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7 Medicare Conditions of Participation and Accreditation for Hospitals Michael G. H. McGeary Since the passage of Medicare legislation in 1965, Section 1861 of the Social Security Act has stated that hospitals participating in Medicare must meet certain requirements specified in the act and that the Secretary of the Department of Health, Education and Welfare (HEW) [now the Department of Health and Human Services (DHHS)] may impose additional require- ments found necessary to ensure the health and safety of Medicare benefici- aries receiving services in hospitals. On this basis, the Conditions of Par- ticipation, a set of regulations setting minimum health and safety standards for hospitals participating in Medicare, were promulgated in 1966 and sub- stantially revised in 1986. Also since 1965, under authority of Section 1865 of the Social Security Act, hospitals accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO or the Joint Commission) or the Ameri- can Osteopathic Association (AOA) have been automatically "deemed" to meet all the health and safety requirements for participation except the utilization review requirement, the psychiatric hospital special conditions, and the special requirements for hospital providers of long-term-care serv- ices. As a result of this deemed status provision, most hospitals participat- ing in Medicare do so by meeting the standards of a private body governed by representatives of the health providers themselves. Currently, about 5,400 (77.1 percent) of the 7,000 or so hospitals participating in Medicare are accredited. The 1,600 or so participating hospitals that are unaccredited) tend to be small and located in nonurbanized areas. A 1980 study found that about 70 percent of the unaccredited hospitals had fewer than 50 beds, compared with only 13 percent of the accredited hospitals (see Table 7.1~. The current federal standards for hospitals participating in Medicare are presented in the Code of Federal Regulations (CFR) as 24 "Conditions of 292

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PARTICIPATION AND ACCREDITATION FOR HOSPITALS TABLE 7.1 Medicare Participating Hospitals, 1980 TotalJCAHO/AOAa Number ofParticipatingAccredited BedsHospitalsHospitalsb <501,7726791,093 50-991,6071,253354 100-1991,4441,36678 200-29978676125 300-39944443311 400~992932885 500-9993433385 1,000+56542 Total6,7455,1721,573 aJCAHO is the Joint Commission on Accreditation of Healthcare Orgaruzations; AOA is the American Osteopathic Association. bl lS are accredited by AOA. SOURCE: DHHS, 1980. 293 Participation," containing 75 specific standards (see Table 7.2~.2 The re- sponsibility for revising the Conditions of Participation lies with the Bureau of Eligibility, Reimbursement and Coverage of the Health Care Financing Administration (HCFA). A separate HCFA unit, the Bureau of Health Stan- dards and Quality (HSQB), is responsible for administering and enforcing the Conditions of Participation. In addition to overseeing about 1,600 certi- fied and 5,400 accredited hospitals, HSQB enforces separate sets of Condi- tions of Participation for over 25,000 other Medicare providers, including approximately 10,000 skilled nursing facilities, 5,700 home health agencies, and 4,775 laboratories. The actual compliance of hospitals with the Condi- tions of Participation is monitored for the federal government by each state through periodic on-site surveys by personnel of the state agency that li- censes hospitals and other health facilities (or, in a few cases, by an equiva- lent agency). The Joint Commission on Accreditation of Hospitals (JCAH) was created in 1951 to accredit hospitals that met its minimum health and safety stan- dards. In 1987, JCAH changed its name to the Joint Commission on Ac- creditation of Healthcare Organizations in recognition that since 1970 it had developed accreditation programs for additional health services organiza- tions delivering long term care, ambulatory health care, home care, hospice care, mental health care, and "managed" care [for example, health mainte- nance organizations (HMOs) and preferred provider organizations (PPOs)~.

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294 MICHAEL G. H. McGEARY TABLE 7.2 Current Medicare Conditions of Participation and Standards for Hospitals Conditions of Participation Standards 1. Provision of emergency services by nonparticipating hospitals 2. Compliance with federal, state, and local laws 3. Governing body 4. Quality assurance 5. Medical staff 6. Nursing services 7. Medical record services 8. Pharmaceutical services 9. Radiologic services 10. Laboratory services 11. Food and dietetic services 12. Utilization review (a) Federal laws (b) State licensure (c) Personnel licensure (a) Medical staff (b) Chief executive officer (c) Care of patients (d) Institutional plan and budget (e) Contracted services (f) Emergency services (a) Clinical plan (b) Medically related patient care services (c) Implementation (a) Composition of the medical staff (b) Medical staff organization and accountability (c) Medical staff bylaws (d) Autopsies (a) Organization (b) Staffing and delivery of care (c) Preparation and administration of drugs (a) Organization and staffing (b) Form and retention of record (c) Content of record (a) Pharmacy management and administration (b) Delivery of services (a) Radiologic services (b) Safety for patients and personnel (c) Personnel (d) Records (a) Adequacy of laboratory services (b) Laboratory management (c) Personnel (d) (e) (a) (a) (c) (d) Blood and blood products Proficiency testing Quality control Organization Diets Applicability Composition of utilization review committee Scope and frequency of review Determination regarding admissions or continued stays (e) Extended stay review (f) Review of professional services

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PARTICIPATION AND ACCREDITATION FOR HOSPITALS 295 Conditions of Participation 13. Physical environment Standards 14. Infection control 15. Surgical services 16. Anesthesia services 17. Nuclear medicine services 18. Outpatient services 19. Emergency services 20. Rehabilitation services 21. Special provisions applying to psychiatric hospitals 22. Special medical record requirements for psychiatric hospitals 23. Special staff requirements for psychiatric hospitals 24. Special requirements for hospital providers of long-term-care services ("swing-beds") (a) Buildings (b) Life safety from fire (c) Facilities (a) Orgaruzanon and policies (b) Responsibilities of chief executive officer, medical staff, and director of nursing services (a) Organization and staffing (b) Delivery of service (a) Organization and staffing (b) Delivery of services (a) Organization and staffing (b) Delivery of service (c) Facilities (d) Records (a) Organization (b) Personnel (a) Organization and direction (b) Personnel (a) Organization and staffing (b) Delivery of services (a) Development of assessment and diagnostic data (b) Psychiatric evaluation (c) Treatment plan (d) Recording progress (e) Discharge planning and discharge summary (a) Personnel (b) Director of inpatient psychiatric services; medical staff (c) Availability of medical personnel (d) Nursing services (e) Psychological services (f) Social services (g) Therapeutic activities (a) Eligibility (b) Skilled nursing facility services SOURCE: 42 CFR Part 482, effective September 15, 1986

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296 MICHAEL G. H. McGEARY The Joint Commission's standards for the 5,400 hospitals it accredits currently are contained in the Accreditation Manual for Hospitals, some sections of which are revised each year through an elaborate process of professional consensus coordinated by its department of standards (see Table 7.3 for the outline of the Joint Commission's hospital standards). The Joint Commission currently is governed by a board of 24 commissioners, 7 each appointed by the American Medical Association (AMA) and the American Hospital Association (AHA), 3 each by the American College of Surgeons (ACS) and the American College of Physicians, 1 by the American Dental Association, and 3 private citizens appointed by the board to add the con- sumer perspective aCAHO, 1988a).3 As of late 198S, the Joint Commis- sion had a staff of 320 at its headquarters in Chicago and 310 surveyors located around the country. Both governmental regulation by HCFA and professional self-regulation by the Joint Commission are aimed at assuring the quality of care provided in hospitals.4 Both sets of standards have evolved from efforts to assure a minimum capacity to provide adequate care to more ambitious efforts to make hospitals assess and improve their organizational and clinical per ~ . ~ . . . tormance In a comprehensive and continuous manner. HOSPITAL STANDARDS: ORIGIN AND DEVELOPMENT Private, voluntary efforts to improve the quality of care in hospitals by setting minimum, and later, optimum standards date from 1918. However, federal facility standards have inevitably accompanied any significant fed- eral expenditures on hospital services or construction, beginning with the first grant-in-aid program for maternal and child health services, the Shep- pard-Towner Act of 1921. The two approaches were formally joined in 1965, when the Social Security Act amendments creating Medicare speci- fied that accreditation by JCAH meant that a participating hospital was automatically deemed to meet the federal Conditions of Participation in the Medicare program. Initially, about 60 percent of participating hospitals qualified through accreditation; today about four-fifths of the participating hospitals are accredited by the Joint Commission or, in some cases, the AOA. Development of Early Voluntary Standards by the ACS and JCAH The first standards for the organization and operation of hospitals were set forth by the ACS in 1918 (Davis, 1973; Stephenson, 1981; Roberts et al., 1987~. The founders of the ACS considered conditions in many hospi- tals to be deplorable for patients and physicians alike, and hospital stan- dardization was a stated purpose of the organization at its founding in 1912.

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PARTICIPAT70N AND ACCREDITATION FOR HOSPITALS TABLE 7.3 Joint Commission on Accreditation of Healthcare Organizations' Hospital Standards, 1990 Chapter Alcoholism and Other Drug Dependence Services (AL) 297 Standard AL.1 Objectives and scope AL.2 Assessment AL.3 Treatment planning AL.4 Monitoring and evaluation AL.5 Discharge planning DR.1 Direction and staffing DR.2 Policies and procedures DR.3 Diagnostic studies and therapeutic procedures DR.4 Monitoring and evaluation DT. 1 Organization, direction, staffing, and integration DT.2 Orientation, education, and training DT.3 Policies and procedures DT.4 Facility design and equipment DT.5 Medical record DT.6 Quality control mechanisms DT.7 Monitoring and evaluation ER. 1 Plan ER.2 Organization, direction, and staffing ER.3 Integration ER.4 Training and education ER.5 Policies and procedures ER.6 Facility design and equipment ER.7 Medical record ER.8 Quality control mechanisms ER.9 Monitoring and evaluation GB.1 Responsibilities GB.2 Conflict of interest GB.3 Fulfillment of responsibilities HO.1 Availability HO.2 Education and training HO.3 Policies and procedures HO.4 Safety, equipment, and utilities management and life safety HO.5 Medical record HO.6 Quality control mechanisms HO.7 Monitoring and evaluation IC. 1 Program IC.2 Committee IC.3 Management IC.4 Policies and procedures IC.5 Support services/ departments TABLE 7.3 continues Diagnostic Radiology Services (DR) Dietetic Services (DT) Emergency Services (ER) Governing Body (GB) Hospital-Sponsored Ambulatory Care Services (HO) Infection Control (IC)

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298 TABLE 7.3 Continued Chapter MICHAEL G. H. McGEARY Standard Management and Administration (MA) Medical Record Services (MR) Medical Staff (MS) Nuclear Medicine Services (NM) Nursing Services (NR) Pathology and Medical Laboratory Services (PA) Pharmaceutical Services (PH) Physical Rehabilitation Services (RH) MA.1 Responsibilities MR.1 Purposes MR.2 Content MR.3 Confidentiality and completeness MR.4 Direction, staffing, and facilities MR.S Staff role in committee functions MS.1 Membership MS.2 Bylaws and rules and regulations MS.3 Organization MS.4 Privilege delineation MS.S Reappointment and reappraisal MS.6 Monitoring and evaluation MS.7 Continuing education NM. 1 Direction and staffing NM.2 Policies and procedures NM.3 Diagnostic studies and therapeutic procedures NM.4 Monitoring and evaluation NR.1 Responsibilities NR.2 Direction and integration NR.3 Organization NR.4 Assignments NR.5 Care NR.6 Education and training NR.7 Policies and procedures NR.8 Monitoring and evaluation PA. 1 Availability PA.2 Facility design and equipment PA.3 Communication PA.4 Records and reports PA.5 Quality control systems PA.6 Additional specific requirements PA.7 Monitoring and evaluation PH. 1 Direction and staffing PH.2 Facility design and equipment PH.3 Scope of service PH.4 Intrahospital drug distribution system PH.5 Administration of drugs PH.6 Monitoring and evaluation RH.1 Availability RH.2 Services

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PARTICIPATION AND ACCREDITATION FOR HOSPITALS 299 Chapter Standard Plant, Technology, and Safety Management (PL) Professional Library Services (PR) Quality Assurance (QA) Radiation Oncology Services (RA) Respiratory Care Services (RP) Social Work Services (SO) Special Care Units (SP) Surgical and Anesthesia Services (SA) SA. 1 SA.2 SA.3 SA.4 Utilization Review (UR) RH.3 Comprehensive physical rehabilitation services RH.4 Monitoring and evaluation PL. 1 Safety management program PL.2 Life safety management program PL.3 Equipment management program PL.4 Utilities management program PR. 1 Availability PR.2 Policies and procedures QA.1 Program QA.2 Scope QA.3 Monitoring and evaluation QA.4 Administration and coordination RA.1 Direction and staffing RA.2 Policies and procedures RA.3 Consultations and procedures RA.4 Monitoring and evaluation RP. 1 Availability RP.2 Training and education RP.3 Policies and procedures RP.4 Facility design and equipment RP.S Documentation RP.6 Monitoring and evaluation SO. 1 Availability S0.2 Training and education S0.3 Policies and procedures S0.4 Documentation SO.S Monitoring and evaluation SP.1 SP.2 Direction and staffing SP.3 Training and education SP.4 Policies and procedures SP.S Facility design and equipment SP.6 Monitoring and evaluation SP.7 Specific-purpose units Availability Comparable quality Policies and procedures Monitoring and evaluation UR.1 Program Availability SOURCE: JCAHO, 1989

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300 MICHAEL G. H. McGEARY Sixty percent of the applicants for fellowship in the first 3 years of the ACS were rejected because the information in their medical case records was inadequate to judge clinical competence. Thus, the ACS formally estab- lished the Hospital Standardization Program, which existed until it was superseded by the JCAH in 1951. Although the ACS initially only promulgated five requirements, called the "Minimum Standard," only 89 of the 692 hospitals inspected in 1919 met these requirements. The number of accredited hospitals increased stead- ily, however; by 1950 nearly 3,300 hospitals met the Minimum Standard, which accounted for more than half He hospitals in the United States.5 The Minimum Standard emphasized basic structural characteristics con- sidered to be essential to "safeguard the care of every patient within a hospital" (Roberts et al., 1987, p. 937~. It required an organized medical staff of licensed medical school graduates who were competent, worthy in character, and ethical. The medical staff had to develop policies and rules approved by the governing body that governed the professional work of the hospital. The rules had to require medical staff meetings at least monthly and periodic reviews of patient care in each department, based on patient records. The specifications for complete patient medical records were de- tailed, including condition on discharge, follow-up, and autopsy findings in the case of death. Finally, diagnostic and therapeutic facilities had to in- clude at least a clinical laboratory and X-ray department (the entire mini- mum standard is reproduced in Roberts et al., 1987~. The Minimum Standard had dramatic results (Jost, 1983~. By 1935, for example, the proportion of hospitals with organized medical staffs increased from 20 percent to 90 percent. The ACS standards were revised and ex- panded a number of times over the years. By 1941 an additional 16 stan- dards addressing physical plant, equipment, and administrative organization supplemented the Minimum Standard. Eventually, however, the burden of accrediting several thousand hospitals became too great for the ACS to carry alone. In 1951 it joined with the American College of Physicians, the AHA, and the AMA to form the JCAH Cost, 1983~.6 JCAH carried on the ACS principles for improving health care in hospi- tals- voluntary private accreditation, minimum health and safety standards based on the consensus of health professionals, and confidential on-site surveys that involved education and consultation as well as evaluation (Roberts et al., 1987~. In 1961 JCAH began to hire its own surveyors rather than use ACS and AMA staff and in 1964 it began to charge a fee for inspections (Jost, 1983~. By 1965, when the legislation creating Medicare and Medicaid was passed, JCAH was already accrediting 60 percent of the hospitals (4,308 of 7,123) with 66 percent of the beds (1.13 million of 1.7 million) (AMA, 1966).

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PARTICIPATION AND ACCREDITATION FOR HOSPITALS 301 Early Government Standards State licensing programs for hospitals were not common until the early 1950s. Most were stimulated by federal requirements (the link in timing between federal requirements and state regulatory activity is evident from inspecting the tables in Fry, 1965~. Fewer than a dozen states had hospital regulations before World War II (Worthington and Silver, 1970~. Federal hospital standards were imposed in 1935 for maternity and children's ser- vices, under regulatory authority contained in Title V of the Social Security Act (Somers, 1969~. In 1946 the Hospital Survey and Construction (Hill- Burton) Act required the states to establish minimum standards for main- taining and operating hospital buildings aided by the act. At that time the AHA, the Public Health Service (PHS), the Council of State Governments, and other organizations sponsored a model hospital licensing law. This model law was adopted in many states, especially after 1950 amendments to the Social Security Act required states using federal matching funds for the payment of health care for welfare recipients to designate an agency to establish and maintain standards for facilities providing the care (Somers, 1969). In 1964 the Hill-Harris amendments to the Hill-Burton Act required state licensure programs that went beyond building conditions to the administra- tion of services. Nevertheless, in 1965 one state (Delaware) still did not license hospitals and Ohio and Wisconsin only licensed maternity hospitals and maternity units in general hospitals. Connecticut, on the other hand, had an extensive program for inspecting and licensing hospitals (Foster, 1965~. New York and Michigan had just passed the first comprehensive hospital codes that addressed the quality of medical service organization and delivery (Worthington and Silver, 1970~. A series of studies and surveys in the late 1950s and early 1960s also found that the hospital survey programs of the states varied greatly in focus, intensity, and composition of the inspection team (Taylor and Donald, 1957; McNerney, 1962; Foster, 1965; Fry, 1965~. Nearly all emphasized fire safety and sanitation, but fewer than 40 looked at nurse staffing and prac- tices and fewer than 30 looked at medical staffing and practices. Just 37 states inspected hospitals annually. Nurses were on inspection teams in only 27 states and the use of physicians in state licensure programs was rare (Foster, 1965~. Development of the Medicare Conditions of Participation, 1965-1966 The drafters of the Medicare legislation were aware of the variability in the extent and application of state licensure standards. They knew that sev

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302 MICHAEL G. H. AlcGEARY eral thousand, primarily small rural or proprietary hospitals, with a third of the nation's bed supply, were not in JCAH's voluntary accreditation pro- gram. In order to maximize access of beneficiaries to services, they did not want to exclude unaccredited hospitals from participating in the Medicare program. They could not rely, therefore, on licensure or accreditation to ensure minimum health and safety conditions in all hospitals. At the same time, federal policymakers did not want to create a national licensure pro- gram with federal inspectors. Accordingly, the Medicare legislation out- lined a program in which hospitals and other providers could participate voluntarily if employees of a state health facility inspection agency certi- fied that the providers met certain federal statutory and regulatory require- ments or if they were accredited by JCAH or another nationally recognized accreditation organization. The 1965 amendments to the Social Security Act that established Medi- care contained certain minimum requirements for hospitals? including the maintenance of clinical records, medical staff bylaws, a 24-hour nursing service supervised by a registered nurse, utilization review planning, insti- tutional planning and capital budgeting, and state licensure. Hospitals also had to meet any other requirements as the Secretary of HEW found neces- sary that were in the interest of the health and safety of individuals fur- nished services in the institution, provided that such other requirements were not higher than the comparable requirements prescribed for the ac- creditation of hospitals by JCAH. In addition, institutions accredited as hospitals by JCAH were "deemed" by the law to meet federal requirements without additional inspection or documentation (except the legislative re- quirements for utilization review, psychiatric hospital special conditions, and special requirements for hospitals providing long-term-care services). The Bureau of Health Insurance (BHI) of the Social Security Administration's Medicare Bureau was responsible for drafting the Condi- tions of Participation. Staff of the Division of Medical Care Administration in the PHS sewed as technical advisors, and a task force made up of repre- sentatives of major hospitals and health care and consumer organizations participated in the drafting of the conditions (HCFA, personal communica- tion, 1989~. Although the opportunity existed to develop model national standards, the efforts were severely constrained by the wording of the law, political and time pressures, the need to rely on state agency surveyors to inspect unaccredited hospitals, and the lack of knowledge about how to measure and achieve quality of medical care (Cashman and Myers, 1967~. Except for utilization review, Congress prohibited standards higher than those of JCAH, even though JCAH itself described its 1965 accreditation standards as the minimum ones necessary to assure an acceptable level of quality. Congressmen and administration officials had assured the hospital community since 1961 that JCAH-accredited hospitals would automatically

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332 MICHAEL G. H. McGEARY possible. The only formal sanction is loss of formal certification or ac- creditation, a drastic step that officials are reluctant to take except in ex- treme cases. The due process protections of the legal system also discour- age enforcement attempts, as do the difficulties of documenting quality problems more subtle than gross negligence or death. Thus, for a variety of reasons, officials are very reluctant to take formal enforcement actions, especially to the extent of terminating a facility, preferring instead to work with substandard or marginal facilities over time and bring them into com- pliance. This approach works well if the hospitals involved have the will and capacity to improve, if shown how to do it, but it is ill-equipped to deal with places that cannot or will not improve. Fourth, while the federal government has delegated much of the stan- dard-setting and enforcement to private accreditation bodies on the one hand, it has given away much discretion to the states on the other. The states have always varied greatly in their interpretation of federal standards, and little has been done to increase consistency. HCFA requirements for state survey programs are very loose. Federal officials recognized from the beginning that who does the surveying is critical, "since this greatly influ- ences what the emphasis will be, regardless of what the standard-setters think the emphasis should be" (Cashman and Myers, 1967, p. 1112), but little has been done to standardize state survey capacity or process. The development of interpretive guidelines and survey procedures for the new Conditions of Participation was a step in the right direction. HCFA could develop more sophisticated decision rules for state agencies to use in deter- mining compliance and making enforcement decisions. It also could de- velop a more statistically credible survey validation program to check the performance of the Joint Commission and the states.~5 Conclusion: Certification and Accreditation Could Play a Role in Quality Assurance Many of the obstacles to more effective quality assurance facing HCFA's survey and certification and the Joint Commission's accreditation efforts are those facing Medicare's Utilization and Quality Control Peer Review Organizations (PROs): lack of knowledge about the relations among struc- ture, process, and outcome; distance; and political pressure. One of the advantages of the PRO program is its continuous access to information on individuals and the episodes of care they experience. Unlike the survey agencies or the Joint Commission (at least until and if its plan to develop and then collect data on clinical and organizational indicators is carried out), PROs can actively screen data using indicators of poor quality or inappropriate care. This at least allows them to identify statistically aber- rant hospitals and physicians through the use of aggregate profiles. How

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PARTICIPATION AND ACCREDITAT70N FOR HOSPITALS 333 ever, the PROs are not well able to make the in-depth on-site investigations of places the indicators may identify, especially small, remote hospitals in rural areas. The survey agencies, on the other hand, can and do mandate certain minimum capacity characteristics of hospitals. In addition, they can require that hospitals have and use internal quality assurance standards and proce- dures. They can require those specific process characteristics that research has or will show are associated with favorable outcomes. In the meantime, the standards should be periodically revised in accord with expert consen- sus about best practices. Finally, survey agencies could be involved for- mally and systematically in investigations of hospitals where PRO-derived quality indicators signal possible quality problems and could use their legal authority to mandate changes needed. Issues and Options Major Issue 1: Role of Certification in Quality Assurance The Conditions of Participation and procedures for enforcing them are a part of the federal government's quality assurance effort, and, as such, they should be the best possible, given the state of current knowledge and availa- bility of resources, and they should be consistent with and supportive of other federal quality assurance activities. Pros: A large number of hospitals (1,600) with a significant number of beds are outside the accreditation system, and they tend to be the only hospitals . . in t hear area. Hospitals that have lost accreditation have applied for and received certification. The conditions mandate some important basic structure and process standards (e.g., life safety code, sanitation and infection control, etc.) that can be enforced legally if there are related quality problems found by PROs or otherwise (e.g., through complaints). State health facility surveyors are useful for investigating the causes of indicators of poor quality revealed through surveillance of case statistics. Quality is multifaceted and multiple systems of surveillance and en- forcement are useful. . Cons: The inherent limits on the ability of periodic facility inspections to find problems in the quality of patient care are too great (compared to, say, a peer review approach) to justify more investment in this approach.

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334 . MICHAEL G. H. McGEARY Quality-of-care problems in unaccredited hospitals could be effectively dealt with by the PROs or other programs based on systematic, ongoing . ~ review or cases. Political pressures on state health agencies and HCFA to keep hospi- tals open, especially in rural areas, are too great. The need to keep PRO data confidential precludes coordination with the certification process; potential triggering of regulatory enforcement would poison the peer review process. Related issue: Improving the standards. If certification is considered to be an important part of the federal quality assurance effort, the standards (Conditions of Participation) should be revised to be consistent and suppor- iive of the overall federal quality assurance effort and kept up to date. Pros: The current conditions and related standards and elements were devel- oped in the early l980s and do not reflect recent advances in measuring and assuring quality of care. State licensure standards even for basic structural aspects of hospitals vary widely and certification assures conformity to a uniform set of stan- dards. Cons: It is not realistic to expect that the conditions, which must go through the formal federal rule-making process, can be updated continuously. Little or no relation has been shown between facility-based standards and quality of patient care. Related issue: Improving enforcement. HCFA should take a number of steps to increase enforcement capacity (some of them already adopted in nursing home regulation), including the following: specification of survey team size and composition; use of survey procedures and instruments that focus more on patients and less on records; development of explicit deci- sion rules for determining enforcement actions; adoption of intermediate sanctions, such as fines and bans on admissions, so the punishment can fit the crime; and more use of federal inspectors to evaluate state agency per- formance through validation surveys and to inspect state hospital facilities. Pros: Increasing competition and price regulation (e.g., prospective payment) in the hospital sector call for more attention to quality assurance and en- forcement, especially in small rural hospitals. Enforcement can be increased through these kinds of federal actions, as has been done with certified nursing homes.

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PARTICIPATION AND ACCREDITATION FOR HOST Cons: . ness. 335 These steps are not worth the cost, given the limits on their effective Major Issue 2: Role of the Joint Commission in Assuring Quality of Care for Medicare Patients Deemed status should continue, and the Joint Commission should be encouraged in its efforts to develop a state-of-the-art quality assurance pro- grarn, but, at the same time, federal oversight of the Joint Commission should be increased to ensure accountability and there should be more dis- closure of information about hospitals with quality problems discovered by the Joint Commission. Pros: Joint Commission standards are higher and more up-to-date than the Conditions of Participation. Accreditation is a positive incentive that motivates hospitals to im- prove more than certification does or can (the Joint Commission is planning to reinforce this by recognizing "superior" hospitals). Joint Commission inspectors have better clinical credentials and make more consistent decisions. . The Joint Commission may achieve better compliance than the state agencies because accreditation is highly valued and the state agencies are hampered procedurally and politically (e.g., due process, lack of authority to deal with repeat deficiencies, political pressure to assure access to Medi- care services); in fact, HCFA might contract with the Joint Commission to conduct all certification surveys, subject to closer monitoring, rather than deal with the inconsistencies and administrative costs of dealing with more than 50 state survey agencies. The Joint Commission is planning voluntarily to release information to HCFA on hospitals with significant quality problems whose continued accreditation is conditional on major changes. These would be the 7 to 8 percent of hospitals surveyed each year that trigger one or more of the Joint Commission's nonaccreditation decision rules. Cons: Higher standards are not meaningful if they are not enforced vigor- ously. In any case, the Joint Commission is a private organization governed by associations of the providers it is regulating; its survey findings are confidential (except in 13 states e.g., New York, Pennsylvania, Arizona

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336 MICHAEL G. H. McGEARY where the survey is a public document under state law). The Joint Commis- sion is not publicly accountable and, therefore, responsibility for assuring the health and safety of Medicare beneficiaries should not be delegated to it. The Joint Commission is still relatively weak in enforcing environ- mental and life safety code standards. HCFA must maintain a certification program with adequate standards and sufficient capacity (resources and procedures) in any case, to deal with small and rural hospitals that are not accredited, and this program could and should be applied to all (hospitals would still be encouraged to seek ac- creditation). . The resources for increasing federal oversight more funding for more Intensive state inspections, more federal inspectors to conduct validation surveys- would be better used elsewhere in the federal quality assurance program. Major Issue 3: Improving Coordination of Federal Quality Assurance Efforts HCFA should develop criteria and procedures for referring cases in which there are indications of serious quality-of-care problems from PROs to the Office of Survey and Certification and vice versa. Pros: The quality-of-care screens used by PROs include only indicators of quality-of-care problems, and the actual role of a hospital in producing adverse indicators has to be investigated further before changes can be required or sanctions applied. In many cases, on-site surveys by health facility inspectors could usefully sunDlement centrn1 r~.vi~.w~ Of reaps hv PRO clinicians. . --A --red '' ~ ~^ ~ The state inspection agencies and federal regional offices, in turn, could alert PROs when they find hospitals with possible quality-of-care problems; the PROs could then initiate focused reviews to document pro- cess-of-care or patient-outcome problems, if any. Cons: . Most state inspection agencies do not have physician inspectors and some do not have that many nurses, which limits their capacity to look at quality of clinical care or to justify findings in court against a facility's physician consultants. Any additional resources for handling quality-of-care problems should go to building up PROs or some other peer review-oriented mechanism.

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PARTICIPATION kD ACC~D~ATION FOR HOSPICE CONCLUDING REMARKS 337 About 7,000 hospitals provide services to Medicare patients. The Secre- tary of DHHS has the regulatory authority to promulgate standards called Conditions of Participation in order to assure the adequate health and safety of Medicare patients in those hospitals, although the 5,400 hospitals accred- ited by the private Joint Commission and the AOA are deemed to meet the federal standards without further inspection by a public agency (except for a small number of accredited hospitals that are subject to validation surveys each year). In effect, then, Joint Commission standards are the Medicare standards for most Medicare beneficiaries using hospital services. At the same time, the users of 1,600 hospitals rely on the standards in the Medi- care Conditions of Participation. These are mostly small, primarily rural hospitals where Medicare beneficiaries do not have the alternative of going to an accredited hospital. Both sets of standards, therefore, affect a large number of people and should be as effective as possible in achieving the goal of assuring adequate care. This chapter has examined the evolution of Medicare and the Joint Com- mission hospital standards from mostly structural standards (aimed at assur- ing that a hospital has the minimum capacity to provide quality care) to mostly process standards (aimed at making hospitals assess in a systematic and ongoing way the actual quality of care provided on their premises). Also, certain structural standards, such as those for fire safety, that continue to be mandated and enforced through the certification and accreditation standards may not be closely related to patient care but are important fac- tors in patient safety. The certification and accreditation programs are inherently limited in their capacity to assure quality of care. They are hampered by the lack of knowledge about the interrelations between structure and process features of a hospital and patient outcomes. They are limited because periodic inspections cannot reveal much about how well the process of care con- forms to the standards of best practice, or what the outcomes of care are. They rely on the subjective judgment of their inspectors and the enforce- ment attitudes of the inspection agencies. Certification and accreditation could play a significant role in Medicare's quality assurance efforts if several issues are addressed. Pros and cons of suggested strategies are identified for consideration. NOTES 1. Throughout this chapter, we use the terms nonaccredited and unaccredited. Nonaccredited hospitals are those that have lost accreditation from the Joint Com

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338 MICHAEL G. lI. McGEARY mission. Unaccredited hospitals are those hospitals that have never been accredited by the Joint Commission or who were accredited but subsequently lost accreditation and are not actively pursuing accreditation with the Joint Commission. 2. Another regulation automatically permits hospitals that meet the Medicare Conditions of Participation to participate in Medicaid. 3. One consumer representative has served on the board since 1981. In late 1989, two more public members were added to the Joint Commission board. 4. The author wishes to acknowledge the helpful comments provided by staff of the Joint Commission, HSQB, and HCFA's Office of Policy Development on earlier drafts of this chapter. 5. Most of the unaccredited hospitals had fewer than 25 beds and therefore were not eligible for accreditation under ACS rules at that time. 6. The Canadian Medical Association was also a founder of JCAH but withdrew In 1959 to develop the Canadian Council on Hospital Accreditation. The American Dental Association joined JCAH in 1980. 7. At 1961 hearings on health services for the aged, HEW Secretary Ribicoff said he would "hand down an order that any hospital that was accredited by the Joint Commission on Accreditation would be prima facie eligible" (quoted in Jost, 1983, p. 853~. The report of the Senate Finance Committee accompanying die Medicare bill said that hospitals accredited by JCAH would be "conclusively pre- sumed to meet all the conditions for participation, except for the requirement of utilization review" (quoted in Worthington and Silver, 1970, p. 314~. 8. Art Hess, first head of Medicare, told the American Public Health Associa- tion at its 1965 annual meeting that the Social Security Administration did not want to pay for services that did not meet "minimal quality standards," but "the intention . . . is not to impose requirements that cannot be met." He went on to say that "the program, through its definitions, provides support to what has now been achieved, and makes continued upgrading possible as progress in standards is made in the private sector through accreditation activities" (Hess, 1966, p. 14~. 9. Two special certification provisions were implemented in 1966 for certifying hospitals that did not meet the Conditions of Participation. The access provision allowed for the certifying of rural hospitals out of compliance with one or more conditions but in compliance with all statutory provisions provided the hospital was located in a rural area where access by Medicare enrollees to fully participating hospitals would be limited. The second provision, based upon the Burleson amend- ment, waived the statutory 24-hour registered nurse requirement for rural hospitals meeting all other requirements. Both provisions have since been terminated. 10. As of 1970, 98 hospitals that had applied in 1966 were still not in the program and 411 hospitals were participating through the special access certification provision (Worthington and Silver, 1970~. 11. JCAH apparently adopted the utilization review requirement (implemented in 1967) in the hope that accredited hospitals could be deemed to meet all federal requirements without state agency inspection. The Secretary of the DHHS, how- ever, has never agreed to let this accreditation standard be deemed to meet the federal utilization review requirement. More recently, however, hospitals have been able to meet the requirement if they are reviewed through Medicare's Utilization and Quality Control Peer Review Organization (PRO) program.

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PARTICIPATION AND ACCREDITATION FOR HOSPITALS 339 12. Even though compliance at the condition level may be similar, it is inrerest- ing to note that more detailed analyses in earlier reports found that only about 10 to 14 percent of the specific deficiencies cited were the same (DlIHS, 1979, 1980; GAO, 1979). 13. These worksheets, which provide insight into the thinking that went into the revision of the Conditions of Participation for hospitals during the 1981-1983 pe- riod, are in the HCFA files (HCFA Task Force, 1982~. 14. For example, comparative hospital mortality figures have no meaning with- out consideration of many factors such as case-mix, severity of illness, geographic differences, and patterns of care of the terminally ill among hospitals, hospices, nursing homes, and family homes. 15. As of late 1989 HCFA was considering a revision of its sampling methodol- ogy to improve the effectiveness of its validation efforts. Also, beginning in FY 1989, the number of validation surveys performed by state agency staff was in- creased to approximately 200 per year (HCFA, personal communication, 1989~. REFERENCES Affeldt, J.E., Roberts, J.S., and Walczak, R.M. Quality Assurance: Its Origin, Status, and Future Direction A JCAH Perspective. Evaluation and the Health Pro- fessions 6:245-255, 1983. AHA (American Hospital Association). Hospitals, Journal of the American Hospi- tal Association (Guide Issue, Part 2), 40 (August 1, 1966~. Association of Health Facility Licensure and Certification Agency Directors. Sum- mary Report: Licensure and Certification Operations. Unpublished report submitted to Health Standards and Quality Bureau, Health Care Financing Administration, Baltimore, Md., 1983. Bogdanich, W. Prized by Hospitals, Accreditation Hides Perils Patients Face. Wall Street Journal October 12, 1988, pp. Al, A12. Cashman, J.W. and Myers, B.A. Medicare: Standards of Service in a New Pro- gram Licensure, Certification, Accreditation. American Journal of Public Health 57:1107-1117, 1967. Davis, L. Fellowship of Surgeons: A History of the American College of Surgeons. Chicago, Ill.: American College of Surgeons, 1973. DHHS (Depar~xnent of Health and Human Services). Medicare Validation Surveys of Hospitals Accredited by the JCAH: Annual Report for FY 1979. Washing- ton, D.C.: U.S. Department of Health and lIuman Services, 1979. DHHS. Medicare Validation Surveys of Hospitals Accredited by the JCAH: Annual Report for FY 1980. Washington, D.C.: U.S. Department of Health and Human Services, 1980. O ~O DHHS. Inventory of Surveyors of Medicare and Medicaid Programs, United States, 1983. Baltimore, Md.: Health Care Financing Administration, 1983. DHHS. Report on Medicare Validation Surveys of Hospitals Accredited by the Joint Commission on Accreditation of Hospitals (JCAH): Fiscal year 1985. In Report of the Secretary of DHHS on Medicare. Washington, D.C.: U.S. Gov- enunent Printing Office, 1988.

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340 MICHAEL G. H. AlcGEARY Donabedian, A. Evaluating the Quality of Medical Care. Milbank Memorial Fund Quarterly 44:166-203, 1966. Donabedian, A. The Epidemiology of Quality. Inquiry 22:282-292, 1985. Donabedian, A. The Quality of Care: How Can It Be Assessed? Journal of the American Med. ical Association 260: 1743-1748, 1988. Feder, J. Medicare: The Politics of Federal Hospital Insurance. Lexington, Mass.: D.C. Heath, 1977a. Feder, J. The Social Security Administration and Medicare: A Strategy for Implem- entation. Pp. 19-35 in Toward a National Health Policy. Friedman, K. and Rakoff, S., eds. Lexington, Mass.: D.C. Heath, 1977b. Federal Register, Vol. 45, pp. 41794~1818, June 20, 1980. Federal Register, Vol. 48, pp. 299-315, January 4, 1983. Federal Register, Vol. 51, pp. 2201~22052, June 17, 1986. Foster, J.T. States are Stiffening Licensure Standards. Modern Hospital 105:128-132, 1965. Fry, H.G. The Operation of State Hospital Planning and Licensing Programs. American Hospital Association Monograph Series, No. 15. Chicago, Ill.: American Hospital Association, 1965. GAO (General Accounting Office). The Medicare Hospital Certification System Needs Reform. HRD-79-37. Washington, D.C.: General Accounting Office, 1979. Greenfield, S., Lewis, C.E., Kaplan, S.H., et al. Peer Review by Criteria Mapping: Criteria for Diabetes Mellitus: The Use of Decision-Making in Chart Audit. Annals of Internal Medicine 83:761-770, 1975. Greenfield, S., Nadler, M.A., Morgan, M.T., et al. The Clinical Investigation and Management of Chest Pain in an Emergency Department: Quality Assessment by Criteria Mapping. Medical Care 15: 898-905, 1977. Greenfield, S., Cretin, S., Worthman, L.G., et al. Comparison of a Criteria Map to a Criteria List in Quality-of-Care Assessment for Patients With Chest Pain: The Relation of Each to Outcome. Medical Care 19:255-272, 1981. HCFA Task Force (Health Care Financing Administration). HCFA Task Force Recommendations. Unpublished document in files of the Health Standards and Quality Bureau, Health Care Financing Administration, Baltimore, Md., 1982. HCFA. Appendix A, Interpretive Guidelines Hospitals. Pp. A1-A165 in State Operations Manual: Provider Certification. Transmittal No. 190. Health Care Financing Administration. Washington, D.C.: U.S. Department of Health and Human Services, 1986. Health Insurance Benefits Advisory Council. Report Covering the Period July 1, 1966~ecember 31, 1967. Washington, D.C.: Social Security Administra- tion, 1969. Hess, A.E. Medicare: Its Meaning for Public Health. American Journal of Public Health 56: 10-18, 1966. IOM (Institute of Medicine). Improving the Quality of Care in Nursing Homes. Washington, D.C.: National Academy Press, 1986. Jacobs, C.M., Christoffel, T.H., and Dixon, N. Measuring the Quality of Patient Care: The Rationale for Outcome Audit. Cambridge, Mass.: Ballinger, 1976.

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PARTICIPATION AND ACCREDITATION FOR HOSPITALS 341 JCAH (Joint Commission on Accreditation of Hospitals). Standards for Hospital Accreditation. Chicago, Ill.: Joint Commission on Accreditation of Hospitals, 1965. JCAH. 1970 Accreditation Manualfor Hospitals. Chicago, Ill.: Joint Commission on Accreditation of Hospitals, 1971. JCAH. The PEP Primer: Performance Evaluation Procedure for Auditing and Im- proving Patient Care. Chicago, Ill.: Joint Commission on Accreditation of Hospitals, 1975. JCAH. Guidelines Set for AMH Revision. JCAH Perspectives 1~5~:3, 1981. JCAH. New QA Guidelines Set. JCAH Perspectives 2~5~:1, 1982. JCAH. New Quality and Appropriateness Standard Included in 1984 AMH. JCAH Perspectives 3~5~:5-6, 1983. ICAH. JCAH Board Approves New Medical Staff Standards. JCAH Perspectives 4~1 ): 1,3 - , 1 984a. JCAH. Quality Assurance Standards Revised. JCAH Perspectives 4~11:3, 1984b. JCAH. "Implementation Monitoring" for Designated Standards. JCAH Perspec- tives 5~1~:3 - , 1985. JCAH. Monitoring and Evaluation of the Quality and Appropriateness of Care: A Hospital Example. Quality Review Bulletin 12:326-330, 1986. JCAH. Hospital Accreditation Program Scoring Guidelines: Nursing Services, In- fection Control, Special Care [Jnits. Chicago, Ill.: Joint Commission of Ac- creditation of Hospitals, 1987. JCAHO (Joint Commission on Accreditation of Healthcare Organizations). Over- view of the Joint Commission's "Agenda for Change." Mimeo. Chicago, Ill.: Joint Commission on Accreditation of Healthcare Organizations, 1987. JCAHO. An Introduction to the Joint Com~nisszon: Its Survey and Accreditation Processes, Standards, and Services. Third edition. Chicago, Ill.: Joint Com- mission on Accreditation of Healthcare Organizations, 1988a. JCAHO. Rules Change on Monitoring and Evaluation Contingencies. Joint Com- mission Perspectives 8:5 - , 1988b. JCAHO. Medical Staff Monitoring and Evaluation: Departmental Review. Chicago, Ill.: Joint Commission on Accreditation of Healthcare Organizations, 1988c. JCAHO. Proposed Clinical Indicators for Pilot Testing. Chicago, Ill.: loins Com- mission on Accreditation of Healthcare Organizations, 1988d. JCAHO. Field Review Evaluation Form: Proposed Principles of Organizational and Management Effectiveness. Chicago, Ill.: Joint Commission on Accreditation of Healthcare Organizations, 1988e. JCAHO. Hospital Accreditation Program Surveyors, September 1988. Chicago, Ill.: Joint Commission on Accreditation of Healthcare Organizations, 1988f. JCAHO. 1990 Accreditation Manual for Hospitals. Chicago, Ill.: Joint Commis- sion on Accreditation of Healthcare Organizations, 1989. Jost, T.S. The Joint Commission on Accreditation of Hospitals: Private Regulation of Health Care and the Public Interest. Boston College Law Review 24:835-923, 1983. Lohr, K.N. Outcome Measurement: Concepts and Questions. Inquiry 25:37-50, 1988.

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342 MICHAEL G. H. McGEARY Longo, D.R., Wilt, J.E., arid Laubenthal, R.M. Hospital Compliance with Joint Commission Standards: Findings from 1984 Surveys. Quality Review Bulle- tin 12:388-394, 1986. McNerney, W.J. Hospital and Medical Economics. Chicago, Ill.: American Hose tat Association Hospital Research and Educational Trust, 1962. Palmer, R.H. and Reilly, M.C. Individual and Institutional Variables Which May Serve as Indicators of Quality of Medical Care. Medical Care 17:693-717, 1979. Phillips, D.F. and Kessler, M.S. Criticism of the Medicare Validation Survey. Hospitals, Journal of the American Hospital Association 49:61-62, 64, 66, 1975. Roberts, J.S. and Walczak, R.M. Toward Effective Quality Assurance: The Evolu- tion and Current Status of the JCAH QA Standard. Quality Review Bulletin 10:1 1-15, 1984. Roberts, J.S., Coale, J.G., and Redman, R.R. A History of the Joint Commission on Accreditation of Hospitals. Journal of the American Medical Association 258:936-940, 1987. Sanazaro, P.~. Quality Assessment and Quality Assurance in Medical Care. Annual Review of Public Health 1980 1:37-68, 1980. Schroeder, S.A. Outcome Assessment 70 Years Later: Are We Ready? New En- gland Journal of Medicine 316:160-162, 1987. Silver, L.H. The Legal Accountability of Nonprofit Hospitals. Pp. 183-200 in Regulating Health Facilities Construction. Havighurst, C.C., ed. Washing- ton, D.C.: American Enterprise Institute for Public Policy Research, 1974. Somers, A.R. Hospital Regulation: The Dilemma of Public Policy. Princeton, N.J.: Industrial Relations Section, Princeton University, 1969. Stephenson, G.W. College History: The College's Role in Hospital Standardization. Bulletin of the American College of Surgeons (February):17-29, 1981. Taylor, K.O. and Donald, D.M. A Comparative Study of Hospital Licensure Regula- tions. Berkeley, Calif.: School of Public Health, University of California, 1957. Vladeck, B.C. Quality Assurance Through External Controls. Inquiry 25:100-107, 1988. Worthington, W. and Silver, L.H. Regulation of Quality Care in Hospitals: The Need For Change. Law and Contemporary Problems 35:305-333, 1970.