Filling Out the Forms

When establishing a chronic end-stage renal disease dialysis facility, owners must concern themselves with a myriad of federal and state licensing, registration and certification requirements. The failure to obtain and maintain applicable licenses, registrations and certifications may preclude the facility from operating in a given jurisdiction or from receiving reimbursement for covered services provided to Medicare beneficiaries. A few of the most common licenses, registrations and certifications applicable to a dialysis facility are discussed below.

Certificate of Need

A threshold issue for facility owners is whether a certificate of need (CON)—essentially a permit—is required in a given jurisdiction to establish, construct or modify a facility. Such programs were once a federal mandate of all states in 1974 to control inflation of healthcare costs, prevent unnecessary duplication of healthcare services and improve quality of care. However, CON programs of some type are now requirements in only 36 states. CON programs are managed by the departments of public health in each of those jurisdictions. Of those 36 states, approximately 13 regulate dialysis facilities.

CON programs are extremely controversial. Proponents of the programs espouse the necessity of the programs in order to minimize excess capacity, which if not regulated would result in healthcare price inflation. Opponents of the programs believe they are anti-competitive, as they create barriers to entry and expansion, and that the lack of competition in fact results in increased healthcare costs.

In Illinois, the Health Facilities Planning Board, under the Department of Public Health, is responsible for Illinois’ CON program and evaluates CON applications. Theoretically, the permits are granted based upon an objective assessment of community needs, and the best proposals are selected among competing applicants. Review criteria for new freestanding facilities include financial and economic feasibility, in addition to the existence or establishment of data systems, minimum facility—size (number of stations), availability of support services (e.g., clinical and pathology laboratory services, blood bank, nutrition, rehabilitation, psychiatric and social services and self-dialysis support services), existence of affiliation agreements, and the provision of self-care and home dialysis training.

Facility Licensing

In addition to a CON to establish a facility, certain jurisdictions—Alabama, Oregon, Maine, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Mexico, Tennessee, Texas and Wyoming, to name a few —also require a facility to be separately licensed in order to operate.

For example, in Illinois, unless exempted, no person can open, manage, conduct, offer or maintain a facility without a valid license from the Illinois Department of Public Health. While the Illinois End-Stage Renal Disease Facility Act became effective in June 2003, as of this date, regulations promulgating the Act have not yet been implemented. It is anticipated the regulations will be promulgated once the revised Medicare Conditions for Coverage for Facilities are issued.

Under most facility licensing statutes, dialysis clinics must meet certain minimum staffing requirements and minimum standards with respect to qualifications and supervision of professional staff and other personnel, training of technicians, equipment, sanitary and hygienic conditions, quality assurance, clinical records, design and space requirements, and water treatment and reuse, all of which are substantially equivalent to and consistent with the minimum standards found in the Medicare Conditions for Coverage. In addition, licensed facilities are also subject to unannounced inspections and reporting requirements.

Laboratory Services

Existing Medicare Conditions for Coverage require facilities to make available laboratory services (other than tissue pathology and histocompatibility) to meet the needs of its patients. Facilities must be certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) to perform and bill most laboratory tests to Medicare. Facilities not directly providing laboratory services must make arrangements with a CLIA- certified laboratory or Medicare certified hospital.

The Center for Medicare & Medicaid Services (CMS) regulates nearly all laboratory testing (except forensic or research testing) performed on human specimens in the United States through CLIA, which are based on a complexity model, with more complicated testing subject to more stringent personnel and quality management requirements. The three categories of testing for CLIA purposes are: waived, moderate complexity and high complexity. Facilities may not bill Medicare for laboratory services that are not within their CLIA approved scope of complexity. Facilities providing laboratory services must be CLIA-exempt (resulting from the facility’s laboratory services being certified by a state whose laws regulating laboratories are more stringent than CLIA requirements), or must have been issued a registration certificate, waiver certificate, certificate of compliance, or certificate of accreditation (resulting from the facility’s laboratory services being accredited by a CMS-approved accreditation organization).

Certain routine procedures furnished by facilities, such as HIV or hematocrit, are classified as CLIA "waived" tests. Other non-emergency procedures performed by a facility or made available through arrangements, such as serum proteins, serum immunoglobulins, CPK, SGPT, and hepatitis B surface antigen testing are moderate to high complexity tests.

In addition to CLIA, facility owners must concern themselves with state statutes that license laboratories. For example, in Illinois, the Department of Public Health through the Illinois Clinical Laboratory and Blood Bank Act and its regulations, requires facilities to obtain a license or permit to conduct certain laboratory procedures, even exempt tests and procedures. If a facility will send specimens outside of Illinois for examination, the out-of-state laboratory must be licensed by the Department of Public Health and its director must meet certain minimum experience, training and educational qualifications.

Medicare Certification

Facilities must be Medicare certified in order to bill and receive Medicare reimbursement for covered services provided to Medicare beneficiaries. The release of the long- anticipated revised health and safety requirements—Conditions for Coverage—facilities must meet to be certified under the Medicare program have been delayed by CMS until February 2009. The revised requirements will be the first wholesale revision to the regulations since 1976. The new Conditions for Coverage will revise or eliminate many of the existing requirements. Proposed to be eliminated are many of the nearly 20 conditions addressing organizational structure, utilization rate requirements, and other process-intensive requirements. Greater emphasis will be placed on patient safety, the results of care provided to patients, establishing performance expectations for facilities, and encouraging greater patient participation in their care plan and treatment.

Perhaps the most anticipated proposed revisions relate to patient safety, patient care and rights and patient assessment.

Patient Safety: significant emphasis is placed on infection control, establishing it as a separate condition for coverage, and going well beyond existing administrative requirements of establishing written procedures for controlling hepatitis and other infections. A facility will have to demonstrate that it follows minimum acceptable infection control precautions to prevent and control cross-contamination and the spread of infectious agents. Precautions like those in the Centers for Disease Control and Prevention’s "Recommended Infection Control Practices for Hemodialysis Units At a Glance" (except for blanket monthly and semiannual Hepatitis C screening for all hemodialysis patients). This proposed condition also contemplates patient isolation for hepatitis B surface antigen positive patients. Newly opened hemodialysis units will be required to have separate isolation rooms for hepatitis B patients as described in "At a Glance." For existing units, where separate isolation rooms are not possible, the proposal contemplates the establishment of a dedicated area out of the mainstream within the facility with dedicated staff and dedicated dialysis machines. Infection control oversight will be required to provide structure and accountability for infection control. A facility will have to designate a registered nurse as the infection control or safety officer who maintains current infection control information, and reports to the facility’s chief executive officer or administrator and quality improvement committee. The infection control nurse will be required to maintain current infection control information, including the most current CDC guidelines, for the proper techniques in the use of vials and ampules containing medication.

Patient Care and Rights: Significant revisions are proposed in this area, and designed to be more outcome oriented while protecting patients’ rights. A facility will be required to inform patients (or their representatives) of their rights and responsibilities when they begin their treatment at the facility, and will also be required to protect and provide for the exercise of those rights. Patients rights must be posted prominently where they can be read and seen and must include telephone numbers for the appropriate ESRD Network and state survey agency.

Information must be provided to patients in an understandable manner. Privacy and confidentiality will be extended to all aspects of patient’s treatment and medical records. Any staff discussions with dialysis patients or relatives regarding treatment, the patient care plan, and medical conditions will be required to be held in private, kept confidential and spoken at a volume and at a proximity to patients such that privacy will be reasonably protected. Facility staff will have to make efforts to protect patient information and physical privacy, which may include the use of temporary screens, curtains or blankets. Patients will also be required to be informed of their right to participate in all aspects of their care, to establish an advance directive, and be informed about alternative treatment modalities beyond simply informing patients of their suitability for transplantation or home dialysis. Patients will also be informed of the facility’s patient-care policies, including its patient isolation policies. The revisions also propose strengthening the existing requirement for facilities to inform patients regarding the various external grievance mechanisms available to them, including how to contact the ESRD Network and the state survey agency, and how to file external grievances without reprisal or denial of services, through a representative chosen by the patient or anonymously (if so desired).

Patient Assessment: A comprehensive patient assessment will be required through the patient’s interdisciplinary team, responsible for providing each of its patients with an individualized and comprehensive assessment of his or her needs. The interdisciplinary team would include the patient (if he or she chooses, or if not, the patient’s representative), a registered nurse, a physician, a social worker and a registered dietitian. Minimum elements of a patient’s assessment contemplated focus not only on the patient’s medical needs, but also on his or her psychosocial and rehabilitation needs.

Not only must the facility be Medicare certified, the facility’s individual physicians or group practice must also enrolled in Medicare. To enroll in Medicare, a physician must submit to a Medicare carrier CMS Form 855I, Application for Individual Healthcare Practitioner. A group practice must submit to a Medicare carrier CMS Form 855B, Application for Healthcare Suppliers that will bill Medicare. Once enrolled, individual physicians must join their group practice for Medicare participation by submitting to a Medicare carrier CMS Form 855R, Individual Reassignment of Benefits.

Conclusion

The registration, licensing and certification requirements discussed above are certainly not all exhaustive. There are a host of other requirements that facility owners must comply with. For instance, facility owners must also concern themselves with registering with the jurisdiction’s medical licensing board the licensed medical staff to practice medicine as a group practice. If a separate employee leasing company will be used for the allied health professionals and other support staff, the employee leasing company may require registration as an employee leasing company with the jurisdiction’s Department of Insurance. A jurisdiction may also require the facility to register under its applicable environmental protection statutes as a result of creating, treating, storing or disposing of potentially infectious medical waste. As each jurisdiction varies with respect to its licensing registration and certification requirements, facility owners are well advised to sit with their professional advisors to ensure that all requirements are covered.

Andrés J. Gallegos, Esq., is a corporate and healthcare law partner at Robbins, Salomon & Patt, Ltd. in Chicago. Gallegos serves as corporate counsel and advisor to a number of chronic and acute independent dialysis facilities, facility management companies, employee leasing companies and facility (real estate) holding companies. Gallegos can be reached at (312) 456-0381 or at agallegos@rsplaw.com.