------------------------------------------
                                                                 Hourly     Number of     Cost per
                         Individual                               wage        hours      individual   Total cost
----------------------------------------------------------------------------------------------------------------
Attorney....................................................          $66            8         $528  ...........
Physician...................................................          112            2          224        $1052
Hospital Administrator......................................           75            4          300  ...........
----------------------------------------------------------------------------------------------------------------


  Table 3--Information Collection Requirements for a Hospital to Review an Agreement for Telemedicine Services:
                                                  Initial Cost
----------------------------------------------------------------------------------------------------------------
                                                                 Hourly     Number of     Cost per
                         Individual                               wage        hours      individual   Total Cost
----------------------------------------------------------------------------------------------------------------
Attorney....................................................          $66            4         $264  ...........
Physician...................................................          112            2          224         $788
Hospital Administrator......................................           75            4          300  ...........
----------------------------------------------------------------------------------------------------------------


  Table 4--Information Collection Requirements for a Hospital to Review an Agreement for Telemedicine Services:
                                                   Annual Cost
----------------------------------------------------------------------------------------------------------------
                                                                 Hourly     Number of     Cost per
                         Individual                               wage        hours      individual   Total cost
----------------------------------------------------------------------------------------------------------------
Attorney....................................................          $66            2         $132  ...........
Physician...................................................          112            2          224         $506
Hospital Administrator......................................           75            2          150  ...........
----------------------------------------------------------------------------------------------------------------

    Therefore, we estimate the total initial cost to develop and review 
the agreement for all 4,860 hospitals to be $8.9 million. The annual 
cost to review agreements for all hospitals is estimated at $2.5 
million.

    Table 5--Information Collection Requirements for a CAH To Develop an Agreement for Telemedicine Services:
                                                  Initial Cost
----------------------------------------------------------------------------------------------------------------
                                                                 Hourly     Number of     Cost per
                         Individual                               wage        hours      individual  Total  cost
----------------------------------------------------------------------------------------------------------------
Attorney....................................................          $66            8         $528  ...........
Physician...................................................          112            2          224        $1052
CAH Administrator...........................................           75            4          300  ...........
----------------------------------------------------------------------------------------------------------------


Table 6--Information Collection Requirements for a CAH To Review an Agreement for Telemedicine Services: Initial
                                                      Cost
----------------------------------------------------------------------------------------------------------------
                                                                 Hourly     Number of     Cost per
                         Individual                               wage        hours      individual  Total  cost
----------------------------------------------------------------------------------------------------------------
Attorney....................................................          $66            4         $264  ...........
Physician...................................................          112            2          224         $788
CAH Administrator...........................................           75            4          300  ...........
----------------------------------------------------------------------------------------------------------------


 Table 7--Information Collection Requirements for a CAH To Review an Agreement for Telemedicine Services: Annual
                                                      Cost
----------------------------------------------------------------------------------------------------------------
                                                                 Hourly     Number of     Cost per
                         Individual                               wage        hours      individual  Total  cost
----------------------------------------------------------------------------------------------------------------
Attorney....................................................          $66            2         $132  ...........
Physician...................................................          112            2          224         $506
Hospital administrator......................................           75            2          150  ...........
----------------------------------------------------------------------------------------------------------------

    Therefore, we estimate the total initial cost to develop and review 
the agreement for all 1,314 CAHs to be $2.4 million. The annual cost to 
review agreements for all CAHs is estimated at $664,884.

[[Page 29486]]



 Table 8--Information Collection Requirements for a Hospital To Prepare and Send Individual Performance Reviews
                         for Telemedicine Services (Third-Party Disclosure): Annual Cost
----------------------------------------------------------------------------------------------------------------
                                                                 Hourly     Number of     Cost per
                         Individual                               wage        hours      individual  Total  cost
----------------------------------------------------------------------------------------------------------------
Medical Staff Coordinator or Medical Staff Credentialing              $39           32       $1,248       $1,248
 Manager....................................................
----------------------------------------------------------------------------------------------------------------

    Therefore, we estimate the total annual cost to prepare and send 
individual performance reviews for telemedicine services (third-party 
disclosure) for all 4,860 hospitals to be $6.1 million.

  Table 9--Information Collection Requirements for a CAH To Prepare and Send Individual Performance Reviews for
                           Telemedicine Services (Third-Party Disclosure): Annual Cost
----------------------------------------------------------------------------------------------------------------
                                                                            Number of     Cost per
                         Individual                           Hourly wage     hours      individual   Total cost
----------------------------------------------------------------------------------------------------------------
Medical Staff Coordinator or Medical Staff Credentialing              $39           32        $1248        $1248
 Manager....................................................
----------------------------------------------------------------------------------------------------------------

    Therefore, we estimate the total annual cost to prepare and send 
individual performance reviews for telemedicine services (third-party 
disclosure) for all 1,314 CAHs to be $1.6 million.
    The total cost of the information collection requirements for both 
hospitals and CAHs is estimated to be $22.1 million.

C. Conclusion

    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 482

    Grant programs--Health, Hospitals, Medicaid, Medicare, Reporting 
and recordkeeping requirements

42 CFR Part 485

    Grant programs--Health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

    1. The authority citation for part 482 continues to read as 
follows:

    Authority: Secs. 1102, 1871 and 1881 of the Social Security Act 
(42 U.S.C. 1302, 1395hh, and 1395rr), unless otherwise noted.

Subpart B--Administration

    2. Section 482.12 is amended by adding a new paragraph (a)(8) to 
read as follows:


Sec.  482.12  Condition of participation: Governing body.

* * * * *
    (a) * * *
    (8) Ensure that, when telemedicine services are furnished to the 
hospital's patients through an agreement with a distant-site (as 
defined in section 1834(m)(4)(A) of the Act) hospital, the agreement 
specifies that it is the responsibility of the governing body of the 
distant-site hospital to meet the requirements in paragraphs (a)(1) 
through (a)(7) of this section with regard to its physicians and 
practitioners providing telemedicine services. The governing body of 
the hospital whose patients are receiving the telemedicine services 
may, in accordance with Sec.  482.22(a)(3), grant privileges based on 
its medical staff recommendations that rely on information provided by 
the distant-site hospital.
* * * * *

Subpart C--Basic Hospital Functions

    3. Section 482.22 is amended by--
    A. Adding a new paragraph (a)(3).
    B. Revising paragraph (c)(6).
    The addition and revision read as follows:


Sec.  482.22  Condition of participation: Medical staff.

* * * * *
    (a) * * *
    (3) When telemedicine services are furnished to the hospital's 
patients through an agreement with a distant-site (as defined at 
section 1834(m)(4)(A) of the Act) hospital, the governing body of the 
hospital whose patients are receiving the telemedicine services may 
choose, in lieu of the requirements in paragraphs (a)(1) and (a)(2) of 
this section, to have its medical staff rely upon information furnished 
by the distant-site hospital when making recommendations on privileges 
for the individual distant-site physicians and practitioners providing 
such services, if the hospital's governing body ensures that all of the 
following provisions are met:
    (i) The distant-site hospital providing the telemedicine services 
is a Medicare-participating hospital.
    (ii) The individual distant-site physician or practitioner is 
privileged at the distant-site hospital providing the telemedicine 
services, which provides a current list of the distant-site physician's 
or practitioner's privileges.
    (iii) The individual distant-site physician or practitioner holds a 
license issued or recognized by the State in which the hospital, whose 
patients are receiving the telemedicine services, is located.
    (iv) With respect to a distant-site physician or practitioner 
granted privileges, the hospital, whose patients are receiving the 
telemedicine services, has evidence of an internal review of the 
distant-site physician's or practitioner's performance of these 
privileges and sends the distant-site hospital such performance 
information for use in the periodic appraisal of the distant-site 
physician or practitioner. At a minimum, this information must include 
all adverse events that result from the telemedicine services provided 
by the distant-site physician or practitioner to the hospital's 
patients and all complaints the hospital has received about the 
distant-site physician or practitioner.
* * * * *
    (c) * * *
    (6) Include criteria for determining the privileges to be granted 
to individual practitioners and a procedure for applying the criteria 
to individuals requesting privileges. For distant-site physicians and 
practitioners requesting

[[Page 29487]]

privileges to furnish telemedicine services under an agreement with the 
hospital, the criteria for determining privileges and the procedure for 
applying the criteria are also subject to the requirements in Sec.  
482.12(a)(8) and Sec.  482.22(a)(3).
* * * * *

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

    4. The authority citation for part 485 continues to read as 
follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395(hh)).

Subpart F--Conditions of Participation: Critical Access Hospitals 
(CAHs)

    5. Section 485.616 is amended by adding a new paragraph (c) to read 
as follows:


Sec.  485.616  Condition of participation: Agreements.

* * * * *
    (c) Standard: Agreements for credentialing and privileging of 
telemedicine physicians and practitioners. (1) The governing body of 
the CAH must ensure that, when telemedicine services are furnished to 
the CAH's patients through an agreement with a distant-site (as defined 
at section 1834(m)(4)(A) of the Act) hospital, the agreement specifies 
that it is the responsibility of the governing body of the distant-site 
hospital to meet the following requirements with regard to its 
physicians or practitioners providing telemedicine services:
    (i) Determine, in accordance with State law, which categories of 
practitioners are eligible candidates for appointment to the medical 
staff.
    (ii) Appoint members of the medical staff after considering the 
recommendations of the existing members of the medical staff.
    (iii) Assure that the medical staff has bylaws.
    (iv) Approve medical staff bylaws and other medical staff rules and 
regulations.
    (v) Ensure that the medical staff is accountable to the governing 
body for the quality of care provided to patients.
    (vi) Ensure the criteria for selection are individual character, 
competence, training, experience, and judgment.
    (vii) Ensure that under no circumstances is the accordance of staff 
membership or professional privileges in the hospital dependent solely 
upon certification, fellowship or membership in a specialty body or 
society.
    (2) When telemedicine services are furnished to the CAH's patients 
through an agreement with a distant-site (as defined at section 
1834(m)(4)(A) of the Act) hospital, the CAH's governing body or 
responsible individual may choose to rely upon the credentialing and 
privileging decisions made by the governing body of the distant-site 
hospital regarding individual distant-site physicians or practitioners. 
The CAH's governing body or responsible individual must ensure that the 
following provisions are met:
    (i) The distant-site hospital providing telemedicine services is a 
Medicare-participating hospital.
    (ii) The individual distant-site physician or practitioner is 
privileged at the distant-site hospital providing the telemedicine 
services, which provides a current list of the distant-site physician's 
or practitioner's privileges;
    (iii) The individual distant-site physician or practitioner holds a 
license issued or recognized by the State in which the CAH is located; 
and
    (iv) With respect to a distant-site physician or practitioner 
granted privileges by the CAH, the CAH has evidence of an internal 
review of the distant-site physician's or practitioner's performance of 
these privileges and sends the distant-site hospital such information 
for use in the periodic appraisal of the individual distant-site 
physician or practitioner. At a minimum, this information must include 
all adverse events that result from the telemedicine services provided 
by the distant-site physician or practitioner to the CAH's patients and 
all complaints the CAH has received about the distant-site physician or 
practitioner.
    6. Section 485.641 is amended by--
    A. Republishing paragraph (b)(4)(i).
    B. Revising paragraphs (b)(4)(ii) and (iii).
    C. Adding a new paragraph (b)(4)(iv).
    The additions and revisions read as follows:


Sec.  485.641  Condition of participation: Periodic evaluation and 
quality assurance review

* * * * *
    (b) * * *
    (4) The quality and appropriateness of the diagnosis and treatment 
furnished by doctors of medicine or osteopathy at the CAH are evaluated 
by--
    (i) One hospital that is a member of the network, when applicable;
    (ii) One QIO or equivalent entity;
    (iii) One other appropriate and qualified entity identified in the 
State rural health care plan; or
    (iv) In the case of distant-site physicians and practitioners 
providing telemedicine services to the CAH's patients under an 
agreement between the CAH and a distant-site (as defined at section 
1834(m)(4)(A) of the Act) hospital, the distant-site hospital.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program). (Catalog of Federal 
Domestic Assistance Program No. 93.778, Medical Assistance Program)

    Dated: May 20, 2010.
Marilyn Tavenner,
Acting Administrator and Chief Operating Officer, Centers for Medicare 
& Medicaid Services.
    Approved: May 21, 2010.
Kathleen Sebelius,
Secretary.
[FR Doc. 2010-12647 Filed 5-21-10; 4:15 pm]
BILLING CODE 4120-01-P