[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR485.56]

[Page 582-583]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                 HEALTH AND HUMAN SERVICES--(Continued)
 
PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS--Table of Contents
 
    Subpart B--Conditions of Participation: Comprehensive Outpatient 
                        Rehabilitation Facilities
 
Sec. 485.56  Condition of participation: Governing body and administration.

    The facility must have a governing body that assumes full legal 
responsibility for establishing and implementing policies regarding the 
management and operation of the facility.
    (a) Standard: Disclosure of ownership. The facility must comply with 
the provisions of part 420, subpart C of this chapter that require 
health care providers and fiscal agents to disclose certain information 
about ownership and control.
    (b) Standard: Administrator. The governing body must appoint an 
administrator who--
    (1) Is responsible for the overall management of the facility under 
the authority delegated by the governing body;
    (2) Implements and enforces the facility's policies and procedures;
    (3) Designates, in writing, an individual who, in the absence of the 
administrator, acts on behalf of the administrator; and
    (4) Retains professional and administrative responsibility for all 
personnel providing facility services.
    (c) Standard: Group of professional personnel. The facility must 
have a group of professional personnel associated with the facility 
that--
    (1) Develops and periodically reviews policies to govern the 
services provided by the facility; and
    (2) Consists of at least one physician and one professional 
representing each of the services provided by the facility.
    (d) Standard: Institutional budget plan. The facility must have an 
institutional budget plan that meets the following conditions:
    (1) It is prepared, under the direction of the governing body, by a 
committee consisting of representatives of the governing body and the 
administrative staff.
    (2) It provides for--
    (i) An annual operating budget prepared according to generally 
accepted accounting principles;
    (ii) A 3-year capital expenditure plan if expenditures in excess of 
$100,000 are anticipated, for that period, for the acquisition of land; 
the improvement of land, buildings, and equipment; and the

[[Page 583]]

replacement, modernization, and expansion of buildings and equipment; 
and
    (iii) Annual review and updating by the governing body.
    (e) Standard: Patient care policies. The facility must have written 
patient care policies that govern the services it furnishes. The patient 
care policies must include the following:
    (1) A description of the services the facility furnishes through 
employees and those furnished under arrangements.
    (2) Rules for and personnel responsibilities in handling medical 
emergencies.
    (3) Rules for the storage, handling, and administration of drugs and 
biologicals.
    (4) Criteria for patient admission, continuing care, and discharge.
    (5) Procedures for preparing and maintaining clinical records on all 
patients.
    (6) A procedure for explaining to the patient and the patient's 
family the extent and purpose of the services to be provided.
    (7) A procedure to assist the referring physician in locating 
another level of care for--patients whose treatment has terminated and 
who are discharged.
    (8) A requirement that patients accepted by the facility must be 
under the care of a physician.
    (9) A requirement that there be a plan of treatment established by a 
physician for each patient.
    (10) A procedure to ensure that the group of professional personnel 
reviews and takes appropriate action on recommendations from the 
utilization review committee regarding patient care policies.
    (f) Standard: Delegation of authority. The responsibility for 
overall administration, management, and operation must be retained by 
the facility itself and not delegated to others.
    (1) The facility may enter into a contract for purposes of 
assistance in financial management and may delegate to others the 
following and similar services:
    (i) Bookkeeping.
    (ii) Assistance in the development of procedures for billing and 
accounting systems.
    (iii) Assistance in the development of an operating budget.
    (iv) Purchase of supplies in bulk form.
    (v) The preparation of financial statements.
    (2) When the services listed in paragraph (f)(1) of this section are 
delegated, a contract must be in effect and:
    (i) May not be for a term of more than 5 years;
    (ii) Must be subject to termination within 60 days of written notice 
by either party;
    (iii) Must contain a clause requiring renegotiation of any provision 
that CMS finds to be in contravention to any new, revised or amended 
Federal regulation or law;
    (iv) Must state that only the facility may bill the Medicare 
program; and
    (v) May not include clauses that state or imply that the contractor 
has power and authority to act on behalf of the facility, or clauses 
that give the contractor rights, duties, discretions, or 
responsibilities that enable it to dictate the administration, 
mangement, or operations of the facility.