99-3083. Medicare Program; Expanded Coverage for Outpatient Diabetes Self- Management Training Services

[Federal Register Volume 64, Number 28 (Thursday, February 11, 1999)]
[Proposed Rules]
[Pages 6827-6852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3083]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 410, 414, 424, 476, and 498

[HCFA-3002-P]
RIN 0938-AI96


Medicare Program; Expanded Coverage for Outpatient Diabetes Self-
Management Training Services

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would provide for uniform coverage of 
outpatient diabetes self-management training services. These services 
include educational and training services furnished to a beneficiary 
with diabetes by an entity deemed to meet certain quality standards 
proposed in this rule. The physician or qualified nonphysician 
practitioner treating the beneficiary's diabetes would certify that 
these services are needed as part of a comprehensive plan of care. It 
sets forth proposed payment amounts that have been established in 
consultation with appropriate diabetes organizations. It would 
implement section 4105 of the Balanced Budget Act of 1997.

COMMENT DATE: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on April 
12, 1999.

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: HCFA-3002-P, PO Box 31850, 
Baltimore, MD 21207-8850.
    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code HCFA-3002-P. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue,

[[Page 6828]]

SW., Washington, DC, on Monday through Friday of each week from 8:30 
a.m. to 5 p.m. (phone: [phone]).

FOR FURTHER INFORMATION CONTACT: Claude Mone, [phone], 
(Conditions for Coverage and Quality Standards); Angela Mason, (410) 
786-7452, (Physician Fee Schedule Payments); Joan Brooks, (410) 786-
5526 (Accreditation and Deeming).

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I. Background

A. Diabetes--Background

1. Prevalence and Costs of Diabetes
    In 1997, as reported by the Department of Health and Human 
Services' Centers for Disease Control and Prevention, (CDC), 15.7 
million people in the United States had diabetes, nearly six percent of 
the United States population (Morbidity and Mortality Weekly Report 
4643, 1014-1018, 1997 Center for Disease Control and Prevention). 
Diabetes is the seventh leading cause of death in the United States, 
and more than 187,000 persons died from the disease and its related 
complications in 1995. The American Diabetes Association estimates that 
$98.2 billion was spent in 1997 on diabetes care ($44.1 billion in 
costs directly attributable to diabetes and $54.1 billion for indirect 
medical costs, such as work loss, disability, and premature death.)
    Among Americans aged 65 and older, 4 million persons (9.3 percent 
of this group) are estimated to have diabetes. According to the 
National Health and Nutrition Examination Survey (NHANES), as many as 
18.7 percent of Americans over age 65 are at risk for developing 
diabetes. The goals in the management of diabetes are to achieve normal 
metabolic control and reduce the risk of micro and macro-vascular 
complications. Numerous epidemiologic and interventional studies point 
to the necessity of maintaining good glycemic control to reduce the 
risk of the complications of diabetes. Despite this knowledge, diabetes 
remains the leading cause of blindness, lower extremity amputations, 
and kidney disease requiring dialysis. Diabetes and its complications 
are primary or secondary factors in an estimated 9 percent of 
hospitalizations (Aubert, RE, et al., Diabetes-related hospitalizations 
and hospital utilization. In: Diabetes in America. 2nd ed. National 
Institutes of Health, National Institute of Diabetes and Digestive and 
Kidney Disease, NIH, Pub. No. 95-1468-1995: 553-570). Overall, 
beneficiaries with diabetes are hospitalized 1.5 times more often than 
beneficiaries without diabetes. Ten percent of these hospitalizations 
are a direct result of uncontrolled diabetes, and more than half of 
these admissions occur in beneficiaries 65 and older (National Hospital 
Discharge Survey, U.S. National Center for Health Statistics, U.S. 
Department of Health and Human Services, 1990). In expanding the 
Medicare program to include outpatient diabetes self-management 
training services, the Congress intended to empower Medicare 
beneficiaries with diabetes to better manage and control their 
conditions. The Conference Report indicates that the conferees believed 
that ``this provision will provide significant Medicare savings over 
time due to reduced hospitalizations and complications arising from 
diabetes.'' (H.R. Conf. Rep. No. 105-217, at 701 (1997)).
2. Classification of Diabetes
    Diabetes mellitus is a disease of metabolism presenting as a 
complex group of syndromes that have in common elevated blood glucose 
levels. It occurs because the insulin produced by the beta cells of the 
pancreas is either absent, insufficient, or not used properly by target 
tissues. As a result, the body is unable to metabolize macronutrients 
in food in the normal way. Since the body cannot convert glucose into 
energy, high levels of glucose remain in the blood and spill into the 
urine, eventually resulting in micro-vascular complications (for 
example, kidney disease and eye disease) and macro-vascular 
complications (for example, stroke and ischemic heart disease).
    There are two major types of diabetes that affect the Medicare 
population, Type 1 diabetes, previously called insulin dependent 
diabetes mellitus, and Type 2 diabetes, previously called non-insulin 
dependent diabetes mellitus.

B. Medicare Coverage and Payment Before July 1, 1998

1. Medicare Coverage
    Before July 1, 1998, Medicare covered diabetes self-management 
training furnished through outpatient hospital-based programs (Coverage 
Issues Manual (CIM), HCFA Pub. 6, Section 80-2). Specifically, the CIM 
provided coverage of diabetes education if the services were furnished 
under a physician's order by the provider's personnel; and under 
medical staff supervision to beneficiaries who are registered patients 
of that provider. We required that the services be closely linked to 
the care and treatment of the individual beneficiary and provided the 
beneficiary with essential knowledge that aided in the beneficiary's 
active participation in his or her own treatment and the skills that 
enabled self-management.
    Finally, all services covered by Medicare had to be reasonable and 
necessary to treat the beneficiary's diabetes and the referring 
physician was responsible for maintaining documentation of the 
necessity of the training program. Section 1862(a)(1)(A) of the Act 
provides, in pertinent part, that Medicare may pay only for services 
that are reasonable and necessary for the diagnosis or treatment of 
illness or injury. In developing the Medicare policy on diabetes self-
management, we determined that certain educational services are 
consistent with the provisions of section 1862(a)(1)(A) of the Act.
2. Medicare Payment
    Since 1994, Medicare payment for diabetes education as a separate 
service has been limited to services furnished in

[[Page 6829]]

the hospital outpatient department to the hospital's registered 
outpatients. These services have been paid under Medicare Part B on a 
reasonable cost basis. In all other Medicare settings, beneficiary 
education related to diabetes is treated as an integral part of a 
direct service if furnished by a physician or nonphysician practitioner 
or furnished as incident to their services and no separate charge was 
allowed.
    Payment has been made for hospital outpatient diabetes education 
programs that, at a minimum, teach the beneficiary diet and exercise 
and blood glucose self-monitoring; establish treatment plans for 
insulin-dependent beneficiaries; and motivate the beneficiaries to use 
skills learned to enable them to manage their diabetes. Payment has 
been made for facility costs associated with the provision of both 
individual and group education sessions.

C. Recent Legislation

    Section 4105(a) of the Balanced Budget Act of 1997 (BBA '97) (Pub. 
L. 105-33, enacted on August 5, 1997), provides coverage for outpatient 
diabetes self-management training. Under this coverage, training would 
include educational and training services furnished in an outpatient 
setting (according to frequency standards established by the Secretary) 
to a beneficiary with diabetes by a ``certified provider'' that meets 
certain quality standards. These services would be covered only if the 
physician managing the beneficiary's diabetic condition certifies that 
the services are needed under a comprehensive plan of care in order to 
provide the beneficiary with the skills and knowledge necessary to help 
manage his or her diabetes (including skills related to the self-
administration of injectable drugs). Services would be paid under the 
physician fee schedule in amounts established by the Secretary after 
consultation with appropriate organizations.
    The statute states that a ``certified provider'' is a physician, or 
other individual or entity designated by the Secretary, that, in 
addition to providing outpatient diabetes self-management training 
services, provides other items or services for which payment may be 
made under Medicare. Moreover, the statute requires that a physician or 
other individual or entity, must meet the quality standards that are 
established by the Secretary or meet alternative quality standards 
under the statute. A physician or other individual or entity may be 
deemed to have met those quality standards by meeting the applicable 
standards originally established by the National Diabetes Advisory 
Board and subsequently revised by organizations who participated in the 
establishment of standards by the Board. Finally, the Secretary may 
recognize as a certified provider a physician, individual, or entity 
that is recognized by an organization that represents individuals with 
diabetes (including Medicare beneficiaries) as meeting standards for 
furnishing these services.
    The legislation also requires that Medicare payment for outpatient 
diabetes self-management training be made to a certified provider under 
the physician fee schedule effective July 1, 1998. In addition, it 
requires the Secretary to consult with appropriate organizations, 
including organizations representing individuals or Medicare 
beneficiaries with diabetes in determining a payment amount for 
diabetes education and training services under the fee schedule. 
Section 1848 of the Act requires that payments under the physician fee 
schedule be based on national uniform relative value units (RVUs) based 
on the resources used in furnishing a service. Section 1848(c) of the 
Act requires that national RVUs be established for physician work, 
practice expense, and malpractice expense.
    In addition, the law provides expanded coverage for blood glucose 
monitors and testing strips for all beneficiaries with diabetes. 
(Medicare previously covered these devices and supplies for only 
insulin-treated diabetics.) In June of 1998, we announced a national 
coverage decision concerning blood glucose monitors and testing strips 
in Program Memorandum B98-26-60. This proposed rule addresses only the 
coverage of, and payment for, outpatient diabetes self-management 
training services, and the quality standards that we would require an 
entity approved to furnish training services to meet.

D. Program Instructions

    In June of 1998, we issued a program instruction that partially 
implemented the outpatient diabetes self-management training benefit 
beginning July 1, 1998 (PM AB-98-36). In this program memorandum, we 
indicated that outpatient diabetes self-management training services 
may be covered under Medicare only if the physician who is managing the 
beneficiary's diabetic condition certifies that the services are needed 
under a comprehensive plan of care related to the beneficiary's 
diabetic condition to ensure therapy compliance or to provide the 
beneficiary with necessary skills and knowledge in the management of 
his or her disease.
    We stated that for initial implementation of this benefit that we 
were designating physicians, individuals, or entities that are paid 
under the physician fee schedule and meet the National Diabetes 
Advisory Board Standards, now called the National Standards for 
Diabetes Self-Management Education Programs, recognized by the American 
Diabetes Association (ADA) as approved entities. In addition, under our 
existing authority, we would continue to pay hospitals that were paid 
for diabetes self-management training services before July 1, 1998 
under CIM 80-2 until we publish a final rule. Once the final rule is 
published, we will cover only outpatient diabetes self-management 
training services to those entities that meet the requirements for 
coverage as explained in the final rule.
    In September of 1998, we issued a program memorandum (PM AB-98-51) 
that clarified a number of issues that occurred as a result of our 
June, 1998 memorandum. In this program memorandum, we provided 
additional information for contractors to facilitate implementation of 
this provision. We explained that the two new Physician's Current 
Procedural Terminology codes that must be used for billing outpatient 
diabetes self-management training.
    We also amended the contractor instructions concerning the 
Education Recognition Program Certificate necessary in order to pay 
claims. This September 1998 memorandum also advised the contractors to 
publish a notice to the provider community that these certificates must 
be sent in before the approved entity submits the first claim rather 
than with the first claim.
    We advised that individual training sessions can be provided for a 
beneficiary if the beneficiary's physician decides that it is medically 
necessary (for example, as indicated by language or physical 
challenges, such as severely impaired hearing or sight). Diabetes 
training sessions should be billed in 1 hour increments only (that is, 
1 hour, 2 hours etc.).
    In addition, we restated that a hospital outpatient diabetes self-
management training program that does not have an Education Recognition 
Program Certificate that had been paid by Medicare for these services 
before July 1, 1998, may continue to be paid on a reasonable cost 
basis, without obtaining recognition until the final rule is published. 
An approved entity must forward information to its contractor that it 
has been paid by the Medicare program for outpatient diabetes self-
management training before July 1, 1998. Upon receipt of this 
information,

[[Page 6830]]

the contractor would continue to pay claims for these services. Any new 
hospital outpatient diabetes self-management training program must have 
an Education Recognition Certificate showing that it meets the required 
educational standards.

II. Industry Consultations and Rationale for Policy Changes

    As required by statute, we have met individually with 
representatives of various groups or organizations active in the field 
of diabetes education and training. These organizations or groups 
include the ADA, the American Medical Association (AMA), the American 
Academy of Family Physicians, the Endocrine Society, the American 
Association of Clinical Endocrinologists, the American Association of 
Diabetes Educators, the American Dietetic Association, the Health 
Industry Manufacturers Association, Merck-Medco, the Diabetes Treatment 
Centers of America, American Pharmaceutical Association, the National 
Association of Chain Drug Stores, and the National Community Pharmacy 
Associations. We have also worked extensively with diabetes experts 
from the CDC and the Department of Veterans Affairs. In addition, we 
visited a number of diverse hospital-based training programs to obtain 
an understanding of the current training programs that are available to 
Medicare beneficiaries. In some cases, multiple meetings were held. 
Each group was asked to address specific questions that covered all 
aspects of this regulation and to provide scientific evidence to 
support each of their responses to these questions. These meetings and 
the information obtained from them were extremely useful to us. There 
was a general sense among the industry that there was not conclusive 
evidence and data on several issues involved in this proposed rule. As 
a result, the responses of these groups were very diverse and often 
conflicting. Thus, writing this proposed rule required sifting through 
available evidence and balancing diverse interests and opinions, with 
the benefit to the beneficiary, on both an individual and population 
level, being the major concern.
    Despite the importance of the need for diabetes self-management 
education and abundant scientific literature on how to provide diabetes 
self-management training, there is no clear consensus on several 
issues. These issues include critical questions concerning who should 
provide the training (and the specific qualifications necessary, that 
is, the proposed requirements for Certified Diabetic Educators), who 
should receive this training, and how, when, and where this training 
should be provided. We solicit comments on all these issues and 
explicitly request any available empirical data describing the impacts 
of these or alternative requirements on beneficiary health outcomes.
    We believe that all of the consulted parties agree that diabetes 
self-management training is an interactive, collaborative process 
involving beneficiaries with diabetes, their physician, and their 
educators. The educational process should provide the beneficiary with 
the knowledge and skills needed to perform self-care, manage crisis, 
and make lifestyle changes required to successfully manage the disease. 
The goal is to enable the beneficiary to become an active participant 
in his or her diabetes care. It involves a four-step process that 
includes the following:
    (1) Assessment of the beneficiary's educational needs;
    (2) Development of an educational plan, based on the individual 
goals and needs of the beneficiary;
    (3) Educational interventions; and
    (4) Evaluation of the beneficiary's success in achieving the 
beneficiary's self-management goals.
    Effective diabetes self-management training recognizes that the 
person with diabetes must be responsible for self-management of his or 
her disease, and is based on established principles of learning, 
especially the need for interactive skill-based learning as opposed to 
only didactic education.
    A 1997 GAO report concluded that Medicare beneficiaries with 
diabetes are not receiving the quality of care needed to manage their 
diabetes (Most Beneficiaries with Diabetes Do Not Receive Recommended 
Monitoring Services, GAO/HHS07-48). Following the issuance of the GAO 
report, and receiving testimony from clinicians, diabetes experts, and 
other studies, the Congress expanded Medicare coverage to include 
coverage of monitors and blood glucose test strips, as well as 
outpatient self-management education and training for beneficiaries 
with diabetes.
    While it is important to increase access to diabetes training for 
Medicare beneficiaries with diabetes, it is equally important to 
maintain a level of quality that is at least equal to the programs 
currently reimbursed by Medicare and to be able to evaluate the effect 
of these programs. It is through the establishment and maintenance of 
quality standards for diabetes training that we would promote desired 
outcomes that result in improved health status for beneficiaries with 
diabetes.

III. Provisions of the Proposed Rule

A. Diabetes Self-Management Training Services

    We are proposing to add a new statutory authority, section 1865(b) 
of the Act, to paragraph (a) of Sec. 410.1, ``Basis and scope.'' 
Section 1865(b) permits us to approve and recognize a national 
accreditation organization and its accreditation program for 
accrediting an entity to furnish outpatient diabetes self-management 
training services.
    We are proposing a new subpart H in part 410, ``Outpatient Diabetes 
Self-Management Training Services.'' In Sec. 410.140, we are proposing 
the following definitions for purposes of this new subpart:
    Approved entity means an individual physician or entity accredited 
by an approved organization to furnish training services and approved 
by HCFA to furnish and receive Medicare payment for the training 
services.
    Deemed entity means an individual, physician, or entity accredited 
by an approved organization, but that has not yet been approved by HCFA 
to furnish and receive Medicare payment for the training. Upon being 
approved by HCFA to receive Medicare payment for training, HCFA refers 
to this entity as an ``approved entity.''
    Organization means a national accreditation organization.
    Training means outpatient diabetes self-management training.
    We are proposing in Sec. 410.141(a) that admission into an 
outpatient diabetes self-management training program would be on the 
order of the physician (or qualified nonphysician practitioner) 
treating the beneficiary's diabetes. To ensure access to these services 
in rural areas we would recognize training services ordered by certain 
nonphysician practitioners who treat a beneficiary's diabetes and whose 
services would be covered under Medicare as physician services if 
furnished by a physician. We would require these nonphysician 
practitioners to be operating within the scope of the statutory benefit 
and their authority under State law, or regulations. Nonphysician 
practitioners who generally meet this definition are physician 
assistants (section 1861(s)(2)(K)(i) of the Act), nurse practitioners 
(section 1861(s)(2)(K)(ii) of the Act), clinical nurse specialists 
(section 1861(s)(2)(K)(iii) of the Act), nurse-midwives (section 
1861(s)(2)(L) and 1861(gg) of the Act), qualified psychologists 
(section 1861(s)(2)(M) of

[[Page 6831]]

the Act), and clinical social workers (section 1861(s)(2)(N) of the 
Act). Patient self-referral would not be covered.

B. Conditions for Coverage

    We are proposing that outpatient diabetes self-management training 
must meet the following conditions (Sec. 410.141(b)).
1. Physician's Order
    Following an evaluation of the beneficiary's need for the training, 
we would require the physician or qualified nonphysician practitioner 
who is treating the beneficiary's diabetes to order the training.
2. Plan of Care
    We would require the physician or qualified nonphysician 
practitioner to prepare a comprehensive plan of care that describes the 
content, number, frequency, and duration of the diabetes self-
management training services. The plan would contain a statement, as 
specified by us, and signed by the physician or qualified nonphysician 
practitioner who is managing the beneficiary's diabetic condition, that 
the services described in the plan of care are needed to ensure therapy 
compliance or to provide the beneficiary with the skills and knowledge 
to help manage the beneficiary's diabetes. This statement would 
identify the beneficiary's specific medical conditions (described in 
Sec. 410.141(d)(1)) that the training program should address. We are 
proposing that any changes to the plan of care be signed by the 
physician or nonphysician practitioner treating the beneficiary. In 
addition, the plan of care would be incorporated into the approved 
entity's permanent medical record for the beneficiary and be available 
to us upon request.
3. Reasonable and Necessary Services
    We propose that the outpatient diabetes self-management training 
services be reasonable and necessary for the treatment of the 
beneficiary's diabetes. Section 1862(a)(1)(A) of the Social Security 
Act (the Act) provides that Medicare cover only services that are 
reasonable and necessary for the diagnosis or treatment of a 
beneficiary's illness or injury. Based on consultation with the 
industry, we believe that certain outpatient diabetes self-management 
and training programs are consistent with the reasonable and necessary 
provisions of section 1862(a)(1)(A) of the Act.
4. Group vs Individual Training Sessions
    Except under certain circumstances, we are proposing group training 
sessions for all beneficiaries consisting of 2 to 20 individuals (all 
of whom need not be Medicare beneficiaries (Sec. 410.141(b)(4)). We 
would cover individual training sessions if no group session is 
available within 2 months of the physician's order, or if the 
beneficiary's physician or qualified nonphysician practitioner 
certifies that he or she has special needs resulting from conditions 
that would hinder effective participation in a group training session 
(for example, severe language or physical challenges, such as impaired 
hearing or sight) (Sec. 410.70(c)(3)). Within 2 months of a physician's 
order for outpatient diabetes self-management training services, we 
would expect that most patients, including those in rural areas, would 
be able to attend a group session. However, in situations, for example, 
when there is a geographic barrier that hinders a patient from 
attending a group session, the regulation would allow for an individual 
to have an individual training session.

C. Types and Frequency of Training

1. Initial Training
    In Sec. 410.141(c)(1), we propose that Medicare cover up to 10 
hours of initial outpatient diabetes self-management training within a 
continuous 12-month period for each beneficiary that meets the 
conditions described below. In addition, we are proposing that payment 
would be only for those sessions attended (not for packages of sessions 
unless there is documentation that the beneficiary attended all 
sessions (Sec. 414.62(c)).
2. Additional Training
    We propose that a beneficiary who receives the initial training 
program be eligible for a single follow-up training session of up to 
one hour each year. (A group session, unless an individual session is 
needed, is based on the same criteria listed above.) The need for the 
annual session would be documented by the physician or qualified 
nonphysician practitioner ordering the services and identify the 
specific medical conditions (described in Sec. 410.141(d)(1)) that the 
program must address. The services must be reasonable and necessary. 
Documentation of any of the criteria that resulted in the initial 
eligibility would make a beneficiary eligible for the follow-up 
session. There may be other situations that would qualify a beneficiary 
for an annual session, for example, a change in physical functional 
status. We would require that these situations also be documented by 
the physician or qualified nonphysician practitioner and identified as 
the situations that make the session reasonable and necessary.
    A physician or qualified nonphysician practitioner certifying and 
monitoring the need for diabetes self-management training would bill 
for a single evaluation and management code, such as CPT code 99201 
(for a new beneficiary when that beneficiary requires a problem focused 
history, focused examination, and medical decision making) or CPT code 
99212 (for an established beneficiary, due to the complexity of 
monitoring and oversight of care furnished by another provider/site in 
an offsite setting).

D. Beneficiaries Who May be Covered

1. Medical Conditions
    As previously mentioned, the Congress has specifically delegated 
authority to the Secretary to determine the times and frequency when 
outpatient diabetes self-management training is appropriate. Since many 
beneficiaries have longstanding stable diabetes and some beneficiaries 
have already attended hospital-based outpatient diabetes self-
management training, we do not believe that it would be medically 
reasonable and necessary for all beneficiaries with diabetes to 
automatically attend self-management training. Therefore, we are 
proposing in Sec. 410.141(d)(1) that any beneficiary who has any one of 
the following medical conditions occurring within the 12-month period 
before the physician's order for the training would be eligible for 
Medicare coverage for training services from an approved entity:
     New onset diabetes.
     Poor glycemic control as evidenced by a glycosylated 
hemoglobin (HbA1C) of 9.5 or more in the 90 days before attending the 
training.
     A change in treatment regimen from no diabetes medications 
to any diabetes medication, or from oral diabetes medication to 
insulin.
     High risk for complications based on poor glycemic 
control; documented acute episodes of severe hypoglycemia or acute 
severe hyperglycemia occurring in the past year during which the 
beneficiary needed third party assistance for either emergency room 
visits or hospitalization.
     High risk based on at least one of the following 
documented complications:

[[Page 6832]]

    + Lack of feeling in the foot or other foot complications such as 
foot ulcer or amputation.
    + Pre-proliferative or proliferative retinopathy or prior laser 
treatment of the eye.
    + Kidney complications related to diabetes, such as 
macroalbuminuria or elevated creatinine.
    We are concerned that all beneficiaries with diabetes have access 
to outpatient diabetes self-management training services while 
recognizing that certain beneficiaries because of their medical 
conditions have caregivers. The Medicare statute, however, provides 
benefits only for services related to the beneficiary. Therefore, we 
would encourage caregivers to attend the training with the beneficiary 
or attend separate training, but Medicare payment would be limited to 
the diabetes self-management training for the beneficiary.
2. Other Conditions
    Beneficiaries who are inpatients in a hospital, skilled nursing 
facility, hospice, or nursing home would not simultaneously be eligible 
for services under this benefit. It is the responsibility of the 
facility staff at these facilities to provide effective disease 
management instruction as part of the basic care and treatment 
furnished to the beneficiary while the beneficiary is an inpatient of 
that facility.
    If outpatient diabetes self-management training services are 
furnished in a Federally qualified health center (FQHC) or a rural 
health center (RHC) setting by a nonphysician practitioner, the 
services would be bundled into the facility rate. Separate payment for 
the professional services of nurse practitioners, physician assistants, 
and clinical nurse specialists furnished in an RHC or FQHC setting is 
not permitted. The professional services of these nonphysician 
practitioners are bundled with other facility services when furnished 
to patients under the RHC and FQHC benefits. The payment made to the 
RHC or the FQHC under the all-inclusive rate specifically accounts for 
the services of these nonphysician practitioners furnished in the RHC 
or FQHC setting because the facility payment rate reflects the costs of 
these services.

E. Approved Entities

    The statute requires that physicians, individuals, or entities who 
meet certain quality standards may provide outpatient diabetes self-
management services and may be designated by the Secretary as 
``certified providers.'' Section 400.202 defines a Medicare 
``provider'' as including ``a hospital, a (critical access hospital) 
CAH, a skilled nursing facility, a comprehensive outpatient 
rehabilitation facility, a home health agency, or a hospice that has in 
effect an agreement to participate in Medicare, or a clinic, a 
rehabilitation agency or a public health agency * * * '' Medicare also 
covers services by suppliers. Suppliers are defined in Sec. 400.202 and 
include a physician, or other practitioner, or an entity other than a 
provider, that furnishes health care services under Medicare. The new 
outpatient diabetes self-management training benefit could be furnished 
by a provider or supplier that meets certain quality standards. For 
consistency throughout this proposed rule, we use the term ``approved 
entity'' to mean those entities that we may approve to furnish 
outpatient diabetes self-management training services.
    In Sec. 410.141(e), we identify the conditions we would require an 
approved entity to meet. In order to be an ``approved entity,'' we 
would require the physician, individual, or entity to furnish other 
services for which direct Medicare payment may be made. In addition, 
the approved entity must comply with the Medicare regulations on the 
prohibition on reassignment of Medicare benefits in Secs. 424.73 and 
424.80. In summary, these regulations prohibit payment for services to 
entities other than the physician, provider, or supplier who furnished 
the services unless there is a specific exception that authorizes 
reassignment. In some cases, in order for Medicare payment to be 
appropriate, there must be specific contractual language. We propose 
that in order to be an ``approved entity'' an individual, physician, or 
entity must be able to be paid properly under these regulations so that 
payment would be consistent with the statutory prohibitions on 
reassignment of benefits.
    Also, we would require an approved entity to provide us with any 
documentation that we may request, including information that is 
necessary to pay a claim or to perform a focused post-payment medical 
review study. Finally, we would approve an entity to furnish outpatient 
diabetes training services if it meets the quality standards prescribed 
by us; the National Standards for Diabetes Self-Management Education 
Program, previously the NDAB standard; or standards developed by a 
national organization that we have approved. In order to show that 
these quality standards are met, an approved entity must show proof 
that it has been accredited by an approved accreditation organization.
    Entities that may meet the quality standards for furnishing 
outpatient diabetes training services are hospitals, critical access 
hospitals, End Stage Renal Disease facilities, and clinics. Individuals 
that may be properly paid for outpatient diabetes education training 
services are physicians, clinical nurse specialists, nurse 
practitioners, clinical social workers, psychologists, and nurse 
midwives. Moreover, a licensed pharmacist that is a Medicare supplier 
of durable medical equipment under Sec. 424.57 could qualify as an 
``approved entity'' if the individual or entity meets the payment and 
quality standards.
    Currently, physician assistants (PAs) cannot bill Part B of the 
Medicare program directly for their professional services. The PA's 
physician supervisor (or a physician designated by the supervising 
physician or employer as provided under State law or regulation) is 
primarily responsible for the overall direction and management of the 
PA's professional activities and for assuring that the services 
furnished are medically appropriate for the beneficiary. Medicare 
payment for PA services is made only to the PA's employer regardless of 
whether the PA is employed as a W-2 employee or whether the PA is an 
independent contractor (section 4512 of the BBA '97). We would apply 
these same payment rules to outpatient diabetes training services 
furnished by PAS.
    Dietitians and certified diabetic educators who are in independent 
practice would not qualify as an approved entity for the purpose of 
receiving payment for outpatient diabetes training services. We 
believe, however, that the law and the Conference Report are clear that 
only those physicians, individuals, and entities that furnish other 
services for which Medicare payment may be made can be an approved 
entity. The Conference Agreement specifically states that the Secretary 
may designate entities ``who currently are reimbursed by Medicare.'' 
(H.R. Conf. 105-217, at 701.)

F. HCFA's Process for Approving National Accreditation Organizations

    In the past, under section 1865 of the Act, HCFA approved national 
accreditation organizations if HCFA found, taken as a whole, the 
accreditation of a provider or supplier entity by the national 
accreditation organization provided reasonable assurance that the 
Medicare health and safety conditions or requirements for that Medicare 
provider or supplier type were met. Therefore, in reviewing a

[[Page 6833]]

national accreditation organization's request for approval and 
recognition, HCFA looked at the accreditation organization's program as 
a whole and determined whether to approve the organization and deem the 
provider or supplier entities it accredited to meet the applicable HCFA 
conditions or requirements. In 1996, section 1865 of the Act was 
amended. HCFA must now determine whether the accreditation of a 
provider or supplier entity by the national accreditation organization 
provides assurances that the applicable Medicare health and safety 
conditions or requirements are met or exceeded. In 1997, Congress 
passed deeming requirements for Medicare + Choice organizations that 
require the accreditation organization to apply and enforce standards 
that are at least as stringent as the HCFA requirements. We believe 
that the deeming requirements for Medicare + Choice are a reflection of 
Congress' current thinking about the degree to which HCFA holds 
accreditation organizations accountable. In reviewing a national 
accreditation organization's request for approval and recognition, HCFA 
now looks standard-by-standard at the crosswalk between the 
accreditation organization's standards and the applicable HCFA 
conditions or requirements. HCFA expects to see that each Medicare 
condition or requirement, for the provider or supplier that the 
accreditation organization accredits, is covered by the accreditation 
organization's standards. The accreditation organization's standards do 
not have to adopt the exact language of the HCFA requirements. In fact, 
the accreditation organization may have requirements that are more 
stringent than HCFA's conditions or requirements. After evaluating the 
accreditation organization's standards, HCFA looks at the accreditation 
organization's processes for assuring that entities meet the 
accreditation standards.
    The process that we would use to deem compliance for outpatient 
diabetes self-management training programs accredited by national 
accreditation organizations would be similar to the process used for 
deeming compliance with individual provider or supplier requirements 
under Part 488, as well as the process for deeming compliance with the 
Medicare + Choice quality requirements in part 422, subpart D. The 
accreditation organization would apply and enforce either HCFA's 
standards, the standards of the NDAB, or a set of standards established 
by an organization representing individuals with diabetes and approved 
by HCFA as standards that are substantially equivalent to the HCFA 
standards.
    In determining whether to approve and recognize a national 
accreditation organization, we would determine whether the 
accreditation organization applies and enforces quality standards that 
have been determined by HCFA to be substantially equivalent to the 
quality standards in Sec. 410.144 based on a comparison of the 
accreditation organization's standards and its crosswalk. We would also 
consider whether the accreditation organization meets the requirements 
for approved accreditation organizations in Sec. 410.143. We would make 
these determinations on the basis of the materials submitted by an 
accreditation organization seeking our approval in accordance with 
Sec. 410.142. We would, through submittal of appropriate documentation 
by the national organization requesting accreditation approval from us, 
determine whether the accreditation organization's requirements 
concerning the frequency of accreditation, accreditation forms, 
guidelines and instructions to evaluators are as rigorous as our 
requirements with a similar emphasis on outcomes.
    In Sec. 410.142, we propose the conditions a national accreditation 
organization would have to meet to be an approved accreditation 
organization. We may approve an accreditation organization if the 
organization applies and enforces quality standards that have been 
determined by HCFA to be substantially equivalent to the quality 
standards in Sec. 410.144; is either a nonprofit or not-for-profit 
organization with demonstrated experience in representing the interest 
of individuals with diabetes; and is neither owned or controlled by any 
entity it accredits, nor owns or controls an entity that could be 
accredited, as defined at 42 CFR 413.17. Control exists if the 
accredited entities have power, directly or indirectly, to 
significantly influence or direct the activities or policies of the 
accreditation organization. We have included this requirement to 
preclude any conflict of interest that could compromise the integrity 
of the accreditation process. In addition, we would require the 
organization to comply with the application and reapplication 
procedures set forth in Sec. 410.142(h)(1), ``Procedures for approval 
of accreditation as a basis for deeming compliance.''
1. Required Information and Materials
    We are proposing that a national accreditation organization 
requesting our approval and recognition of its accreditation program 
must furnish to us the information and materials discussed below.
    We are proposing the organization may not use more than one set of 
quality standards for its outpatient diabetes self-management training 
program. In addition, the accreditation organization must inform us of 
the quality standards it would use. These standards must include a 
detailed comparison (including a crosswalk if the accreditation 
organization does not use standards described in Sec. 410.144(a) in 
their entirety) between the organization's accreditation requirements 
and quality standards and our quality standards.
    We are proposing that the organization provide us with detailed 
information about its accreditation process, including the frequency of 
accreditation, and copies of its accreditation forms, guidelines, and 
instructions to evaluators.
    We are proposing that the organization also provide: descriptions 
of the accreditation review process, the accreditation status decision 
making process, procedures used to notify an entity of deficiencies in 
its outpatient diabetes self-management training program, procedures to 
monitor the correction of those deficiencies, and procedures used to 
enforce compliance with accreditation requirements. We are also 
proposing the organization provide us with detailed information about 
the individuals who perform evaluations for the accreditation 
organization, including:
     The education and experience requirements for the 
individuals who perform evaluations.
     The content and frequency of the continuing education 
furnished to the individuals who perform evaluations.
     The process used to monitor the performance of individuals 
who perform evaluations.
     The organization's policies and practices with respect to 
the participation, in the accreditation process, by an individual who 
is professionally or financially affiliated with the entity being 
evaluated.
    We are proposing that the organization provide us with a 
description of the organization's data management and analysis system 
with respect to its accreditation activities and decisions, including 
the kinds of reports, tables, and other displays generated by that 
system. The organization must also provide a description of the 
organization's procedures for responding to and investigating 
complaints against a

[[Page 6834]]

deemed entity, including policies and procedures regarding coordination 
of these activities with appropriate licensing bodies, ombudsmen 
programs, and us.
    We are proposing that the organization must provide us with a 
description of its policies and procedures with respect to the 
withholding or removal of accreditation for failure to meet the 
accreditation organization's quality standards or requirements, and 
other actions the organization takes in response to noncompliance with 
its quality standards and requirements. This description must identify 
all types (for example, full or partial) and categories (for example, 
provisional, conditional, or temporary) of accreditation offered by the 
organizations, the duration of each type and category of accreditation 
and a statement identifying the types and categories that would serve 
as a basis for accreditation if we approve the accreditation 
organization. We are also proposing that the organization provide us 
with a list of all entities that it has currently accredited to furnish 
outpatient diabetes self-management training and the type, category, 
and expiration date of the accreditation held by each of them. In 
addition, we are proposing that the organization provide us with the 
name and address of each person with an ownership or control interest 
in the accreditation organization; documentation that demonstrates its 
ability to furnish us with electronic data in a format compatible to 
ours; and a resource analysis that demonstrates that its staffing, 
funding, and other resources are adequate to perform the required 
accreditation activities. The organization must acknowledge that, as a 
condition for approval and recognition by HCFA, it agrees to comply 
with the requirements set forth in Secs. 410.142 through 410.144.
    Finally, we are proposing that the national accreditation 
organization agrees to provide us with any additional information that 
we may request in order to respond to its request for our approval and 
recognition of its accreditation program to accredit entities to 
furnish outpatient diabetes self-management training services.
2. Onsite Visits
    We are proposing that we or our agent may visit the prospective 
accreditation organization's offices to verify information in the 
organization's application, including, but not limited to, review of 
documents, and interviews with the organization's staff.
3. Notice and Comment
    Because the approval of a national accreditation organization could 
have broad impact upon large numbers of organizations, providers, and 
beneficiaries, we are providing notice and comment opportunities. We 
would publish a proposed notice in the Federal Register if we consider 
approving a national accreditation organization's application for 
approval. The proposed notice would specify the basis for granting 
approval, a description of how the organization's accreditation program 
applies and enforces standards that have been determined by HCFA to be 
substantially equivalent to the quality standards for outpatient 
diabetes self-management training services set forth at Sec. 410.144. 
We would also allow an opportunity for public comment.
    We would publish a final notice in the Federal Register if we 
approve a national accreditation organization's request. Publication of 
the final notice would occur after we have reviewed the public comments 
received in response to the proposed notice. The final notice would 
specify the effective date of the approval, and the term of approval, 
which may not exceed 6 years.
4. Criteria We Would Use to Approve National Accreditation 
Organizations
    Section 410.142(e) proposes that in deciding to approve and 
recognize an organization's accreditation program to accredit entities 
to furnish outpatient diabetes self-management training services, we 
would consider the following criteria: (1) The organization applies and 
enforces quality standards that have been determined by HCFA to be 
substantially equivalent to the quality standards set forth at 
Sec. 410.144, (2) The organization meets the requirements for approved 
organizations in Sec. 410.143, (3) The organization is not owned or 
controlled by the entities it accredits, as defined in 
Sec. 413.17(b)(2) or (b)(3), respectively, of this chapter and (4) The 
accreditation organization does not accredit any entity it owns or 
controls.
5. Notice of Our Decision
    In Sec. 410.142(f), we propose that we would notify the prospective 
accreditation organization in writing of our decision. We would include 
the following information in our notice to the affected organization: 
(1) We would state whether we have approved or denied the 
organization's request, (2) If we deny the request we would provide our 
rationale for denial, and (3) We would communicate the procedures the 
organization must use for reconsideration and reapplication.
6. Reconsideration of Adverse Decisions
    Section 410.142(g) proposes that an accreditation organization that 
has received our notice of denial of its request for our approval and 
recognition of its accreditation program to accredit entities to 
furnish outpatient diabetes self-management training services may 
request reconsideration of our decision in accordance with part 488 
subpart D.
7. Request for Approval Following Denial
    Section 410.142(h) proposes that an accreditation organization that 
has received our notice of denial of its request for approval and 
recognition of its accreditation program to accredit entities to 
furnish outpatient diabetes self-management training services may 
submit a new request to us under the following conditions: (1) The 
organization has revised its accreditation program to correct the 
deficiencies we noted in our denial notice; (2) The organization must 
demonstrate through documentation that the quality standards used by 
the deemed entities have been determined by HCFA to be substantially 
equivalent to the quality standards for outpatient diabetes self-
management training services set forth at Sec. 410.144; and (3) After 
compiling this information, the organization must resubmit the 
application in its entirety. We are proposing that an accreditation 
organization that has requested reconsideration of our denial of its 
request for approval and recognition of its accreditation program to 
accredit entities to furnish outpatient diabetes self-management 
training services may not submit a new request until all administrative 
proceedings have been completed.
8. Withdrawal
    We are proposing that an organization requesting our approval and 
recognition of its accreditation program to accredit entities may 
withdraw its application at any time.
9. Reapplying for Accreditation
    We are proposing that an accreditation organization must request 
continued approval and recognition at least 6 months before the 
expiration of our approval and recognition of the accreditation 
organization's program.

[[Page 6835]]

G. Requirements for Approved Accreditation Organizations

1. Ongoing Responsibilities of an Approved Accreditation Organization
    Section 410.143 proposes the ongoing accreditation organization 
responsibilities. These responsibilities parallel those currently 
imposed on accreditors by other accreditation and deeming processes 
under Medicare. An accreditation organization approved and recognized 
by us must undertake the following activities on an ongoing basis. They 
must provide to us in writing and on a monthly basis all of the 
following information: (1) Copies of all accreditation decisions and 
any accreditation-related information that we may require (including 
corrective action plans and summaries of our quality standards that are 
unmet), (2) A notice of all complaints related to accredited entities, 
(3) If the organization takes any remedial action or adverse actions, 
within 30 days of taking those actions, (including revocation, 
withdrawal, or revision of an entity's accreditation status) against a 
deemed entity, information describing the remedial or adverse action 
and the circumstances that led to taking the action, (4) A notice of 
any proposed changes in its accreditation standards and requirements or 
evaluation process. If an organization implements changes without our 
approval, we may withdraw our approval and recognition of the 
organization's accreditation program.
    We are proposing that within 30 days of notification of a change in 
our quality standards, the organization submit to us its organization's 
plan to alter its quality standards to conform to our revised standards 
(including a crosswalk between our revised standards and the 
organization's revised standards) within or by the effective date 
specified in HCFA's notification of a change in the quality standards.
2. Oversight of Approved National Accreditation Organizations
    Section 410.143(b) proposes the specific criteria and procedures 
for continuing oversight. We perform oversight activities to ensure 
that an approved national accreditation organization and the entities 
the national accreditation organization accredits continue to meet our 
quality standards. We may contract with an entity to perform these 
oversight activities. Oversight consists of equivalency review, 
validation review, and onsite observation.
3. Equivalency Review
    We compare the national accreditation organization's standards and 
its application and enforcement of those standards to our comparable 
standards and processes when we impose new requirements or change our 
process for approving and recognizing accreditation organizations, an 
accreditation organization proposes to adopt new standards or changes 
in its accreditation process, or an accreditation organization 
reapplies to us for continuation of its approval and recognition by us 
of its program to accredit entities to furnish outpatient diabetes 
self-management training services.
4. Validation Reviews
    We or our agent may conduct an evaluation of an accreditation 
organization's own evaluation process, by conducting evaluations of 
deemed entities approved by the accreditation organization and 
comparing its results to the results of the accreditation 
organization's evaluation of the deemed entities. At the conclusion of 
the review, we identify any accreditation programs for which validation 
evaluation results indicate (1) a 20-percent rate of disparity between 
the accreditation organization's evaluation of the deemed entities and 
HCFA's (or its agent's) evaluation on standards that do not constitute 
immediate jeopardy to patient health and safety if unmet; or (2) any 
disparity at all on standards that constitutes immediate jeopardy to 
patient health and safety if unmet. Our beneficiary-centered approach 
to diabetes self-management training oversight dictates zero tolerance 
of accreditation organization failures to identify noncompliance that 
expose beneficiaries to such serious risk. At the conclusion of a 
validation review, we also identify any accreditation programs for 
which validation evaluation results indicate, irrespective of the rate 
of disparity, that there are widespread or systematic problems in an 
organization's accreditation process such that accreditation no longer 
provides assurance that the quality standards described in Sec. 410.144 
are met. Accreditation programs identified as noncompliant through 
validation review may be subject to withdrawal of our approval.
5. Onsite Inspections
    We may conduct an onsite inspection of the accreditation 
organization's operations and offices to verify information and assess 
the organization's compliance with its own policies and procedures. The 
onsite inspection may include, but is not limited to, reviewing 
documents, auditing meetings concerning the accreditation process, 
evaluating accreditation results or the accreditation status decision 
making process, and interviewing the organization's staff.
6. Withdrawal of Our Approval and Recognition
    If an equivalency review, validation review, onsite observation, or 
our daily experience with the accreditation organization suggest that 
an accreditation organization is not meeting the requirements of this 
subpart, we give the accreditation organization written notice of its 
intent to withdraw approval and recognition of the organization's 
accreditation program. We may withdraw our approval of an accreditation 
organization at any time if we determine that accreditation by the 
organization no longer guarantees that the approved entity meets the 
quality standards described in Sec. 410.144, and failure to meet those 
standards could jeopardize the health or safety of Medicare 
beneficiaries or constitute a significant hazard to the public health; 
or the accreditation organization has failed to meet its obligations 
for accreditation in Secs. 410.142 through 410.144.
7. Request for Reconsideration
    The final provision of this section proposes the process for 
reconsideration. An accreditation organization may request a 
reconsideration of our decision to withdraw our approval and 
recognition of the organization in accordance with subpart D of part 
488 of this chapter.

H. Quality Standards for an Approved Entity

    A national accreditation organization approved and recognized by us 
may accredit an entity to meet one of the following sets of standards: 
The quality standards prescribed by us; the National Standards for 
Diabetes Self-Management Education Programs, which were originally 
established by the National Diabetes Advisory Board (NDAB) and 
subsequently revised by organizations who participated in the 
establishment of standards by the Board; or a national nonprofit or 
not-for-profit organization that represents individuals (including 
individuals under Medicare) with diabetes as meeting standards for 
furnishing services.
1. Our Standards
    The BBA '97 authorized the Secretary to develop her own quality 
standards.

[[Page 6836]]

We believe that our proposed standards offer sufficient assurances that 
the outpatient diabetes self-management training programs would provide 
quality care and the standards are flexible enough to apply in any 
health care setting.
    In developing our standards, we have been heavily influenced by the 
National Standards for Diabetes Self-Management Education Program 
standards and agree that the structure necessary to provide quality 
diabetes self-management education consists of the human and material 
resources and the management systems needed to achieve program and 
participant goals. This structure includes the support and commitment 
of the organization sponsoring the program.
    We are committed to working with affected parties to implement 
these proposed standards and to impose a minimum burden to approved 
entities. Thus, in developing these proposed standards we have 
solicited suggestions from organizations representing ADA Education 
recognition programs, other organizations and the States. Many states 
have begun to write laws for the establishment of diabetes self-
management education programs. Conversely, there are States that have 
not developed laws to incorporate a diabetes self-management program 
within their current health systems. Based on the literature in the 
area of Diabetes Self-Management Education (Diabetes Care, Volume 18, 
Number 1, January 1995) and considering the recommendations of 
organizations such as the ADA, the American Association of Clinical 
Endocrinologist, the Diabetes Treatment Centers of American and the 
American Medical Association, the following are our proposed standards.
    Standard (1) Organizational structure: (i) Provides the educational 
resources to support the programs offered and the beneficiaries served, 
including adequate space, personnel, budget, instructional materials, 
confidentiality, privacy, and operational support.
    (ii) Defines clearly and documents the organizational 
relationships, lines of authority, staffing, job descriptions, and 
operational policies.
    (iii) Maintains a written policy that affirms education as an 
integral component of diabetes care.
    (iv) Assesses the service area to define the target population in 
order to appropriately allocate personnel and resources.
    (2) Environment. Maintains a safe and sanitary environment, 
properly constructed, equipped, and maintained to protect the health 
and safety of all patients and that meets all applicable fire 
protection and life safety codes.
    (3) Program staff. (i) Requires a program coordinator who is 
responsible for program planning, implementation, and evaluation.
    (ii) Requires nonphysician professional staff to obtain 14 hours of 
continuing education about diabetes, educational principles, and 
behavior change strategies every 2 years.
    (4) Team approach. (i) Except as permitted under paragraph 
(a)(4)(ii) of this section, furnishes services using a 
multidisciplinary instructional staff who are qualified to teach the 
training content areas required in paragraph (a)(5) of this section. 
The team must include at least a registered dietitian and a Certified 
Diabetic Educator (CDE) who have recent didactic and experiential 
preparation in diabetes clinical and educational issues.
    (ii) If the team includes a registered nurse, an approved entity 
may delay implementation of the requirements for a CDE until 3 years 
after the effective date of the final rule.
    We are proposing in Sec. 410.144(a)(4) that outpatient diabetes 
self-management training services must be furnished by a 
multidisciplinary team of at least two health care professionals who 
have didactic training or experience in diabetes clinical and 
educational issues. The team must include at least a registered 
dietitian and a CDE. We believe that accessibility to a CDE is 
important to persons with diabetes because they like to call their 
health care providers with questions about diabetes and any other 
health concerns they may have. It is during these kinds of encounters 
that the most active level of education and support in the behavior 
change process occurs, and where the CDE can be extremely valuable to 
the physician in managing patients with diabetes. By addressing the 
self-management educational needs of patients with diabetes, the CDE is 
able to alleviate the demand for time and attention that such patients 
place on their physicians. Recognizing that there may be a shortage of 
CDEs, we would delay the implementation of the CDE requirement. We 
believe that the general management of the vast majority of patients 
with diabetes is being provided by primary care physicians who may not 
have a CDE on staff but employ a registered nurse to provide the 
training at this time. Thus, we are allowing 3 years for a registered 
nurse to substitute for a CDE.
    The team members would be employees of an approved entity defined 
in Sec. 410.141(e) or capable of reassigning Medicare benefits to the 
approved entity.
    (5) Training content. Offers training and is capable of meeting the 
needs of its patients on the following subjects:
    (i) Diabetes overview/pathophysiology of diabetes.
    (ii) Nutrition.
    (iii) Exercise and activity.
    (iv) Diabetes medications (including skills related to the self-
administration of injectable drugs).
    (v) Self-monitoring and use of the results.
    (vi) Prevention, detection, and treatment of acute complications.
    (vii) Prevention, detection, and treatment of chronic 
complications.
    (viii) Foot, skin, and dental care.
    (ix) Behavior change strategies, goal-setting, risk factor 
reduction, and problem solving.
    (x) Preconception care, pregnancy, and gestational diabetes.
    (xi) Relationships among nutrition, exercise, medication, and blood 
glucose levels.
    (xii) Stress and psychosocial adjustment.
    (xiii) Family involvement and social support.
    (xiv) Benefits, risks, and management options for improving glucose 
control.
    (xv) Use of health care systems and community resources.
    (6) Training methods. (i) Offers individual and group instruction 
for effective diabetes self-management training services.
    (ii) Uses instructional methods and materials that are appropriate 
for the target population, and participants being served.
    (7) Review and plan of care and goals. (i) Reviews each 
beneficiary's plan of care.
    (ii) Develops and updates an individual assessment, in 
collaboration with each beneficiary, that includes relevant medical 
history, present health status, health service or resource utilization, 
risk factors, diabetes knowledge and skills, cultural influences, 
health beliefs and attitudes, health behaviors and goals, support 
systems, barriers to learning, and socioeconomic factors. Based on the 
assessment, develops, in collaboration with each beneficiary, an 
individual education plan. Documents the results, including assessment, 
intervention, evaluation and follow-up in the beneficiary's permanent 
medical record.
    (8) Educational intervention. Offers appropriate and timely 
educational intervention based on referral from the beneficiary's 
physician or nonphysician practitioner and based on periodic 
reassessments of health status,

[[Page 6837]]

knowledge, skills, attitudes, goals, and self-care behaviors.
    (9) Performance measurement and quality improvement. Establishes 
and maintains a performance measurement and quality improvement program 
that meets the following requirements:
    (i) Stresses health outcomes (for example, improved beneficiary 
diabetic control, beneficiary understanding, or beneficiary compliance) 
and provide for the collection, analysis, and reporting of data that 
permits measurement of performance outcomes, or other quality 
indicators, such as, monitoring for compliance, lost work or school 
days, metabolic control, or others.
    (ii) Requires an entity to take the following actions:
    (A) Evaluate itself on an annual basis as to its effectiveness in 
using these measures.
    (B) Improve its performance on at least one outcome or quality 
indicator each year.
    (C) If requested, report to us nationally standardized performance 
measures to the extent that they become available in the future and the 
Secretary determines they are appropriate.
    (D) Meet minimum performance levels on performance measures 
described in this paragraph (a)(9) established by us, which are based 
on national or local empirical experience and are prospectively 
announced to allow sufficient time for compliance.
    (10) Peer Review Organization review. Has an agreement with a PRO, 
which has a contract with us to perform quality assurance reviews. At a 
minimum, the agreement allows the PRO access to beneficiary or group 
therapy records and binds an approved entity to comply with corrective 
actions or to participate in quality improvement projects that the PRO 
determines are necessary.
    We understand that there may be certain disincentives to adopt our 
standards as a result of these last requirements because the approved 
entity may not have access to all of the quality data requested by us. 
However, we believe that any responsible outpatient diabetes self-
management training program would want to know how effective their 
program is therefore, we do not think that it is unreasonable to 
require the approved entity to report certain quality indicators to the 
PRO. We are soliciting comments on this approach and whether or not it 
appears to be too burdensome for the approved entities.
2. The National Standards for Diabetes Self-Management Education 
Programs
    The NDAB, in collaboration with other diabetes-related groups, 
developed standards in 1983 in response to concerns that the quantity 
and quality of diabetes education varied considerably throughout the 
United States. It was hoped that the application of uniform standards 
would increase the quality, availability, and effectiveness of diabetes 
education, as well as accessibility, through third-party payment. The 
standards were deliberately designed to be general enough to be 
implemented in a variety of settings and to deal largely with the 
process of development and maintenance of quality diabetes education 
programs. The original standards consisted of 10 components, with each 
component divided into elements applicable to the sponsoring 
institution or the educational program. Review criteria were developed 
as a method to measure a program's achievement of the standards. The 
review criteria were extensively pilot tested and found to be feasible, 
practical, and appropriately stringent.
    Using these criteria, the ADA implemented a process in 1986 to 
officially recognize programs that meet the National Standards for 
Diabetes Self-Management Education Programs (NSDSMEP). To achieve 
recognition, a program must undertake a voluntary extensive self-
evaluation and documentation process for each element of the standards. 
Programs that meet these standards are awarded a certificate.
    In 1993, the NDAB charged a task force of representatives from the 
ADA and other organizations to review the current standards and make 
recommendations for retention or revision. The revised National 
Standards for Diabetes Self-Management Education Programs define 
quality programs in terms of structure, process, and outcomes. Each of 
these three program components is subdivided into elements. There are 
standards for each of these elements. As mentioned previously in this 
preamble, the statute has deemed the National Standards for Diabetes 
Self-Management Programs as they appear in Diabetes Care, Volume 21, 
Supplement 1, January 1998. If the ADA and other organizations votes by 
majority vote to amend or change one of standards in the future, we 
reserve the right to approve or disapprove such change as described in 
Sec. 410.143, ``Requirements on approved accreditation organization.'' 
We expect that the ADA would apply to HCFA as an accreditation 
organization and would be quickly approved and recognized because the 
ADA uses the NSDSMEP. We would require all approved entities that meet 
these standards to provide us with a copy of their certification from 
the ADA as proof of meeting these standards. This would include a copy 
of their proof of renewal at the time they are required to renew their 
educational programs with the ADA.
    Applying for Education Recognition by the ADA requires the 
submission of an application plus a processing fee. Each application 
must include demographic data on the participants served, instructor 
qualifications, annual program review, the program's curriculum and 
educational materials, education records with follow-up evaluations, 
and outcomes data. To apply, a program must obtain a copy of the 
current ``Meeting the Standards'' manual to understand the review 
criteria and must have furnished training since and collected 12 months 
of data. At the end of the 12 month data collection period, three 
separate copies of the completed application are submitted to the ADA 
Education Recognition Program along with the current processing fee.
    The completed application is reviewed by an expert panel of 
diabetes educators. After official notification of Education 
Recognition, the program is sent an Education Recognition Certificate 
from the ADA.
    We are proposing in Sec. 410.72 that the program may be one that, 
at a minimum meets all of the National Standards for Diabetes Self-
Management Education Programs established by the NDAB and revised by a 
task force of representatives of diabetes and other organizations and 
has a certificate of education recognition awarded by the ADA. The 
National Standards for Diabetes Self-Management Education Programs and 
ADA review criteria follows:
    Standard 1. The sponsoring organization shall have a written policy 
that affirms education as an integral component of diabetes care.
    Review criterion: 1-1. There is a written statement from the 
sponsoring organization to reflect that self-management education is an 
integral component of diabetes care.
    Standard 2. The sponsoring organization shall identify and provide 
the educational resources required to achieve its educational 
objectives in terms of its target population. These resources include 
adequate space, personnel, budget, and instructional materials.
    Review criterion: 2-1. For both individual and group instruction, 
resources (including space, staff, budget, and educational materials) 
are adequate to support the programs offered and the participants 
served.

[[Page 6838]]

    Standard 3. The organizational relationships, lines of authority, 
staffing, job descriptions, and operational policies shall be clearly 
defined and documented.
    Review criterion: 3-1. The relationships among the sponsoring 
organization and the diabetes program coordinator, staff, and the 
advisory committee are clearly defined.
    3-2. There is a description of the following for the coordinator 
and each instructional staff member:
     Role in the program.
     Teaching responsibilities.
     Other program responsibilities.
     Amount of time spent in the program.
    3-3. There are written policies approved by the advisory committee 
concerning the operation of the program.
    Standard 4. The service area shall be assessed in order to define 
the target population and determine appropriate allocation of personnel 
and resources to serve the educational needs of the target population.
    Review criterion. 4-1. The target population is defined 
(specifically the potential number to be served, types of diabetes, age 
range, language, ethnicity, unique characteristics, and special 
educational needs).
    Standard 5. A standing advisory committee consisting of a 
physician, a nurse educator, a dietitian, an individual with behavioral 
science expertise, a consumer, and a community representative, at a 
minimum, shall be established to oversee the program.
    Review Criteria. 5-1. The advisory committee members specified 
above attend at least two meetings a year.
    5-2. The health professional members include at least one 
physician, one nurse educator, and one registered dietitian, each with 
expertise in diabetes.
    5-3. The individual with behavioral science expertise is any 
professional with academic preparation in the behavioral sciences; for 
example, counseling, health behavior, psychology, social work, and 
sociology.
    5-4. The consumer is any individual with diabetes or the caretaker 
thereof.
    5-5. The community representative is any individual not employed by 
the institution.
    5-6. There is a written policy concerning the membership and 
responsibilities of the advisory committee.
    5-7. There is documentation that the advisory committee is 
fulfilling its responsibilities to approve the program plan, recommend 
and approve policy, and review the program annually.
    Standard 6. The advisory committee shall participate in the annual 
planning process, including determination of target audience, program 
objectives, participant access mechanisms, instructional methods, 
resource requirements (including space, personnel, budget, and 
materials), participant follow-up mechanisms, and program evaluation.
    Review criterion. 6-1. There is documentation that the advisory 
committee approves a written program plan each year that includes the 
items specified above.
    Standard 7. Professional program staff shall have sufficient time 
and resources for lesson planning, instruction, documentation, 
evaluation, and follow-up.
    Review criterion. 7-1. The instructor's available hours and 
resources are adequate to meet the needs of the program and the 
participants.
    Standard 8. Community resources shall be assessed periodically.
    Review criterion. 8-1. There is a list (including name, address, 
and telephone number) of community resources within the service area 
that serve the target population and their families. This list is 
reviewed and updated yearly by the advisory committee.
    Standard 9. A coordinator shall be designated who is responsible 
for program planning, implementation, and evaluation.
    Review Criteria. 9-1. The job description for the program 
coordinator includes his/her responsibilities for:
     Acting as a liaison between the program staff, the 
advisory committee, and the administration of the institution.
     Providing and/or coordinating the orientation and 
continuing education for the professional program staff.
     Participating in the planning and review of the program 
each year.
     Participating in the preparation of the program budget.
     Evaluating program effectiveness.
     Serving as the chair or a member of the advisory 
committee.
     Overseeing the program with on-site supervision.
    9-2. The program coordinator is a CDE or has completed at least 24 
hours of approved continuing education that includes a combination of 
diabetes, educational principles, and behavior strategies.
    Standard 10. Health care professionals with recent didactic and 
experiential preparation in diabetes clinical and educational issues 
shall serve as the program instructors. Certification as a diabetes 
educator by the National Certification Board for Diabetes Educators 
(NCBDE) is recommended. Multidisciplinary instructional staff who are 
collectively qualified to teach the required content areas shall 
include at least (1) a registered dietitian and (2) either a registered 
nurse or other health professional who is a CDE.
    Review criteria. 10-1. Program instructors are professional staff 
who routinely teach in the diabetes self-management education program 
and include at least (1) a registered dietitian and (2) either a 
registered nurse or other health professional who is a CDE.
    10-2. Program instructors are health care professionals with a 
valid license, registration, or certification and who are CDEs or have 
completed at least 16 hours of approved continuing education that 
includes a combination of diabetes, educational principles, and 
behavioral strategies.
    Standard 11. Professional program staff shall obtain education 
about diabetes, educational principles, and behavioral change 
strategies on a continuing basis.
    Review criterion. 11-1. The program coordinator and all instructors 
complete at least 6 hours per year of approved continuing education 
that includes a combination of diabetes, educational principles, and 
behavioral strategies.
    Standard 12. Based on the needs of the target population, the 
program shall be capable of offering instruction in the following 
content areas:
    a. Diabetes overview.
    b. Stress and psychosocial adjustment.
    c. Family involvement and social support.
    d. Nutrition.
    e. Exercise and activity.
    f. Medications.
    g. Monitoring and use of results.
    h. Relationships among nutrition, exercise, medication, and blood 
glucose levels.
    i. Prevention, detection, and treatment of acute complications.
    j. Prevention, detection, and treatment of chronic complications.
    k. Foot, skin, and dental care.
    l. Behavior change strategies, goal setting, risk factor reduction, 
and problem solving.
    m. Benefits, risks, and management options for improving glucose 
control.
    n. Preconception care, pregnancy, and gestational diabetes.
    o. Use of health care systems and community resources.
    Review criteria. 12-1. There is a written curriculum that includes 
educational objectives, content outline, instructional methods and 
materials,

[[Page 6839]]

and the means for evaluating achievement of the objectives for each 
content area or session of the program.
    12-2. The curriculum is current and includes all 15 content areas 
as appropriate for the identified target population.
    Standard 13. The program shall use instructional methods and 
materials that are appropriate for the target population and the 
participants being served.
    Review criterion. 13-1. Instructional methods and materials are 
appropriate for the target population and participants in terms of 
cultural relevance, age, language, reading levels, and special 
educational needs.
    Standard 14. A system shall be in place to inform the target 
population and potential referral sources of the availability and 
benefits of the program.
    Review criterion. 14-1. The program reviews marketing strategies 
for the target population and potential referral sources annually.
    Standard 15. The program shall be conveniently and regularly 
available.
    Review criterion. 15-1. Program utilization, program completion 
rate, and waiting periods are assessed yearly.
    Standard 16. The program shall be responsive to requests for 
information and referrals from consumers, health care professionals, 
and health care agencies.
    Review criterion. 16-1. There is a procedure for responding to 
requests for information and referrals.
    Standard 17. An individualized assessment shall be developed and 
updated in collaboration with each participant. The assessment shall 
include relevant medical history, present health status, health service 
or resource utilization, risk factors, diabetes knowledge and skills, 
cultural influences, health beliefs and attitudes, health behaviors and 
goals, support systems, barriers to learning, and socioeconomic 
factors.
    Review criterion. 17-1. An initial assessment of the items 
specified above is documented in the education record and updated as 
needed.
    Standard 18. An individualized education plan, based on the 
assessment, shall be developed in collaboration with each participant.
    Review criterion. 18-1. The participant's pre-program knowledge and 
skill level in relation to the fifteen content areas of the National 
Standards is assessed. Educational needs are identified with the 
participant and documented in the education record.
    Standard 19. The participant's educational experience, including 
assessment, intervention, evaluation, and follow-up shall be documented 
in a permanent medical or education record. There shall be 
documentation of collaboration and coordination among program staff and 
other providers.
    Review criteria. 19-1. The participant's progress through the 
program is documented in the educational record and includes:
     The initial assessment and education plan as specified 
above.
     An indication of the content taught, dates of instruction, 
and the instructors.
     Post-program assessment of the participant's knowledge and 
skill level of each of the appropriate content areas of the National 
Standards.
     Behavioral goals.
     A plan for follow-up.
     Communication of participant's progress and any follow-up 
recommendations to the primary care provider.
     Follow-up assessment and any resulting interventions.
    19-2. Each program instruction documents his/her own interventions 
with the participants.
    19-3. Communication and collaboration among program staff are 
facilitated by and documented in the education record.
    Standard 20. The program shall offer appropriate and timely 
educational interventions based on periodic reassessments of health 
status, knowledge, skills, attitudes, goals, and self-care behaviors.
    Review criteria. 20-1. At least one follow-up assessment of the 
items specified above and any interventions are documented in the 
education record.
    20-2. Participants achievement of behavioral goals is assessed and 
documented 1-3 months after goal setting.
    Standard 21. The advisory committee shall review program 
performance annually, including all components of the annual program 
plan and curriculum, and use the information in subsequent planning and 
program modification.
    Review criteria. 21-1. The advisory committee conducts and 
documents the results of an annual review of the program including:
     Program objectives.
     The curriculum, instructional methods, educational 
materials, and community resource list.
     Actual audience compared to the target population.
     Participant access and follow-up mechanisms.
     Program resources (space, personnel, and budget).
     Program effectiveness/participant outcomes.
     Marketing strategies to the target population and any 
potential referral sources.
    21-2. The results of the annual review are reflected in the next 
annual program plan.
    Standard 22. The advisory committee shall annually review and 
evaluate predetermined outcomes for program participants.
    Review criteria. 22-1. Participants' outcomes are measured and 
evaluated, specifically, the degree to which the participants achieve 
their behavioral goals and one other outcome measure (for example, 
monitoring for complications, lost work or school days, metabolic 
control, or others).
    22-2. The program's effectiveness at improving outcomes among 
participants is evaluated by the advisory committee and the results of 
this evaluation are reflected in the next annual program plan.
3. Standards of an Organization That Represents Individuals With 
Diabetes.
    We propose that an organization may apply to us for approval of its 
standards so that we can recognize it as an ``organization that 
represents individuals with diabetes.'' Upon our approval, and 
recognition, the organization may deem that a physician, individual, or 
entity has met the quality standards for a deemed entity. We would 
review and consider applications for approval and recognition only from 
organizations that represent individuals with diabetes including 
Medicare beneficiaries. Given the Congress' interest in ensuring the 
well-being of Medicare beneficiaries with diabetes, we do not believe 
that Congress intended that anyone with frivolous criteria could apply 
to us for recognition as an accrediting organization. In fact, we 
believe that these other organizations would have comprehensive bona 
fide quality standards and be organizations that are either non-profit 
or not-for-profit with demonstrated experience in representing the 
interest of individuals with diabetes. This could include, 501(c)(3) 
organizations, existing accrediting organizations, or professional 
organizations that do not have a proprietary or financial interest with 
the entities they would be accrediting. It is our intention to be able 
to approve organizations as ``organizations that represent individuals 
with diabetes'' upon the effective date of the final rule. Therefore, 
we would begin accepting applications from organizations. Applications 
should be mailed to the following address: Office of Clinical Standards 
and Quality, Room S3-02-01,

[[Page 6840]]

Health Care Financing Administration, 7500 Security Blvd., Baltimore, 
MD 21244.
I. Requirements for Deemed Entities
    Section 1865 gives us the authority to deem that any provider 
entity meets certain requirements if the entity is accredited and 
periodically reaccredited by a national organization. The process that 
must ensure that the entity, as a condition of accreditation, meets 
standards that are at least as stringent as our applicable standards.
    Section 410.145(a) specifies the conditions under which an approved 
entity may be deemed to meet the quality requirements. The first 
requirement is that the approved entity have submitted necessary 
documentation and be fully accredited (and periodically reaccredited) 
by a national accreditation organization approved by us. Only full 
accreditation offers us adequate assurance that the approved entity 
meets the quality standards. Entities that are conditionally or 
provisionally accredited (or the equivalent thereof) by their 
accreditation organization do not meet all of their accreditation 
organization's standards, and for this reason, would not be deemed to 
meet quality standards in Sec. 410.144.
    The second requirement is that the entity may not be accredited by 
an organization that owns or controls the entity. We believe this 
requirement is necessary to prevent a conflict of interest.
1. Effective Date for Deemed Entities
    Section 410.145(b) establishes when deemed status is effective. 
Deemed status is effective on the later of the following dates: the 
date on which the accreditation organization is approved by us, or the 
date that the accreditation organization deems the entity to meet the 
HCFA quality standards described in Sec. 410.144. Medicare payment may 
not be made to an entity before the entity meets all of the 
requirements to be approved by us under Sec. 410.141(e). Medicare 
payment would be made only for those services that are furnished after 
the date we approve the entity to furnish services (Sec. 424.44(d)).
2. Requirements for Deemed Entities
    Section 410.145(c) establishes the obligations of deemed entities. 
We are proposing that as a requirement for deemed status, an entity 
must, before submitting a claim for Medicare payment, forward a copy of 
its certificate or proof of accreditation from its accreditation 
organization indicating that the entity meets the quality standards 
described in Sec. 410.144. In addition, an entity deemed to meet 
Medicare standards must submit to evaluations to validate its 
accreditation organization's accreditation process, and authorize its 
accreditation organization to release to us a copy of its most current 
accreditation evaluation, together with any information related to the 
evaluation that we may require (including corrective action plans.) 
These two activities are part of our ongoing oversight strategy for 
ensuring that the accreditation organization applies and enforces its 
accreditation standards in a manner comparable to ours.
3. Removal of deemed status.
    Section 410.145(d) addresses removal of deemed status. We would 
remove an entity's deemed status if: (1) We determine, on the basis of 
our own evaluation or the results of the accreditation evaluation, that 
the entity does not meet the quality standards for outpatient diabetes 
self-management training; (2) we withdraw our approval of the 
accreditation organization that deemed the entity to furnish outpatient 
diabetes self-management training; however, the removal of the entity's 
deemed status would not occur until 60 days after the accreditation 
organization is no longer recognized or (3) the entity fails to meet 
the requirements for deemed entities in Sec. 410.145(c).
    If we remove recognition of an accreditation organization because 
of its failure to meet our requirements, those entities who have deemed 
status with that accreditation organization would have up to 60 days to 
become accredited by another accreditation organization approved by us.
    The final paragraph in Sec. 410.145(d)(3) states that we can remove 
deemed status if the entity fails to meet the requirements in 
Sec. 410.145(c). We retain the authority to initiate enforcement action 
against any entity that it determines, on the basis of its own 
evaluation or the results of the accreditation evaluation, no longer 
meets the Medicare standards for which deemed status was granted. We 
expect the accreditation organization to have a system in place for 
enforcing compliance with its standards, perhaps sanctions for 
motivating correction of deficiencies, but we cannot delegate to the 
accreditation organization the authority to terminate the entity's 
approval.

J. Outpatient Diabetes Self-Management Training Payment Methodology

1. Proposed Method of Payment
a. Consultation With Industry
    In keeping with the requirements of the BBA '97, we have consulted 
individually with the same groups and organizations mentioned 
previously to establish payment amounts for outpatient diabetes self-
management training services that would be paid under the physician fee 
schedule. The consensus among the industry is that cost data on 
providing diabetes training is inadequate. We consulted with the ADA to 
provide us with guidance in assessing the types of resource inputs that 
a typical diabetes training program would use in order for us to price 
diabetes services.
b. Calculation of proposed RVUs
    We do not expect to establish physician work RVUs for diabetes 
outpatient self-management training services, because we believe 
diabetes training can appropriately be performed by individuals other 
than a physician. We would establish, however, practice expense and 
malpractice expense RVUs for these services. Our plans for the future 
are to develop the practice expense RVUs for diabetes training in a 
manner consistent with the resource-based practice expense methodology 
used for all other services paid under the physician fee schedule. The 
development of resource-based practice expense RVUs is the subject of a 
separate proposed rule (HCFA-1006-P) published in the Federal Register 
on June 5, 1998 (63 FR 30818). Malpractice RVUs for diabetes training 
have been extrapolated based on analogous procedures.
2. Costs Included in Developing Payment
    The direct costs attributed to the provision of this service are 
the costs of an hourly professional salary (for example, registered 
nurse, registered dietitian, or certified diabetes educator), 
counseling materials, special equipment, administrative costs of 
billing, record maintenance, and the scheduling of patients. Indirect 
costs include the cost of office equipment and supplies, continuing 
training, accounting, office rent, utilities, and similar costs.
3. Determining Resource Inputs
    Section 1848 of the Act requires that payments under the physician 
fee schedule be based on national uniform RVUs based on the resources 
used in furnishing a service. The resource

[[Page 6841]]

inputs that we would use to determine the practice expense RVUs for 
this service would be based on the estimated cost for furnishing an 
hourly training session by the ADA. In order to be consistent with 
national RVUs under the physician fee schedule, we would adjust the 
hourly professional salary, change the physician component to a 
professional salary rate, disallow for appointment cancellations, 
increase the scheduling secretary's salary, and adjust the allowance 
for billing costs and telephone calls. We would recognize the legal 
fees for malpractice insurance as part of the separate malpractice RVU. 
The following shows the estimated cost determination worksheet provided 
to us by the ADA along with our adjustments to the cost estimates in 
order to make the ADA's estimated costs consistent with the national 
physician fee schedule.

 Table 1.--Diabetes Self-Management Training Resource Costs Provided by the American Diabetes Association (ADA) and HCFA's Adjustments Used to Determine
                                                                    Proposed Payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Services (data provided by    ADA estimated       HCFA adjustments                                    HCFA adjusted costs
             ADA)                   costs           individual/group       HCFA RVUs individual/group    individual/group            AMA category
--------------------------------------------------------------------------------------------------------------------------------------------------------
         DIRECT COSTS
 
Professional Salary/Hour (RN   $24.00........  ..........................  ..........................  ....................  ...........................
 or RD).
Benefits/hour (28% salary)...  6.72..........  $25.32=National             ..........................  ....................  ...........................
                                                Professional Rate
                              ----------------------------------------------------------------------------------------------
    Total....................  30.72.........  25.32/2.53*...............  0.69/0.07.................  $25.32/2.53*........  Clinical.
Physician Component            3/min.........  ..........................  ..........................  ....................  ...........................
 (Oversight).
                              ----------------------------------------------------------------------------------------------
    Total....................  6.00..........  0.84/0.84.................  0.02/0.02.................  0.84/0.84...........  Clinical.
Counseling Materials:
    Printed Videos, Strips,    5.00..........  ..........................  ..........................  5.00/5.00...........  Medical supplies.
     Medical Supplies.
Special Equipment:
    Computer Software ($6,000  0.96..........  ..........................  ..........................  0.96/0.96...........  Office supplies.
     over 3 years).
    Calculators, Scales,       0.25..........  ..........................  ..........................  0.25/0.25...........  Medical supplies.
     Gloves.
    Reference Materials        0.25..........  ..........................  ..........................  0.25/0.25...........  Other.
     (Journals, Books, etc.)
     ($500/year).
Costs of Operation:
    Billing Insurance Forms/   6.40..........  ..........................  ..........................  2.13/2.13**.........  Clerical.
     Follow-Up (8% of cost).
    Record Maintenance         3.00..........  ..........................  ..........................  3.00/3.00...........  Clerical.
     (charts, files).
    Scheduling Patients (10    2.00..........  2.15 is National            0.06/0.06.................  2.15/2.15...........  Clerical.
     min.  x  $12).                             scheduling secretary rate.
    Reports to Referral        4.32..........  ..........................  ..........................  4.32/4.32...........  Clerical.
     Source.
    No shows.................  3.00..........  0.00......................  Not allowed cost..........  0.00/0.00...........  ...........................
    Phone Calls (one 15-       7.50..........  ..........................  ..........................  3.75/3.75***........  Office.
     minute call/visit 30/
     hour.
                              ----------------                            --------------------------------------------------
        Total................  32.68.........  ..........................  0.59/0.59.................  21.81/21.81.........  ...........................
        Total Direct Costs...  69.40.........  ..........................  ..........................  47.97/25.18.........  ...........................
 
        INDIRECT COSTS
 
Rent.........................  2.25..........  ..........................  ..........................  2.25/2.25...........  Office.
Utilities....................  1.40..........  ..........................  ..........................  1.40/1.40...........  Office.
Office Supplies & Equipment..  1.73..........  ..........................  ..........................  1.73/1.73...........  Office.
Telephone ($125/m/173.3 wk.    0.72..........  ..........................  ..........................  0.72/0.72...........  Office.
 Hrs. Mo.).
Continuing Education.........  0.72..........  ..........................  ..........................  0.72/0.72...........  Other.
Accounting...................  0.25..........  ..........................  ..........................  0.25/0.25...........  Other.
    Total Indirect Costs.....  7.07..........  ..........................  0.19/0.19.................  7.07/7.07...........  ...........................
                              ----------------                            --------------------------------------------------
    Legal Fees=Total           0.20..........  0.37......................  0.01/0.01.................  0.37/0.37...........  Malpractice Expense.
     Malpractice RVU.
                              ----------------                            --------------------------------------------------
    Total Individual/Group     76.67.........  ..........................  1.51/0.89.................  55.41/32.62*........  ...........................
     Costs.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Based on an average of 10 members in a group, since a group is defined as 2 to 20 individuals.
** Based on the average of three billings during an individual and group session.
*** Based on a 50% telephone contact to beneficiaries during individual and group sessions.

4. Payment
    We propose to pay this service under the physician fee schedule 
(Sec. 414.62). The proposed RVUs are as follows:

------------------------------------------------------------------------
                                                 Group sessions per
            Individual sessions                      individual
------------------------------------------------------------------------
Physician Work RVUs = 0...................  Physician Work RVUs = 0.
Practice Expense RVUs = 1.51..............  Practice Expense RVUs = .89.

[[Page 6842]]

 
Malpractice Expense RVUs = .01............  Malpractice Expense RVUs =
                                             .01.
------------------------------------------------------------------------

    Table 1 explains how we derived the proposed payment rates for 
providing diabetes training on an individual basis and in a group 
setting, based on the estimated resource costs provided by the ADA. 
Since the number of beneficiaries within a group would vary, we have 
based our methodology on an assumption that there would typically be 10 
beneficiaries attending a group session.
    The Act requires that payments vary among fee schedule areas 
according to the extent that resource costs vary as measured by the 
geographic practice cost indices (GPCIs). Section 1848(e)(1)(C) of the 
Act requires us to review and, if necessary, adjust the GPCIs at least 
every 3 years. On October 31, 1997, we published a final rule, 
Revisions to Payment Policies and Adjustments to the Relative Value 
Units Under the Physician Fee Schedule, Other Part B Payment Policies, 
and Establishment of the Clinical Psychologist Fee Schedule for 
Calendar Year 1998 (62 FR 59256). Addendum E to that rule identifies 
the 1999 GPCIs for practice expense RVUs and malpractice expense RVUs.
    Using the proposed RVUs, we would pay $55.41 for individual 
sessions and $32.62 per person within a group session. These same 
payment rates would apply for the 1-hour annual refresher training. 
Actual payments to an entity approved by us would be adjusted for 
geographic variation and determined based on the physician fee schedule 
methodology as described in a separate final rule published in the 
Federal Register on October 31, 1997 (62 FR 59048).
    Billing for payment would be submitted in 60-minute increments. The 
following CPT codes would be used for billing:
    G0108--Outpatient diabetes self-management training services, 
individual session, per 60 minutes of training.
    G0109--Outpatient diabetes self-management training services, group 
session, per individual, per 60 minutes of training.
    Based on information received from the diabetes industry, we 
propose that beneficiaries receive up to 10 hours of diabetes training 
within the same year, either as an individual or within a group 
setting. As previously stated in this proposed regulation, we are 
proposing that all beneficiaries who receive the initial training 
program be eligible for an annual single training session of up to one 
hour (a group session, unless an individual session is needed based on 
the same criteria listed above).
    We would refine the diabetes training payment amount in the future 
by incorporating this service into the refinement process used for 
other Medicare services payable under the physician fee schedule. 
Medicare co-payments and deductibles would apply for diabetes 
outpatient self-management training services.

K. Time Limits for Filing Claims

    We are proposing to add a new paragraph (d), ``Outpatient diabetes 
self-management training,'' to Sec. 424.44, ``Time limits for filing 
claims.'' New paragraph (d) would state that we would make payment to 
an entity for the furnishing of outpatient diabetes self-management 
training after we approve the entity to furnish the services under part 
410 subpart H.

L. Photocopying Reimbursement and Mailing Costs for Practitioners

    Section 4105(c) of the BBA '97 requires the Secretary to establish 
outcome measures, including glycosylated hemoglobin (past 90-day 
average blood sugar levels), for purposes of evaluating the improvement 
of the health status of Medicare beneficiaries with diabetes mellitus. 
In order to obtain adequate clinical documentation used in developing 
these outcome measures, we would direct Peer Review Organizations to 
collect this information from a physician or qualified nonphysician 
practitioner treating a beneficiary with diabetes as authorized by 
Sec. 476.111(a).
    We are proposing to pay physicians and nonphysician practitioners 
for photocopying and mailing cost directly attributable to the 
physician or nonphysician's responsibility to the PROs to provide 
photocopies of requested beneficiary medical records (Sec. 476.111(d)). 
The proposed payment is $.10 per page for photocopying plus first class 
postage costs for mailing the records. The proposed photocopying amount 
includes the cost of labor, supplies, equipment, and overhead. We are 
proposing the above amount based on the final rule establishing 
photocopying payment for hospitals published in the Federal Register 
(See 57 FR 47779 through 47787, October 20, 1992).

M. Appeals

    We propose that in order to become an approved entity, a physician, 
individual, or entity must be approved by an accreditation organization 
and approved by us. If an individual, physician, or entity is found not 
to meet the conditions in either Sec. 410.141(e), we would disapprove 
the application. We would provide administrative review of this 
decision by using the procedures for suppliers in part 498. Similarly, 
in the event we find an approved entity not to be in compliance with 
the conditions set forth in Sec. 410.141(e), we may revoke the approved 
entity's Medicare billing number. In that event, we would also provide 
administrative appeal rights under the procedures in Part 498. 
Therefore, we have revised the definition of ``supplier'' that appears 
in Sec. 498.2 to include an ``approved entity'' for furnishing 
outpatient diabetes self-management training.

N. Outcome Measures

    We are requesting comments on the type of process and outcome 
measures we should be collecting in the future in order to review the 
progress of beneficiaries and the success of programs. We also solicit 
comments on the desirability in the future of replacing these proposed 
prescriptive training and personnel requirements with reliance on 
outcome measures.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act (PRA) 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 PRA requires that we 
solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
information collection requirements (ICRs) as summarized and discussed 
below.

Section 410.141  Outpatient Diabetes Self-management and Training

    Section 410.141(b) states that diabetes self-management training 
must be included in a comprehensive plan of

[[Page 6843]]

care and documented in the patient's medical record by the physician or 
qualified nonphysician practitioner treating the beneficiary for 
training services that meet the requirements of this section. In 
addition, this section requires that HCFA-approved entities submit 
their plan of care to HCFA upon request. While the documentation and 
recordkeeping requirement imposed by this section is subject to the 
PRA, the requirements to disclose information to HCFA upon request are 
not subject to the PRA in accordance with 5 CFR 1320.4(a)(2), since the 
disclosure of information to or for a Federal agency during the conduct 
of an administrative action or audit involving an agency against 
specific individuals or entities is exempt from the PRA.
    Therefore, the burden associated with this section that is subject 
to the PRA is the time and effort for the physician or qualified 
nonphysician practitioner to ensure that each patient's plan of care is 
documented and maintained in his or her medical record. We estimate 
that it will require 30 minutes to document each plan of care. And, on 
an annual basis there will be 2,250,000 required plans of care 
(2,000,000 aged beneficiaries + 250,000 disabled beneficiaries). 
Therefore, the total annual burden of this requirement is 1,125,000 
hours (2,250,000 plans of care * 30 minutes = 1,125,000 hours).
    Section 410.141(c)(2) requires the physician or qualified 
nonphysician practitioner treating the beneficiary document in the 
beneficiary's medical record the specific medical condition that the 
additional beneficiary training must address.
    While this ICR is subject to the PRA, we believe the burden 
associated with this ICR is exempt in accordance with 5 CFR 
1320.3(b)(2) because the time, effort, and financial resources 
necessary to comply with these requirements would be incurred by 
persons in the normal course of their activities.
    Section 410.141(c)(3)(ii) states that the beneficiary's physician 
or qualified nonphysician practitioner must document in the 
beneficiary's medical record that the beneficiary has special needs, 
such as severe vision, hearing, or language limitations that would 
hinder effective participation in a group training session.
    While this ICR is subject to the PRA, we believe the burden 
associated with this ICR is exempt in accordance with 5 CFR 
1320.3(b)(2) because the time, effort, and financial resources 
necessary to comply with these requirements would be incurred by 
persons in the normal course of their activities.
    Section 410.141(e)(3) requires that an entity submit the necessary 
documentation to, and is accredited by, an accreditation organization 
approved by HCFA under Sec. 410.142 to meet one of the sets of quality 
standards described in Sec. 410.144. The burden associated with this 
requirement is the time and effort necessary for an entity requesting 
to be deemed to submit the necessary documentation to an accreditation 
organization. It is estimated that it will take each of the estimated 
750 entities 60 hours to complete these requirements every 3 years, for 
an annual burden of 20 hours. Therefore, the total annual burden 
imposed by these requirements is estimated to be 15,000 hours.
    Section 410.141(e)(4) states that a physician, individual, or 
entity must provide documentation to HCFA as requested.
    Since this requirement will be collected as part of an 
investigation or audit against specific individuals or entities, we 
believe that this ICR is exempt in accordance with 5 CFR 1320.4(a)(2). 
In addition, we believe that since the request for information is 
addressed to a single person as defined in 5 CFR 1320.3(h)(6), the 
collection does not meet the definition of an information collection as 
defined in 5 CFR 1320.3(c).

Section 410.142  HCFA Process for Approving National Accreditation 
Organizations

    Section 410.142(b) states that a national organization requesting 
accreditation approval by HCFA must furnish to HCFA the information and 
materials described in this section.
    The burden associated with these requirements is the time and 
effort to furnish to HCFA the information and materials described in 
this section. It is estimated that during the first year it will take 5 
national organizations 96 hours to comply with these requirements. 
Since organizations will generally be approved for at least 6 years, we 
have annualized the total burden to be 96 * 5 = 480 hours/6 years = 80 
annual hours.
    Section 410.142(c) states that HCFA may visit the prospective 
accreditation organization's offices to verify information in the 
organization's application, including, but not limited to, review of 
documents, and interviews with the organization's staff.
    The burden imposed by this section is the time and effort necessary 
to disclose documentation related to the onsite visit. However, we 
believe that these requirements are exempt from the PRA since they will 
be imposed under the conditions defined in 5 CFR 1320.4 and meet the 
exception(s) to the definition of information as set forth in 5 CFR 
1320.3(h)(3), (h)(6), and (h)(9) and as such does not meet the 
definition of an information collection.
    Section 410.142(g) states that an accreditation organization that 
has received HCFA's notice of denial of its request for HCFA approval 
and recognition of its accreditation program to accredit entities to 
furnish outpatient diabetes self-management training services may 
request reconsideration of HCFA's decision in accordance with part 488 
subpart D of this chapter.
    We believe that this ICR is exempt in accordance with 5 CFR 
1320.4(a)(2) since this requirement is the result of an administrative 
action, investigation, or audit against specific individuals or 
entities.
    Section 410.142(h) states that an organization that has received 
HCFA's notice of denial of its request for accreditation may submit a 
new request to HCFA if it meets the conditions in this section.
    We anticipate that these requirements will be imposed on less then 
10 persons on an annual basis, and, therefore, are not subject to the 
PRA as defined in 5 CFR 1320.3(c).
    Section 410.142(j) states that at least 6 months before the 
expiration of HCFA's approval and recognition of the accreditation 
organization's program, an accreditation organization must request from 
HCFA continued approval and recognition.
    The burden associated with this requirement is the time and effort 
necessary for an organization to submit to HCFA a request for 
reapproval. The burden associated with this requirement is captured in 
Sec. 410.142(b).

Section 410.143  Requirements for Approved Accreditation Organizations

    Section 410.143(a)(1) states that an accreditation organization 
approved by HCFA must provide to HCFA in a written form and on a 
monthly basis all of the ICRs set forth in Sec. 410.143(a)(1)(i) 
through (a)(1)(iv).
    The burden associated with these requirements is the time and 
effort for an accreditation organization to comply with the 
requirements of this section. It is estimated that it will take each 
organization 4 hours to complete these requirements. There are 
approximately 5 respondents for a total of 20 annual hours.
    Section 410.143(a)(2) states that within 30 days of a change in the 
HCFA standards, submit to HCFA its organization's plan to alter its 
standards to conform to the revised HCFA

[[Page 6844]]

standards (including a crosswalk between the revised HCFA standards and 
the organization's revised standards) within the timeframes for 
adopting the revised HCFA standards specified in the notification of 
change it receives from HCFA.
    The burden associated with these requirements are the time and 
effort for an organization to submit its organization's plan. It is 
estimated that it will take each organization 10 hours to comply with 
these requirements. There are approximately 5 respondents for a total 
of 50 hours.
    Section 410.143(b) states that HCFA (or its agent(s)) may perform 
oversight activities such equivalency reviews, validation reviews, and 
onsite inspections ensure that an approved accreditation organization 
and the entities the accreditation organization accredits continue to 
meet the quality standards described in Sec. 410.144. In addition, an 
accreditation organization that is dissatisfied with a determination to 
withdraw HCFA approval and recognition may request a reconsideration of 
HCFA's decision in accordance with part 488 subpart D of this chapter.
    The burden imposed by this section is the time and effort necessary 
to disclose documentation under the reviews and inspections.
    However, we believe that these requirements are exempt from the PRA 
since they will be imposed under the conditions defined in 5 CFR 1320.4 
and meet the exception(s) to the definition of information as set forth 
in 5 CFR 1320.3(h)(3), (h)(6), and (h)(9) and as such does not meet the 
definition of an information collection.

Section 410.144  Quality Standards for a Deemed Entity

    Section 410.144(a)(1)(ii) and (iii) states that a deemed entity 
document the organizational relationships, lines of authority, 
staffing, job descriptions, and operational policies. In addition, it 
must maintain a written policy that affirms education as an integral 
component of diabetes care.
    The burden associated with this requirement is the time and effort 
for an entity to document and maintain the information described above. 
It is estimated these requirements will take each entity 8 hours. There 
are approximately 750 entities for a total annual burden of 6,000 
hours.
    Section 410.144(a)(7) states that an entity must review each 
beneficiary's plan of care, develop, and update an individual 
assessment in collaboration with each beneficiary, and document the 
results, including assessment, intervention, evaluation, and follow-up 
in the beneficiary's permanent medical record.
    The burden associated with this requirement is captured in 
Sec. 410.141(b) above.
    Section 410.144(a)(9) states that an entity must establish and 
maintain a performance measurement and quality improvement program that 
meets the requirements of this section. In addition, if requested, an 
entity must report to HCFA nationally standardized performance measures 
to the extent that they become available in the future and the 
Secretary determines they are appropriate.
    While the requirements to maintain documentation and the reporting 
of nationally standardized performance measures are subject to the PRA, 
the requirements to disclose information to HCFA upon request are not 
subject to the PRA in accordance with 5 CFR 1320.4(a)(2), since the 
disclosure of information to or for a Federal agency during the conduct 
of an administrative action, investigation, or audit involving an 
agency against specific individuals or entities is exempt from the PRA.
    Therefore, the burden associated with this section, that is subject 
to the PRA, is the time and effort necessary for an entity to maintain 
documentation related to the performance measurement and quality 
improvement program and the reporting of nationally standardized 
performance measures. It is estimated that the recordkeeping 
requirements will take each entity 3 hours on an annual basis since 
there are approximately 750 entities for a total annual burden of 2,250 
hours. Since HCFA is not currently requiring entities to report 
nationally standardized performance measures, we are not assigning any 
burden to this requirement. When HCFA does mandate the requirement to 
report these performance measures, the burden associated with this 
requirement will be adjusted accordingly.
    Section 410.144(a)(10) states that each deemed entity must have an 
agreement with a PRO, which has a contract with HCFA to perform quality 
assurance reviews. At a minimum, the agreement must allow the PRO 
access to beneficiary or group therapy records, and binds an approved 
entity to comply with corrective actions or to participate in quality 
improvement projects that the PRO determines are necessary.
    The burden associated with this requirement is the time and effort 
necessary to maintain the necessary documentation to demonstrate that 
the deemed entity has entered into a written agreement with a PRO that 
meet the requirements of this section.
    We estimate that it will take 750 entities 5 minutes on an annual 
basis to maintain the necessary documentation for an overall annual 
burden of 63 hours.

Section 410.145  Requirements for Deemed Entities

    Section 410.145(a)(10) states that an entity may be deemed to meet 
the HCFA quality standards described in Sec. 410.144 if the entity has 
submitted necessary documentation and is fully accredited (and 
periodically reaccredited) by a national accreditation organization 
approved by HCFA. The burden associated with meeting these requirements 
is captured in Sec. 410.141(e)(3).
    Section 410.145(c) states that an entity may be deemed to meet the 
HCFA quality standards described in Sec. 410.144(a) if the entity--(1) 
forwards a copy of its certificate from its accreditation organization 
indicating that the entity meets the HCFA quality standards described 
in Sec. 410.144(a) before submitting a claim for Medicare payment; (2) 
agrees in writing to submit to evaluation (including onsite 
inspections) by HCFA (or its agent) to validate its accreditation 
organization's accreditation process; and (3) authorizes in writing for 
its accreditation organization to release to HCFA a copy of its most 
recent accreditation evaluation, and any accreditation-related 
information that HCFA may require.
    The burden associated with these requirements is the time and 
effort for an entity to submit a copy of its certificate, along with 
its agreement, and authorization.
    It is estimated that it will take each entity 5 minutes to comply 
with these requirements. There are approximately 750 respondents for a 
total of 63 hours.

Section 414.62  Payment for Outpatient Diabetes Self-Management 
Training Services

    Section 414.62(c) states that beneficiary participation in training 
sessions must be documented on attendance sheets.
    While this ICR is subject to the PRA, we have not accounted for the 
burden of this ICR because we believe the burden associated with this 
ICR is exempt in accordance with 5 CFR 1320.3(b)(2) because the time, 
effort, and financial resources necessary to comply with these 
requirements would be incurred by persons in the normal course of their 
activities. We solicit comment on our preliminary conclusion

[[Page 6845]]

that this activity would be done in the normal course of business and, 
thus, would have no burden for providers.
    We have submitted a copy of this proposed rule to OMB for its 
review of the information collection requirements described above. 
These requirements are not effective until they have been approved by 
OMB.
    If you comment on any of these information collection and record 
keeping requirements, please mail copies directly to the following:

Health Care Financing Administration, Office of Information Services, 
Security and Standards Group, Division of HCFA Enterprise Standards, 
Room N2-14-26, 7500 Security Boulevard, Baltimore, MD 21244-1850, Attn: 
Louis Blank, HCFA-3002-P
        and
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Allison Eydt, HCFA Desk Officer.

V. Regulatory Impact Analysis

A. Background

    We have examined the impacts of this proposed rule as required by 
Executive Order 12866, the Unfunded Mandates Act of 1995, and the 
Regulatory Flexibility Act (RFA) (Public Law 96-354). Executive Order 
12866 directs agencies to assess all costs and benefits of available 
regulatory alternatives and, when 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 annually). The statutory provision that this rule 
further implements would cause this to be a major rule because we have 
estimated that the annual costs associated with this rule would be 
significantly higher than $100 million beginning in 1999.
    Section 1102(b) of the Social Security Act (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 and has fewer than 50 beds.
    The Unfunded Mandates Reform Act of 1995 also requires (in section 
202) that agencies prepare an assessment of anticipated costs and 
benefits before proposing any rule that may mandate an annual 
expenditure by State, local, or tribal governments, in the aggregate, 
or by the private sector, of $100 million or more. We believe that this 
proposed rule would not mandate such expenditures.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and governmental agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $5 
million or less annually. States and tribal governments are not 
considered to be small entities. This rule provides additional benefit 
payments to providers for offering classes on diabetes self-management. 
Therefore, there are no regulatory burden issues affecting small 
entities to be considered with respect to these benefit payments. In 
section C. of the RIA that discusses the accreditation approval 
process, we acknowledge that some small entities may face a regulatory 
burden in obtaining accreditation. We discuss proposed measures that we 
believe will lessen the regulatory burden on these entities.
    This proposed rule sets forth an expanded benefit for Medicare 
beneficiaries with diabetes who meet the criteria for self-management 
training services. It also identifies who may be an approved entity 
that may furnish these services, and lists the quality standards that 
must be met by these approved entities. This regulation would primarily 
affect beneficiaries with diabetes and certain health care 
professionals, such as physicians, nurses, physician-directed clinics, 
and hospital outpatient departments.
    We estimate that there are 4.5 million Medicare beneficiaries with 
diabetes (approximately 4 million aged beneficiaries and .5 million 
disabled beneficiaries). Of this total, we estimate that about half, or 
2.25 million beneficiaries, would receive diabetes self-management 
training services. This estimate assumes that the remaining 2.25 
million Medicare beneficiaries either have already received the 
training or do not currently meet the conditions of coverage. These 
beneficiaries may meet the conditions of coverage at a later date, if 
their medical condition changes.

B. Diabetes Costs and Benefits

    After consultation with the industry, we believe it is reasonable 
to cover up to 10 hours of initial diabetes self-management training 
within a continuous 12-month period and up to 1 hour of additional 
training annually (after the initial training) for each beneficiary 
that meets the conditions of coverage. We estimate that there would 
actually be 10 1-hour sessions billed in the first year and possibly 
one follow-up session (up to 1 hour) billed each year thereafter, if 
the beneficiary qualifies for the follow-up session. We have assumed 
that most beneficiaries with diabetes that currently qualify would have 
the training in the first few years of coverage. This accounts for the 
large influx of spending in the first few years. The outyear estimates 
assume that a limited number of beneficiaries with new diabetes 
diagnoses would receive the full training benefit, and that others 
would receive refresher courses if ordered by their physician. In 
addition, we have assumed that there would be newly diagnosed 
beneficiaries with diabetes each year that would receive up to 10 hours 
of initial diabetes self-management training, but they represent a 
smaller number of diabetics.
    The following table displays the budgetary cost of the outpatient 
diabetes self-management training program to the Medicare program.

                                     Projected Budget Impact of New Benefit
                                                 [$ in millions]
----------------------------------------------------------------------------------------------------------------
       FY 1998                FY 1999                FY 2000                FY 2001                FY 2002
----------------------------------------------------------------------------------------------------------------
$40..................               $390                   $320                   $180                    $80
----------------------------------------------------------------------------------------------------------------

    These costs are considerable, especially in the first few years, 
but we also expect substantial benefits. When someone has diabetes, his 
or her body has trouble making or using insulin, a hormone produced by 
the pancreas.

[[Page 6846]]

Insulin enables the body's tissues to use glucose, a sugar that 
circulates in the bloodstream and that normally provides energy for the 
body's cells. Because a diabetic beneficiary cannot properly use 
glucose in the blood, blood sugar levels remain high, unless a person 
takes appropriate medication (such as insulin) or is able to reduce 
blood sugar levels through diet and exercise. The consequences of 
diabetes can be severe. It is the fourth leading cause of death by 
disease in the United States. Diabetes can also result in many other 
medical problems, including heart disease, stroke, kidney disease, loss 
of sensation and circulation in the legs, possibly leading to 
amputations, and blindness. Proper health care and self-management can 
help circumvent these problems or slow their onset. There are two 
critical questions that go to the heart of diabetes self-management 
training. First, when should the person receive the training? Second, 
how much training should the person receive? Initial training may bring 
about short term behavioral changes. Some experts, however, express 
concern about the difficulty people with diabetes have in maintaining 
behavior changes unless they get additional education and support as a 
follow-up to the initial training. To assure that our beneficiaries 
receive the amount of training and support we believe they need to 
maintain good health or improve their existing health status, we would 
provide, when medically necessary, refresher training in a subsequent 
year following the initial training. We believe that these actions 
would have a positive result on the Medicare program, and we plan to 
monitor specific outcome measures to assure that only quality programs 
are reimbursed by the Medicare program.
    There is a possibility of delays in enrolling newly approved 
entities because of the accreditation process. However, existing 
outpatient diabetes self-management programs would continue to be paid 
as they are now. The estimates assume that roughly 70 percent of 
beneficiaries would be able to receive the self-management training 
from currently approved entities. Also, the estimates do not reflect 
payments for beneficiaries who are inpatients in facilities such as 
hospitals or nursing homes. Finally, we assume that the number of 
beneficiaries with diabetes grows in the same manner as total Part B 
enrollment. This results in increasing the number of beneficiaries with 
diabetes by about 40,000 per year.

C. Accreditation Process

    Section 1865 of the Act requires us to determine whether the 
accreditation of a provider or supplier entity by a national 
accreditation organization provides assurances that the applicable 
Medicare health and safety conditions or requirements are met.
    The BBA '97 authorized the Secretary to develop her own quality 
standards. We have condensed the standards originally established by 
the NDAB and recognized by the ADA, and we believe that our proposed 
standards offer sufficient assurances that the outpatient diabetes 
self-management training programs would provide quality care and the 
standards are flexible enough to apply in any health care setting.
    The ADA Education Recognition Program is a national voluntary 
process that identifies diabetes self-management training programs that 
meet National Standards for Diabetes Self-Management Education 
Programs. The ADA currently recognizes outpatient diabetes self-
management programs. To date, the ADA has given recognition to 
approximately 575 education programs. Under the conditions in this 
proposed rule, the ADA, along with any other national accreditation 
organization that wishes to be approved and recognized by HCFA, would 
be required to submit appropriate documentation requesting 
accreditation approval from us. Once we have determined that the 
organizations meet the HCFA requirements concerning frequency of 
accreditation, accreditation forms, and that they use guidelines and 
instructions to evaluators that are as rigorous as our requirements 
with a similar emphasis on outcomes, they may then be approved and 
recognized as national accreditation organizations.
    We fully expect that the ADA will apply to HCFA as a national 
accreditation organization and be quickly approved to accredit 
entities. Our review of the ADA-recognized programs indicates that 
there is a minimum of at least one program in each State and the 
District of Columbia. These programs are located in both small rural 
hospitals as well as large urban hospitals. While the majority of these 
programs are hospital-based, there are some that are clinics and one in 
Arizona that is an insurance plan. Thus, we believe that the geographic 
distribution of recognized programs is such that Medicare beneficiaries 
would be able to receive training without a delay of the benefit.
    We recognize that some small entities such as rural physicians and 
qualified nonphysician practitioners may find the 12-month collection 
of data and the start-up fees required by the ADA to be a burden to 
their practices. The approximate cost for an entity to get accredited, 
based on current ADA figures, is $682.50, which includes an $82.50 
application fee and a $600 initial accreditation fee. The subsequent 
triennial fee is $500. Additional items, such as recordkeeping costs 
and other overhead costs, have not been factored into the cost of 
becoming an approved entity. We estimate that there will be a total of 
750 accredited entities when this rule is implemented and we estimate 
there are currently 575 entities that are ADA-certified and that 
already pay accreditation costs. The additional 175 entities would pay 
the $682.50, so the additional private sector cost would be 
$119,437.50.
    In addition, we acknowledge that some existing programs are 
currently accredited by their State or local agency and may now find it 
a burden to become accredited by a national organization. However, we 
expect that at least four other national accreditation organizations 
would apply to us for recognition and that these entities may find the 
quality standards of these organizations to be substantially equivalent 
to the existing State or local standards. The CDC has a cooperative 
agreement with the 50 States, all U.S. territories, and the District of 
Columbia. This agreement provides funding to these geographic entities, 
which they currently use to perform a variety of diabetes-related 
activities. Ten of the 50 States use a portion of their funds to 
administer their State diabetes self-management training accreditation 
programs. Under this proposed rule, there will be no loss of revenue 
from this cooperative agreement for any of these geographic entities. 
Those States that currently use their funds from the cooperative 
agreement to administer their State diabetes self-management training 
programs can either choose to become an organization or choose instead 
to fund other diabetes-related activities, including the development of 
educational programs for the use of approved entities that desire to 
obtain national accreditation in order to qualify for Medicare payment 
under this benefit.
    One way we are trying to lessen the burden on rural and small 
entities is by postponement of the requirement for the CDE to be part 
of the diabetes self-management team. This proposed rule requires that 
nonphysician diabetes educators complete 14 hours of approved diabetes-
related continuing education every two years. The approximate cost of 
obtaining these

[[Page 6847]]

credits is $300. (This estimate is based on diabetes-related training 
information that we received from the American Association of Diabetes 
Educators.) We believe that existing programs would have approximately 
3\1/2\ years from the publication of this proposed rule to provide 
outpatient diabetes self-management training while preparing to meet 
the HCFA standard concerning the CDE.
    We estimate that there would be 750 approved entities when this 
final rule is fully implemented. Each approved entity would need a CDE. 
The initial certification of a CDE costs $250 and another $250 every 5 
years to maintain certification. It would cost approximately $37,500 
(750  x  $250  5) per year for CDE certification at the rate of 
one CDE per approved entity. The continuing education requirement for a 
CDE associated with this proposed rule would cost approximately $300 
every 2 years. The estimated total cost for continuing education for 
all CDEs would be $112,500 (750  x  $300  2) per year at the 
rate of one CDE per approved entity. The estimated total cost for 
combined certification and continuing education for all CDEs would be 
approximately $150,000 per year.

D. Conclusions

    We anticipate that this proposed rule would improve health of 
Medicare beneficiaries with diabetes by providing them with the skills 
and knowledge necessary to effectively manage their diabetic condition. 
We recognize that there may be some burden on existing and new entities 
because of the requirement that they must be accredited by a national 
accreditation body. However, we must ensure that Medicare pays only for 
those programs that are of the highest quality. We believe that the 
overall burden to these entities is worth the benefit that will be 
gained to both the Medicare beneficiary and the program.
    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 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Rural areas, X-rays.

42 CFR Part 414

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements, Rural areas, X-rays.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare.

42 CFR Part 476

    Health care, Health professional, Health record, Peer Review 
Organizations (PRO), Penalties, Privacy, Reporting and recordkeeping 
requirements.

42 CFR Part 498

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare.

    For the reasons set forth in the preamble, 42 CFR Chapter IV would 
be amended as set forth below:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

    A. Part 410 would be amended as follows:
    1. The authority citation for part 410 continues to read as 
follows:

    Authority: Sections 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh), unless otherwise indicated.

    2. Section 410.1, paragraph (a) is revised to read as follows:


Sec. 410.1  Basis and scope.

    (a) Statutory basis. This part is based on the indicated provisions 
of the following sections of the Act:
    1832--Scope of benefits furnished under the Medicare Part B 
supplementary medical insurance (SMI) program.
    1833 through 1835 and 1862--Amounts of payment for SMI services, 
the conditions for payment, and the exclusions from coverage.
    1861--Definition of the kinds of services that may be covered.
    1865(b)--Permission for HCFA to approve and recognize a national 
accreditation organization and its accreditation program for 
accrediting an entity to furnish outpatient diabetes self-management 
services.
    1881--Medicare coverage for end-stage renal disease beneficiaries.
* * * * *
    3. New subpart H, consisting of Secs. 410.140 through 410.145, is 
added to read as follows:

Subpart H--Outpatient Diabetes Self-Management Training Services

Sec.
410.140  Definitions.
410.141  Outpatient diabetes self-management training.
410.142  HCFA process for approving national accreditation 
organizations.
410.143  Requirements for approved accreditation organizations.
410.144  Quality standards for a deemed entity.
410.145  Requirements for deemed entities.

Subpart H--Outpatient Diabetes Self-Management Training Services


Sec. 410.140  Definitions.

    For purposes of this subpart, the following definitions apply:
    Approved entity means an individual, physician, or entity 
accredited by an approved organization to furnish training and approved 
by HCFA to furnish and receive Medicare payment for the training.
    Deemed entity means an individual, physician, or entity accredited 
by an approved organization, but that has not yet been approved by HCFA 
to furnish and receive Medicare payment for the training. Upon being 
approved by HCFA to receive Medicare payment for training, HCFA refers 
to this entity as an ``approved entity.''
    Organization means a national accreditation organization.
    Training means outpatient diabetes self-management training.


Sec. 410.141  Outpatient diabetes self-management training.

    (a) General rule. Medicare Part B covers training defined in 
Sec. 410.140 ordered by a physician or qualified nonphysician 
practitioner (as these terms are defined in Sec. 410.32) for a 
beneficiary with a diabetic condition to ensure therapy compliance or 
to provide the beneficiary with necessary skills and knowledge to 
manage the beneficiary's condition.
    (b) Conditions for coverage. The training must meet the following 
conditions:
    (1) Following an evaluation of the beneficiary's need for the 
training, it is ordered by the physician or qualified nonphysician 
practitioner treating the beneficiary's diabetes.
    (2) It is included in a comprehensive plan of care (established by 
the physician or qualified nonphysician practitioner treating the 
beneficiary for diabetes) that meets the following requirements:
    (i) Describes the content, number, frequency, and duration of the 
training as written by the physician or qualified nonphysician 
practitioner treating the beneficiary.
    (ii) Contains a statement specified by HCFA and signed by the 
physician or qualified nonphysician practitioner managing the 
beneficiary's diabetic condition. By signing this statement, the 
physician or qualified nonphysician practitioner certifies that he or 
she is managing the beneficiary's diabetic condition and the training 
described in

[[Page 6848]]

the plan of care are needed to ensure therapy compliance or to provide 
the beneficiary with the skills and knowledge to help manage the 
beneficiary's diabetes. The physician's or qualified nonphysician 
practitioner's statement must identify the beneficiary's specific 
medical conditions (described in paragraph (d)(1) of this section) that 
the training would address.
    (iii) Provides that any changes to the plan of care are signed by 
the physician or qualified nonphysician practitioner treating the 
beneficiary.
    (iv) Is incorporated into the approved entity's permanent medical 
record for the beneficiary and is made available, upon request, to 
HCFA.
    (3) It is reasonable and necessary for treating or monitoring the 
condition of a beneficiary who meets the conditions described in 
paragraph (d) of this section.
    (4) Except as permitted in paragraph (c)(3) of this section, it is 
furnished in a group setting consisting of 2 to 20 individuals who need 
not all be Medicare beneficiaries.
    (c) Types and frequency of training--(1) Initial training. Medicare 
Part B covers up to 10 hours of initial training within a continuous 
12-month period for each beneficiary that meets the conditions in 
paragraph (d) of this section.
    (2) Additional training. After receiving the initial training 
described in paragraph (c)(1) of this section, Medicare covers a single 
follow-up training session lasting no more than 1 hour for a 
beneficiary each year. The physician or qualified nonphysician 
practitioner treating the beneficiary must document in the 
beneficiary's medical record the specific medical condition (described 
in paragraph (d)(1) of this section) that the additional training must 
address.
    (3) Exception. Medicare covers up to 10 hours of training on an 
individual basis for a Medicare beneficiary who meets any of the 
following conditions:
    (i) No group session is available within 2 months of the date the 
training is ordered.
    (ii) The beneficiary's physician or qualified nonphysician 
practitioner documents in the beneficiary's medical record that the 
beneficiary has special needs resulting from conditions, such as severe 
vision, hearing, or language limitations that would hinder effective 
participation in a group training session.
    (d) Beneficiaries who may be covered. Medicare Part B covers 
initial training services for a beneficiary who meets the following 
conditions:
    (1) Medical conditions. A beneficiary has one of the following 
medical conditions occurring within the 12-month period before the 
physician's order for the training:
    (i) New onset diabetes.
    (ii) Poor glycemic control as evidenced by a glycosylated 
hemoglobin (HbA1C) level of 9.5 or more in the 90 days before attending 
the training.
    (iii) A change in treatment regimen from no diabetes medications to 
any diabetes medication, or from oral diabetes medication to insulin.
    (iv) High risk for complications based on poor glycemic control 
(documented acute episodes of severe hypoglycemia or acute severe 
hyperglycemia occurring in the past year during which the beneficiary 
needed third party assistance for either emergency room visits or 
hospitalization).
    (v) High risk based on at least one of the following documented 
complications:
    (A) Lack of feeling in the foot or other foot complications such as 
foot ulcer or amputation.
    (B) Pre-proliferative or proliferative retinopathy or prior laser 
treatment of the eye.
    (C) Kidney complications related to diabetes, such as 
macroalbuminuria or elevated creatinine.
    (2) Other conditions. The beneficiary--
    (i) Has not received initial training; or
    (ii) Is not receiving services as an inpatient in a hospital, SNF, 
hospice, or nursing home.
    (iii) Is not receiving services as an outpatient in an RHC or FQHC.
    (e) Who may furnish services. Services may be furnished by a 
physician, individual, or entity that meets the following conditions:
    (1) In addition to furnishing diabetes training services described 
in Sec. 410.141, furnishes other services for which direct Medicare 
payment may be made.
    (2) May properly receive Medicare payment under Sec. 424.73 or 
Sec. 424.80 of this chapter, which set forth prohibitions on assignment 
and reassignment of benefits.
    (3) Submits necessary documentation to, and is accredited by, an 
accreditation organization approved by HCFA under Sec. 410.142 to meet 
one of the sets of quality standards described in Sec. 410.144.
    (4) Provides documentation to HCFA, as requested.


Sec. 410.142  HCFA process for approving national accreditation 
organizations.

    (a) General rule. HCFA may approve and recognize an organization 
that is either a nonprofit or not-for-profit organization with 
demonstrated experience in representing the interest of individuals 
with diabetes to accredit entities to furnish training services.
    (b) Required information and materials. An organization requesting 
HCFA's approval and recognition of its accreditation program must 
furnish to HCFA the following information and materials:
    (1) The standards that the organization uses to accredit entities 
to furnish training services.
    (2) A detailed comparison (including a crosswalk if the 
organization does not use standards described in Sec. 410.144 in their 
entirety) between the organization's accreditation requirements and 
standards and the HCFA standards described in Sec. 410.144(a).
    (3) Detailed information about the organization's accreditation 
process, including all of the following information:
    (i) Frequency of accreditation.
    (ii) Copies of accreditation forms, guidelines, and instructions to 
evaluators.
    (iii) Descriptions of the following:
    (A) The accreditation review process and the accreditation status 
decision making process.
    (B) The procedures used to notify an entity of deficiencies in its 
outpatient diabetes self-management training program and procedures to 
monitor the correction of those deficiencies.
    (C) The procedures used to enforce compliance with accreditation 
requirements.
    (4) Detailed information about the individuals who perform 
evaluations for the organization, including all of the following 
information:
    (i) The education and experience requirements for the individuals 
who perform evaluations.
    (ii) The content and frequency of continuing education furnished to 
the individuals who perform evaluations.
    (iii) The process used to monitor the performance of individuals 
who perform evaluations.
    (iv) The organization's policies and practices with respect to the 
participation, in the accreditation process, by an individual who is 
professionally or financially affiliated with the entity being 
evaluated.
    (5) A description of the organization's data management and 
analysis system with respect to its accreditation activities and 
decisions, including the kinds of reports, tables, and other displays 
generated by that system.
    (6) A description of the organization's procedures for responding 
to and investigating complaints against a

[[Page 6849]]

deemed entity, including policies and procedures regarding coordination 
of these activities with appropriate licensing bodies, ombudsmen 
programs, and HCFA.
    (7) A description of the organization's policies and procedures 
with respect to the withholding or removal of accreditation for failure 
to meet the organization's standards or requirements, and other actions 
the organization takes in response to noncompliance with its standards 
and requirements.
    (8) A description of all types (for example, full or partial) and 
categories (for example, provisional, conditional, or temporary) of 
accreditation offered by the organization, the duration of each type 
and category of accreditation and a statement identifying the types and 
categories that would serve as a basis for accreditation if HCFA 
approves the organization.
    (9) A list of all entities currently accredited to furnish training 
and the type, category, and expiration date of the accreditation held 
by each of them.
    (10) The name and address of each person with an ownership or 
control interest in the organization.
    (11) Documentation that demonstrates its ability to furnish HCFA 
with electronic data in HCFA-compatible format.
    (12) A resource analysis that demonstrates that its staffing, 
funding, and other resources are adequate to perform the required 
accreditation activities.
    (13) A statement acknowledging that, as a condition for approval 
and recognition by HCFA of its accreditation program, it agrees to 
comply with the requirements set forth in Secs. 410.142 through 
410.144.
    (14) Additional information HCFA requests to enable it to respond 
to the organization's request for HCFA approval and recognition of its 
accreditation program to accredit entities to furnish training 
services.
    (c) Onsite visit. HCFA may visit the prospective organization's 
offices to verify information in the organization's application, 
including, but not limited to, review of documents, and interviews with 
the organization's staff.
    (d) Notice and comment--(1) Proposed notice. HCFA publishes a 
proposed notice in the Federal Register announcing its intention to 
approve an organization's request for HCFA approval and recognition of 
its accreditation program and the standards it uses to accredit 
entities to furnish training services. The notice includes the 
following information:
    (i) The basis for approving the organization.
    (ii) A description of how the organization's accreditation program 
applies and enforces quality standards that have been determined by 
HCFA to be substantially equivalent to the quality standards for 
training services described in Sec. 410.144.
    (iii) An opportunity for public comment.
    (2) Final notice. (i) After considering public comments, HCFA 
publishes a final notice in the Federal Register indicating whether it 
has approved an organization's request for HCFA approval and 
recognition of its accreditation program and the standards it uses to 
accredit entities to furnish training services.
    (ii) If HCFA approves the request, the final notice specifies the 
effective date and the term of the approval, which may not exceed 6 
years.
    (e) Criteria HCFA uses to approve national accreditation 
organizations. In deciding to approve and recognize an organization's 
accreditation program to accredit entities to furnish training 
services, HCFA considers the following criteria:
    (1) The organization applies and enforces quality standards that 
have been determined by HCFA to be substantially equivalent to the 
quality standards described in Sec. 410.144.
    (2) The organization meets the requirements for approved 
organizations in Sec. 410.143.
    (3) The organization is not owned or controlled by the entities it 
accredits, as defined in Sec. 413.17(b)(2) or (b)(3), respectively, of 
this chapter.
    (4) The organization does not accredit any entity it owns or 
controls.
    (f) Notice of HCFA's decision. HCFA notifies the prospective 
organization in writing of its decision. The notice includes the 
following information:
    (1) Statement of approval or denial.
    (2) Rationale for denial.
    (3) Reconsideration and reapplication procedures.
    (g) Reconsideration of adverse decision. An organization that has 
received HCFA's notice of denial of its request for HCFA approval and 
recognition of its accreditation program to accredit entities to 
furnish training services may request reconsideration of HCFA's 
decision in accordance with part 488 subpart D of this chapter.
    (h) Request for approval following denial. (1) Except as provided 
in paragraph (h)(2) of this section, an organization that has received 
HCFA's notice of denial of its request for HCFA approval and 
recognition of its accreditation program to accredit entities to 
furnish training services may submit a new request to HCFA if it meets 
the following conditions:
    (i) Has revised its accreditation program to correct the 
deficiencies HCFA noted in its denial notice.
    (ii) Demonstrates, through documentation, that the quality 
standards used by the deemed entities are substantially equivalent to 
the HCFA quality standards for training services described in 
Sec. 410.144(a).
    (iii) Resubmits the application in its entirety.
    (2) An organization that has requested reconsideration of HCFA's 
denial of its request for HCFA approval and recognition of its 
accreditation program to accredit entities to furnish training services 
may not submit a new request until all administrative proceedings have 
been completed.
    (i) Withdrawal. An organization requesting HCFA approval and 
recognition of its accreditation program to accredit entities may 
withdraw its application at any time.
    (j) Reapplying for accreditation. At least 6 months before the 
expiration of HCFA's approval and recognition of the organization's 
program, an organization must request from HCFA continued approval and 
recognition.


Sec. 410.143  Requirements for approved accreditation organizations.

    (a) Ongoing responsibilities of an approved accreditation 
organization. An organization approved and recognized by HCFA must 
undertake the following activities on an ongoing basis:
    (1) Provide to HCFA in writing and on a monthly basis all of the 
following:
    (i) Copies of all accreditation decisions and any accreditation-
related information that HCFA may require (including corrective action 
plans and summaries of unmet HCFA standards).
    (ii) Notice of all complaints related to accredited entities.
    (iii) Within 30 days of taking remedial or adverse action 
(including revocation, withdrawal, or revision of an entity's deemed 
status) against a deemed entity, information describing the remedial or 
adverse action and the circumstances that led to taking the action.
    (iv) Notice of any proposed changes in its accreditation standards 
and requirements or evaluation process. If an organization implements 
changes without HCFA approval, HCFA may withdraw its approval and 
recognition of the organization's accreditation program.
    (2) Within 30 days of notification of a change in the HCFA quality 
standards, submit to HCFA its organization's plan to alter its quality 
standards to conform

[[Page 6850]]

to the revised HCFA standards (including a crosswalk between the 
revised HCFA standards and the organization's revised standards) by the 
effective date specified in HCFA's notification of the change in HCFA's 
quality standards.
    (b) HCFA oversight of approved national accreditation 
organizations. HCFA performs oversight activities to ensure that an 
approved organization and the entities the organization accredits 
continue to meet the quality standards described in Sec. 410.144. HCFA 
may contract with an entity to perform these oversight activities. HCFA 
(or its agent) uses the following procedures:
    (1) Equivalency review. HCFA compares the organization's standards 
and its application and enforcement of its standards to the comparable 
HCFA standards (described in Sec. 410.144(a)) and processes when any of 
the following conditions exist:
    (i) HCFA imposes new requirements or changes its process for 
approving and recognizing organizations.
    (ii) The organization proposes to adopt new standards or changes 
its accreditation process.
    (iii) The organization reapplies to HCFA for continuation of its 
approval and recognition by HCFA of its program to accredit entities to 
furnish training services.
    (2) Validation reviews. HCFA validates the organization's 
accreditation process by conducting evaluations of deemed entities 
accredited by the organization and comparing its results to the results 
of the organization's evaluation of the deemed entities.
    (3) Onsite inspections. HCFA may conduct an onsite inspection of 
the organization's operations and offices to verify information and 
assess the organization's compliance with its own policies and 
procedures. The onsite inspection may include, but is not limited to, 
reviewing documents, auditing meetings concerning the accreditation 
process, evaluating accreditation results or the accreditation status 
decision making process, and interviewing the organization's staff.
    (4) Withdrawal of HCFA approval and recognition--(i) HCFA decision 
to withdraw. HCFA gives the organization written notice of HCFA's 
intent to withdraw its approval and recognition of the organization's 
program to accredit entities if HCFA determines through an equivalency 
review, validation review, onsite inspection, or HCFA's daily 
experience with the organization that any of the following conditions 
exist:
    (A) The quality standards that the organization applies and 
enforces are not substantially equivalent to HCFA's quality standards 
described in Sec. 410.144(a).
    (B) The organization has failed to meet the requirements for 
accreditation in Secs. 410.142 through 410.144.
    (ii) Request for reconsideration. An organization may request a 
reconsideration of HCFA's decision to withdraw its approval and 
recognition of the organization in accordance with part 488 subpart D 
of this chapter.


Sec. 410.144  Quality standards for a deemed entity.

    An organization approved and recognized by HCFA may accredit an 
entity to meet one of the following sets of standards:
    (a) HCFA standards. Standards prescribed by HCFA, which include the 
following:
    (1) Organizational structure. (i) Provides the educational 
resources to support the programs offered and the beneficiaries served, 
including adequate space, personnel, budget, instructional materials, 
confidentiality, privacy, and operational support.
    (ii) Defines clearly and documents the organizational 
relationships, lines of authority, staffing, job descriptions, and 
operational policies.
    (iii) Maintains a written policy that affirms education as an 
integral component of diabetes care.
    (iv) Assesses the service area to define the target population in 
order to appropriately allocate personnel and resources.
    (2) Environment. Maintains a safe and sanitary environment, 
properly constructed, equipped, and maintained to protect the health 
and safety of all patients and that meets all applicable fire 
protection and life safety codes.
    (3) Program staff. (i) Requires a program coordinator who is 
responsible for program planning, implementation, and evaluation.
    (ii) Requires nonphysician professional staff to obtain 14 hours of 
continuing education about diabetes, educational principles, and 
behavior change strategies every 2 years.
    (4) Team approach. Furnishes services using a multidisciplinary 
instructional staff who are qualified to teach the training content 
areas required in paragraph (a)(5) of this section.
    (i) General rule. The team must include at least a registered 
dietitian and a Certified Diabetic Educator (CDE) who have recent 
didactic and experiential preparation in diabetes clinical and 
educational issues.
    (ii) Delayed effective date for a CDE. If the team includes a 
registered nurse, an approved entity may delay implementation of the 
requirement for a CDE until [3 years after the effective date of the 
final rule].
    (5) Training content. Offers training and is capable of meeting the 
needs of its patients on the following subjects:
    (i) Diabetes overview/pathophysiology of diabetes.
    (ii) Nutrition.
    (iii) Exercise and activity.
    (iv) Diabetes medications (including skills related to the self-
administration of injectable drugs).
    (v) Self-monitoring and use of the results.
    (vi) Prevention, detection, and treatment of acute complications.
    (vii) Prevention, detection, and treatment of chronic 
complications.
    (viii) Foot, skin, and dental care.
    (ix) Behavior change strategies, goal-setting, risk factor 
reduction, and problem solving.
    (x) Preconception care, pregnancy, and gestational diabetes.
    (xi) Relationships among nutrition, exercise, medication, and blood 
glucose levels.
    (xii) Stress and psychosocial adjustment.
    (xiii) Family involvement and social support.
    (xiv) Benefits, risks, and management options for improving glucose 
control.
    (xv) Use of health care systems and community resources.
    (6) Training methods. (i) Offers individual and group instruction 
for effective training services.
    (ii) Uses instructional methods and materials that are appropriate 
for the target population, and participants being served.
    (7) Review of plan of care and goals. (i) Reviews each 
beneficiary's plan of care.
    (ii) Develops and updates an individual assessment, in 
collaboration with each beneficiary, that includes relevant medical 
history, present health status, health service or resource utilization, 
risk factors, diabetes knowledge and skills, cultural influences, 
health beliefs and attitudes, health behaviors and goals, support 
systems, barriers to learning, and socioeconomic factors. Based on the 
assessment, develops, in collaboration with each beneficiary, an 
individual education plan. Documents the results, including assessment, 
intervention, evaluation and follow-up in the beneficiary's permanent 
medical record.
    (8) Education intervention. Offers appropriate and timely 
educational intervention based on referral from the beneficiary's 
physician or nonphysician practitioner and based on periodic 
reassessments of health status,

[[Page 6851]]

knowledge, skills, attitudes, goals, and self-care behaviors.
    (9) Performance measurement and quality improvement. Establishes 
and maintains a performance measurement and quality improvement program 
that meets the following requirements:
    (i) Stresses health outcomes (for example, improved beneficiary 
diabetic control, beneficiary understanding, or beneficiary compliance) 
and provides for the collection, analysis, and reporting of data that 
permits measurement of performance outcomes, or other quality 
indicators, such as, monitoring for compliance, lost work or school 
days, metabolic control, or others.
    (ii) Requires an entity to take the following actions:
    (A) Evaluate itself on an annual basis as to its effectiveness in 
using these measures.
    (B) Improve its performance on at least one outcome or quality 
indicator each year.
    (C) If requested, report to HCFA nationally standardized 
performance measures to the extent that they become available in the 
future and the Secretary determines they are appropriate.
    (D) Meet minimum performance levels on performance measures 
described in this paragraph (a)(9) established by HCFA, which are based 
on national or local empirical experience and are prospectively 
announced to allow sufficient time for compliance.
    (10) Peer Review Organization review. Has an agreement with a PRO, 
which has a contract with HCFA to perform quality assurance reviews. At 
a minimum, the agreement allows the PRO access to beneficiary or group 
therapy records and binds an approved entity to comply with corrective 
actions or to participate in quality improvement projects that the PRO 
determines are necessary.
    (b) The National Standards for Diabetes Self-Management Education 
Programs. Each of the educational standards contained in the National 
Standards for Diabetes Self-Management Education Programs (NSDSMEP) as 
of (insert the date the final rule is published in the Federal 
Register) or any NSDSMEP standards subsequently approved by HCFA.
    (c) Standards of a national accreditation organization that 
represents individuals with diabetes. Standards that have been 
developed by an organization (and approved by HCFA) that is either a 
nonprofit or not-for-profit organization with demonstrated experience 
in representing the interest of individuals, including health care 
professionals and Medicare beneficiaries, with diabetes.


Sec. 410.145  Requirements for deemed entities.

    (a) General rule. An entity may be deemed to meet the HCFA quality 
standards described in Sec. 410.144 if the following conditions are 
met:
    (1) The entity has submitted necessary documentation and is fully 
accredited (and periodically reaccredited) by an organization approved 
by HCFA.
    (2) The entity is not accredited by an organization that owns or 
controls the entity.
    (b) Effective date of deemed status. The date on which an entity is 
deemed to meet the HCFA quality standards described in Sec. 410.144(a) 
is the later of one of the following dates:
    (1) The date HCFA approves and recognizes the organization to 
accredit entities to furnish training services.
    (2) The date the organization accredits the entity to meet one of 
the quality standards described in Sec. 410.144(a).
    (c) Requirements for deemed entities. An entity may be deemed to 
meet the HCFA quality standards described in Sec. 410.144(a) if the 
entity meets the following conditions:
    (1) Before submitting a claim for Medicare payment, forwards a copy 
of its certificate or proof of accreditation from an approved 
organization indicating that the entity meets the HCFA quality 
standards described in Sec. 410.144(a).
    (2) Agrees to submit to evaluation (including onsite inspections) 
by HCFA (or its agent) to validate its approved organization's 
accreditation process.
    (3) Authorizes its approved organization to release to HCFA a copy 
of its most recent accreditation evaluation, and any accreditation-
related information that HCFA may require.
    (d) Removal of deemed status. HCFA removes an entity's deemed 
status for any of the following reasons:
    (1) HCFA determines, on the basis of its own evaluation or the 
results of the accreditation evaluation, that the entity does not meet 
the HCFA quality standards for the training services described in 
Sec. 410.144.
    (2) Sixty days after HCFA withdraws its approval of the 
organization that deemed the entity to furnish training services.
    (3) The entity fails to meet the requirements of paragraph (c) of 
this section.
    B. Part 414 would be amended as follows:

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

    1. The authority citation for part 414 continues to read as 
follows:

    Authority: Sections 1102, 1871, and 1881(b)(1) of the Social 
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(1)).

    2. A new Sec. 414.63 is added to read as follows:


Sec. 414.63  Payment for outpatient diabetes self-management training 
services.

    (a) Payment under the physician fee schedule. Payment for 
outpatient diabetes self-management training services is made under the 
physician fee schedule in accordance with Secs. 414.1 through 414.48.
    (b) To whom payment may be made. Payment is made to an entity 
approved by HCFA to furnish outpatient diabetes self-management 
training services in accordance with Secs. 410.141 through 410.145.
    (c) Limitation on payment. Payment is made for training sessions 
actually attended by the beneficiary and documented on attendance 
sheets.
    C. Part 424 would be amended as follows:

PART 424--CONDITIONS FOR MEDICARE PAYMENT

    1. The authority citation for part 424 continues to read as 
follows:

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

    2. In Sec. 424.44, a new paragraph (d) is added to read as follows:


Sec. 424.44  Time limits for filing claims.

* * * * *
    (d) Outpatient diabetes self-management training. HCFA makes 
payment to an entity for the furnishing of outpatient diabetes self-
management training after HCFA approves the entity to furnish the 
services under part 410 subpart H of this chapter.
    D. Part 476 would be amended as follows:

PART 476--ACQUISITION, PROTECTION, AND DISCLOSURE OF PEER REVIEW 
INFORMATION

    1. The authority citation for part 476 continues to read as 
follows:

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

    2. In Sec. 476.111, new paragraph (d) is added to read as follows:

[[Page 6852]]

Sec. 476.111  PRO access to records and information of institutions and 
practitioners.

* * * * *
    (d) A PRO may reimburse for requested information at the rate of 
$.10 per page for photocopying plus first class postage. The 
photocopying amount includes the cost of labor, supplies, equipment, 
and overhead.
    E. Part 498 would be amended as follows:

PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT 
PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT 
AFFECT THE PARTICIPATION OF ICFS/MR AND CERTAIN NFS IN THE MEDICAID 
PROGRAM

    1. The authority citation for part 498 continues to read as 
follows:

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


Sec. 498.2  [Amended]

    2. In Sec. 498.2, the definition of supplier is amended to add the 
words ``an entity approved by HCFA to furnish outpatient diabetes self-
management training,'' following ``(OPO)''.

(Catalog of Federal Domestic Assistance Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)

    Dated: September 30, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

    Approved: November 23, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 99-3083 Filed 2-10-99; 8:45 am]
BILLING CODE 4120-01-P