Addressing Common Misconceptions Regarding Waivers and Equivalencies

There has been much confusion and differing of opinions regarding the process to submit waiver and equivalency requests, and once they have been approved, how long they are valid. The Centers for Medicare & Medicaid Services (CMS) recently implemented new procedures that resulted in changes on how the accreditation organizations processed waiver and equivalency requests.

Up until a couple of years ago, CMS always said that approved waivers are only valid for 1-year. After the 1-year cycle, the federal agency wanted hospitals to resubmit their waiver request for another 1-year cycle. When Det Norske Vertitas (DNV) came on the scene in 2008 or so, CMS told them straight out-of-the-box that DNV cannot approve waivers or equivalencies. DNV would be required to send them to the appropriate CMS Regional Office for approval. DNV was okay with that because they wanted deeming authority, so they complied. The odd thing though, CMS did not inform Healthcare Facilities Accreditation Program (HFAP) or The Joint Commission of the same policy at that time.

Joint Commission and HFAP always recognized that CMS was the only entity that could approve waivers, but these two accreditors always considered equivalencies as different animals and were not considered to be waivers. It was always understood that the difference between a waiver and an equivalency is a waiver is requesting a specific Life Safety Code requirement to be ‘waived’ and the hospital would not have to comply with it due to significant hardships. An equivalency does not ‘waive’ any Life Safety Code requirements, but instead analyzes surrounding features of fire-safety and assigns numerical values. The numerical values are run through a formula and if the result is a positive number then that confirms there is a equivalent level of safety even with the Life Safety Code deficiency. This concept is supported by section 1.4.3 of the 2012 Life Safety Code. But CMS never saw it the same way and decided an equivalency is similar to a waiver, and needs to be processed the same. Therefore, only they (CMS) could approve equivalencies.

In 2012 CMS notified HFAP that they can no longer approve equivalencies, and CMS wanted HFAP to submit the waiver/equivalency requests to the appropriate CMS Regional Office for approval, just like DNV. But, for reasons known only to them, it wasn’t until July, 2014, that CMS got around to telling Joint Commission the same rules. Joint Commission agreed to discontinue approving equivalencies and would forward them on to the appropriate CMS Regional Office. So, for the first time since 2008, the big three accreditors for hospitals (Joint Commission, DNV and HFAP) were all on the same page and on a level playing ground regarding the approval process for equivalencies. But immediately, there was confusion; not the least of which the CMS Regional Offices were not prepared to handle the influx of the paper requests for waivers and equivalencies. Some of the busier Regional Offices started to misplace the equivalency requests, which meant the hospitals would have to resubmit them. Most of the accreditors required the equivalencies to be submitted on paper rather than electronically because the equivalencies required drawings of the facility, and at that time electronic files of drawings were not easily read without CAD software. That led to large, bulky paper submissions, which were easily misplaced.

By 2015, CMS took action to resolve the serious problem concerning misplaced copies of waiver and equivalency requests, so they contracted with Healthcare Management Solutions (HMS), a vendor, to create an electronic process to accept waiver and equivalency requests and track their progress through the approval process. In May, 2015 HMS unveiled a rather slick and easy process to the accreditors called Sharepoint, whereby the accreditors can submit waiver and equivalency requests electronically from their clients to HMS. Representatives from HMS will review the submissions to ensure that significant information is included, and once they consider it to be an acceptable submission, they will then send it electronically to the appropriate CMS Regional Office for review and approval. At this time (in May, 2015), they submitted a 6-page document to the AOs explaining the process for waivers and equivalencies to be submitted and approved. Highlights of this document says:

  1. Only CMS Regional Offices can approve waivers and equivalencies.
  2. Waiver and equivalency requests will only be considered for existing Life Safety code deficiencies; they will not consider a request if the deficiency has not been cited by the accreditor. (This is contrary to the way that Joint Commission and HFAP operated, as they would approve equivalencies prior to the Life Safety Code deficiency being cited.)
  3. The hospital will submit their waiver or equivalency request directly to their accreditation organization as part of their Plan of Correction to resolve a deficiency cited during a survey.
  4. If the AO agrees with the hospital’s request for a waiver or an equivalency, then they submit the request electronically along with a cover letter recommending approval to the HMS Sharepoint. If the AO does not agree with the request made by the hospital, then they simply do not submit the request to HMS Sharepoint, and the request is effectively denied. This allows the AOs a right of first-denial.
  5. Once the request submission meets the requirements, then HMS sends it on to the appropriate CMS Regional Office. Originally, CMS said they expected the Regional Offices to approve or disapprove requests within 30 days, but that has not always been the case as the influx of waiver and equivalency requests has created a back-log.
  6. The CMS Regional Office decides whether or not to approve the waiver/equivalency request and they make their decision in writing and inform the hospital and the AO of their decision. If they approve the request, it is only valid until the next triennial survey whereby if the deficiency is not resolved at that time, it will be cited again. If they deny the request, the hospital must submit an alternative Plan of Correction to resolve the deficiency.

In addition, when the CMS Regional Office sends a letter of approval to the hospital, they include language that says: “If you are not in compliance with the above requirements at the time of your next survey, you will be required to either submit a plan to correct deficiencies or renew your request for waiver, in order to continue your participation on the Medicare program.” This reinforces the CMS position that waivers and equivalencies are only valid until the next survey.

Since an approved waiver or equivalency is only valid until the next survey, that implies the waiver or equivalency is a short-term, temporary process. This is different than what used to be considered in the past. CMS now allows waiver requests to extend up to 3 years, rather than 1-year; and approved equivalencies are now limited to no more than 3 years, rather than indefinitely or until there is renovation in the area as Joint Commission and HFAP used to allow. Hospitals started to change their strategy and submitted more waiver request rather than equivalencies since equivalencies cost more resources to prepare.

CMS will allow a time-limited waiver request which is essentially the hospital requesting permission to continue to operate the facility with the cited Life Safety Code deficiency for a short-period of time until the hospital can either resolve the deficiency or implement other measures to qualify for an equivalency. CMS has stated that if a hospital cannot resolve a Life Safety deficiency within 60 days of the end of the survey, then they would expect the hospital to submit a time-limited waiver request.

You may wonder why CMS has not issued a public notice explaining the changes with the waiver and equivalency requests. I don’t know for sure, but I suspect it may be that they really don’t see that there have been any significant changes on their part to explain. Other than the HMS Sharepoint process which is really a private conversation between the CMS and the AOs, the statement that the waivers and equivalencies are only valid until the next survey has always been the case with CMS. It really was the Joint Commission and HFAP that had different procedures and allowed equivalencies to be valid indefinitely or until there was renovation in the area. Once CMS got those two AOs to stop approving equivalencies, then everything else fell into place.