SSR 69-11: Section 1861(E).—Hospital Insurance Benefits - Certification of Hospital as Provider of Services—Conditions of Participation
20 CFR 405.1010 ff.
Where a community hospital which was not accredited by the Joint Commission on Accreditation of Hospitals or the American Osteopathic Association, filed a request to establish eligibility to participate as a provider of services under the title XVIII health insurance program, and a survey of its facilities and personnel revealed it was not a "hospital" as defined in section 1861(e) of the Social Security Act because of failure to meet all the statutory requirements and was not in substantial compliance with all of the Conditions of Participation found necessary for the health and safety of individuals furnished services there as prescribed in Social Security Administration Regulations No. 5 (20 CFR 1010 ff.), held the community hospital is not entitled to certification as a provider of services under the Act and regulations promulgated thereunder.
X Community Hospital filed a Request to Establish Eligibility as a provider of services under section 1861(e) of the Social Security Act, as amended, and, as the result of a survey of its facilities and personnel, was advised that it did not meet the requirements for participation in the "Medicare" program of the Act and was not therefore entitled to certification as such.
As pertinent here, the term "provider of services" means a "hospital" which is defined in section 1861(e) of the Act as "an institution which
(1) is primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medial diagnosis, treatment, and care of injured, disabled, or sick persons or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons:
(2) maintains clinical records on all patients;
(3) has bylaws in effect with respect to its staff of physicians;
(4) has a requirement that every patient must be under the care of a physician;
(5) provides 24-hour nursing service rendered or supervised by a registered professional nurse, and has a licensed practical nurse or registered professional nurse on duty at all times;
(6) has in effect a hospital utilization review plan which meets the requirements of subsection (k);
(7) in the case of an institution in any State in which State or applicable local law provides for the licensing of hospitals, (A) is licensed pursuant to such law or (B) is approved by the agency of such State or locality responsible for licensing hospitals, as meeting the standards established for such licensing; and
(8) meets such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution, except that such other requirements may not be higher than the comparable requirements prescribed for the accreditation of hospitals by the Joint Commission on Accreditation of Hospitals (subject to the second sentence of section 1863).***
The statutory requirements for participation by a hospital provider in section 1861(e), supra, include eight specific conditions, the last of which authorizes the Secretary to establish by regulation such further conditions as may be necessary in the interest of health and safety. The Secretary has no authority or discretion to waive or permit less than complete compliance with any of these requirements; they are legislatively imposed, with no permissible latitude of application. They must be fully met by the applying institution. In addition, there must be substantial compliance with such other conditions as may be imposed by the Secretary for reasons of health and safety. The Secretary, by duly promulgated regulations, has amplified on the statutory conditions and has prescribed certain other necessary requirements for participating hospital providers. These are referred to as conditions of participation, and are set out in Subpart J, Regulations No. 5 of the Social Security Administration (20 CFR 405.1010, et set.).
Under certain circumstances, a provider of hospital services may be "deemed to meet most of these conditions for participation. Thus, if an institution is either currently accredited by the Joint Commission on Accreditation of Hospitals or by the American Osteopathic Association, such hospital, with an appropriate utilization review plan, may be deemed to meet the conditions of participation. In the absence of such accreditation, which is the situation here, the applicant must show either that it meets the specific statutory requirements of section 1861(e) and is operating in accordance with all other conditions of participation with no significant deficiencies; or it meets these statutory requirements but is found to have deficiencies with respect to one or more of the other conditions of participation, which it is making reasonable plans and efforts to correct and, notwithstanding the deficiencies, is rendering adequate care and without hazard to the health and safety of individuals being served, taking into account special procedures or precautionary measures which have been or are being instituted. Section 405.1005, Social Security Administration Regulations NO. 5 (20 CFR 405.1005).
In determining whether an institution is in substantial compliance with the conditions of participation, criteria established by the Secretary with respect to evaluation of the evidence presented are pertinent. Thus, consideration is given to the degree to which each standard, as well as the total set of standards, relating to a condition of participation is met; where there is a deficiency in meeting a standard, consideration is given to whether it is one concerning the statutory requirements which all hospitals must meet; whether the deficiency creates a serious health and safety hazard; and whether the hospital is making reasonable plans and efforts to correct the deficiency within a reasonable period. (20 CFR 405.1009) Cognizance is taken of variances from institution to institution, dependent on its type and size and on the nature and scope of services offered by each, reflected in differences in the details of organization, staffing, and facilities, but the overall test of substantial compliance with each of the conditions must be met.
Evaluation of the facts in this case in the light of these criteria shows that the applicant hospital is not in substantial compliance with the following specific conditions of participation, for the reasons outlined below:
(a) Section 405.1021, Regulations No. 5 (20 CFR 405.1021) requires that the institution applying for certification have an effective governing body legally responsible for its conduct, either formally organized or otherwise. Standing as a vanguard for users of the facility, its necessity as a strong and functioning component of the institutional structure cannot be minimized, even in the smaller institutions.
The principal impediment to an effective governing body in the instant case relates to the fact that it is not operating under adopted written bylaws. Aside from X Community Hospital's failure to operate under written bylaws, there is no documentation to show that the ostensible governing board is carrying out the ordinary functions to be expected of an effectively operating governing board. Rather, the evidence presented indicates a complete lack of direction by the board over the hospital's chief executive officer, the Administrator. The evidence presented appears, therefore, to fall short of supporting a conclusion that the applicant hospital has an effective governing body operating in accordance with written bylaws, as required by this condition.
(b) Section 405.1023, Regulations No. 5 (20 CFR 405.1023) relating to the medical staff requires that the hospital have a medical staff organized under bylaws approved by the governing body and responsible to the governing body for the quality of all medial care provided patients in the hospital and for the ethical and professional practices of its members. The objective of this Condition cannot be accomplished unless there is a staff arrangement designed in some form to insure that the highest professional competency is directed toward the single purpose of providing the highest quality medical care and treatment possible.
This institution has only three physicians, operating as a close-knit organization on a day-to-day basis, with the staff operating as a Committee of the Whole for its purposes. However, no minutes of staff meetings were ever made until June 1966, and conclusions reached at current staff meetings are not written down. Assuming that the staff does act as a Committee of the Whole, there is a lack of evidence to show that appropriate liaison is maintained by this committee with the Board of Trustees; that the Committee has acted affirmatively to rectify the deficiencies noted in the medical records (see (d) below); that the Committee members jointly review and evaluate pathological reports; or that the Committee has reviewed, analyzed or evaluated the clinical work of its members. It does not therefore appear that the medical staff of the applicant is operating in such a manner as to be in substantial compliance with the pertinent Condition of Participation.
(c) Section 405.1024, Regulations No. 5 (20 CFR 405.1024) requires that the institution have an organized nursing department; that a licensed registered professional nurse be on duty at all times and professional nursing service be available for all patients at all times. This condition is buttressed by statute, which specifically includes, as part of the definition of a hospital, that 24-hour nursing service be rendered or supervised by a registered professional nurse. There must be a registered professional nurse in charge of the operating rooms. Under established working relationships in the hospital, there must be conferences relative to patient care between the registered professional nurses and the physicians. There is required a constant review and evaluation of the nursing care provided for patients. There is also a requirement that regular monthly meetings, with minutes recorded, be held by the registered professional nursing staff to discuss patient care, nursing service problems and administrative policies.
The evidence in this case shows that a registered nurse is not on duty at all times. There are two 8-hour shifts, biweekly, in which no registered nurse is on duty; a registered nurse is "on call" for two uncovered shifts. This arrangement appears to be tenuous in that the Administrator has no way of knowing where the "on call" nurse might be at a given time. A nurse, who is not paid for being on call, may not be considered reasonably available in case of an immediate need for her services by a patient. Hospital emergencies do not accommodate a particular shift or time of day. They can and do occur at any time and the requirement for expert nursing personnel to be on hand at all times is in recognition of this fact.
There are other deficiencies. The evidence does not establish that a registered professional nurse is in charge of the operating room. Moreover, there is a total absence of conferences, except on an individual day-to-day basis, between the nursing and medical staff relating to patient care. Additionally, the record fails to reveal the existence of any effective review and evaluation of nursing care provided for patients as called for. The same is equally true with respect to the requirement for regular monthly meetings by the registered professional nursing staff to discuss patient care, nursing service problems and administrative policies. In summary, the nursing department of the applicant is not operated at a level commensurate with the overall requirements of the Conditions of Participation and, more specifically, it does not meet the statutory requirement for 24-hour registered nursing care or supervision for patients.
(d) Section 405.1026, Regulations No. 5 (20 CFR 405.1026) requires that an applicant hospital have a medical record department which maintains, in accordance with accepted professional principles, a medical record for every patient admitted for care in the hospital. Among other things, the standards for this condition are concerned with the indexing, filing, content, promptness of preparation and signing of the medical records. These records should contain sufficient information to justify the diagnosis and warrant the treatment and end results. Only members of the medical staff and the house staff are competent to write or dictate medical histories and reports of physical examinations. The records should be authenticated and signed by a licensed physician. Current records and those on discharged patients should be completed promptly; within 24-48 hours following admission, and within 15 days following discharge of patients.
It appears from the record that the deficiencies alleged with respect to this department are largely confined to these areas, and involve the duties of the medical staff in relation to the records, i.e., the content, promptness of preparation and signing. Apparently the majority of records were not properly completed, nor signed. In the inspection of the charts of 8 or 10 patients, there was in some instances an absence of clinical information such as past history and admitting diagnoses. The records of discharged patients were not completed within 15 days following discharge.
Promptly and properly prepared clinical records are of utmost importance in the treatment and care of patients. Codification and filing of such records has its measure of importance under this Condition; however, no matter how well coded or how well indexed such records may be, they do not serve their intended purpose if they are lacking in the essential clinical information relating to the patient such as history, diagnosis, treatment, and prognosis. The same is equally true if there is inordinate delay in including such information in the record. Although the Administrator of the community hospital stated there had been recent improvements in the filing and disease codification of records, she did not specifically mention that there had been any change or improvement in the content of such records or that the records were being timely and properly completed and signed. Considering the relative importance of the various standards under this Condition, and while conceding that there has been improvement in some aspects, the record as constituted still fails to sustain a conclusion that the medical records of the applicant hospital are maintained in such a professional manner as to be in substantial compliance with this Condition.
(e) Section 405.1027, Regulations No. 5 (20 CFR 405.1027) requires that the applicant hospital have a pharmacy directed by a registered pharmacist or, in the alternative, a drug room under competent supervision, either of which is to be administered in accordance with accepted professional principles.
A small institution such as the applicant cannot afford and is not required to have a full-time pharmacist. There appears to be no reason why it could not afford the services of the local druggist as a consulting pharmacist for the purpose of drawing procedures, rules and regulations for the drug room. It is not enough merely to set aside space for a drug room and put a lock on the premises. Numerous factors are involved in the issue and use of drugs and such factors require professionally drawn and established procedures of such particularity that risks of misuse are reduced to the barest minimum.
From the evidence, it appears that the Administrator of the hospital is left to her own resources, without professional medical or pharmaceutical advice, to devise the procedures for control and use of drugs. The procedures governing operation of the drug room and the administration of drugs appear to lack the formality and preciseness necessary to ensure against hazards to the safety and health of the patients, as contemplated by the law and pertinent regulations.
Based on all the facts, the applicant institution does not meet the statutory definition of "hospital" in section 1861(e) of the Act, quoted above, nor is it in substantial compliance with all of the conditions of participation set out in Subpart J. Regulations No. 5 of the Social Security Administration. It is accordingly held, that the X Community Hospital is not now entitled to certification as a provider of hospital services under the provisions of title XVIII of the Act and Regulations No. 5 of the Social Security Administration.