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Statement of Need: Because the existing survey process continues to focus on structure and process measures, the discrepancy between a Congressional mandate for outcome-oriented care and the authority for measuring the actual performance capabilities of HHAs in patient care services remains a problem. It presents difficulties for both providers and surveyors in areas of survey/certification, medical review, developing data based performance standards for HHA management and monitoring, and implementing a continuous quality improvement system for outcomes of care. ^PRegulations containing the Medicare HHA conditions of participation must be revised in order to provide a regulatory basis for a patient-centered, outcome-oriented system of home health quality assurance. The implementation of such a system will enhance Medicare's ability to ensure that high-quality care is furnished to the patients of Medicare-certified home health agencies. The Social Security Act authorizes us to regulate this area and no improvements in the survey process can be made without underlying regulatory authority. ^PThe Health Care Financing Administration has already met with a variety of provider and consumer representatives to discuss the development of revised standards. Representatives of consumers, providers, and States participated in this effort. Additional consultations are ongoing.

Summary of the Legal Basis: Section 1861(o) of the Social Security Act (the Act) specifies certain requirements that a home health agency must meet to participate in the Medicare program. In particular section 1861(o)(6) provides that a home health agency must meet the conditions of participation specified in section 1891(a) of the Act and such other conditions of participation as the Secretary finds necessary in the interest of the health and safety of patients. Section 1891(a) of the Act establishes specific requirements for home health agencies in several areas, including patient rights, home health aide training and competency and compliance with applicable Federal, State and local laws. Under this authority, the Secretary has established in regulations at 42 CFR part 484, the requirements that a home health agency must meet to participate in Medicare. Regulations at 42 CFR 440.70(d) provide that home health agencies participating in the Medicaid program must also meet the Medicare conditions of participation.

Alternatives: Congress has mandated the implementation of an outcome-oriented quality assurance system for home health. Therefore, the Medicare home health agency conditions of participation must be revised to provide the basis for implementation of such a system. Because of this mandate, no alternatives to this action have been considered.

Anticipated Costs and Benefits: The primary benefit of this rule will be the implementation of a more effective, efficient, and patient-centered system of quality assurance for HHAs. We do not anticipate that the provisions of this final rule will have a substantial economic impact on most HHAs. In general, this rule will decrease the administrative burden related to compliance with detailed Federal requirements, thus reducing costs incurred by the typical HHA. However, in the few situations where the requirements result in some immediate costs to an HHA, we believe that the changes that the HHA will make produce real, though difficult to estimate, long-term economic benefits.

Risks: This rule will have the potential for reducing risks to patient health and safety. Failure to publish this final rule would jeopardize broad-based improvement in the quality of care furnished to home health patients.