[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 80111-80113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27354]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS- 1758-PN]
Medicare Program; Request for an Exception to the Prohibition on
Expansion of Facility Capacity Under the Hospital Ownership and Rural
Provider Exceptions to the Physician Self-Referral Prohibition
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice with request for comment.
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SUMMARY: The Social Security Act prohibits a physician-owned hospital
from expanding its facility capacity, unless the Secretary of the
Department of Health and Human Services grants the hospital's request
for an exception to that prohibition after considering input on the
hospital's request from individuals and entities in the community where
the hospital is located. The Centers for Medicare & Medicaid Services
has received a request from a physician-owned hospital for an exception
to the prohibition against expansion of facility capacity. This notice
solicits comments on the request from individuals and entities in the
community in which the physician-owned hospital is located. Community
input may inform our determination regarding whether the requesting
hospital qualifies for an exception to the prohibition against
expansion of facility capacity.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on January 11, 2021.
ADDRESSES: In commenting, refer to file code CMS-1758-PN.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1758-PN, P.O. Box 8010,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1758-PN, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Patricia Taft at 410-786-4561 or Joi
Hosley at 410-786-2194; [email protected].
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: http://www.regulations.gov. Follow the search instructions on
that website to view public comments. CMS will not post on
Regulations.gov public comments that make threats to individuals or
institutions or suggest that the individual will take actions to harm
the individual. CMS continues to encourage individuals not to submit
duplicative comments. We will post acceptable comments from multiple
unique commenters even if the content is identical or nearly identical
to other comments.
I. Background
Section 1877 of the Social Security Act (the Act), also known as
the physician self-referral law-- (1) prohibits a physician from making
referrals for certain designated health services payable by Medicare to
an entity with which he or she (or an immediate family member) has a
financial relationship, unless the requirements of an applicable
exception are satisfied; and (2) prohibits the entity from filing
claims with Medicare (or billing another individual, entity, or third
party payer) for any improperly referred designated health services. A
financial relationship may be an ownership or investment interest in
the entity or a compensation arrangement with the entity. The statute
establishes a number of specific exceptions and grants the Secretary of
the Department of Health and Human Services (the Secretary) the
authority to create regulatory exceptions for financial relationships
that do not pose a risk of program or patient abuse.
Section 1877(d) of the Act sets forth exceptions related to
ownership or investment interests held by a physician (or an immediate
family member of a physician) in an entity that furnishes designated
health services. Section 1877(d)(2) of the Act provides an exception
for ownership or investment interests in rural providers (the ``rural
provider exception''). In order to qualify for the rural provider
exception, the designated health services must be furnished in a rural
area (as defined in section 1886(d)(2) of the Act) and substantially
all the designated health services furnished by the entity must be
furnished to individuals residing in a rural area, and, in the case
where the entity is a hospital, the hospital meets the requirements of
section 1877(i)(1) of the Act no later than September 23, 2011. Section
1877(d)(3) of the Act provides an exception for ownership or investment
interests in a hospital located outside of Puerto Rico (the ``whole
hospital exception''). In order to qualify for the whole hospital
exception, the referring physician must be authorized to perform
services at the hospital, the ownership or investment interest must be
in the hospital itself (and not merely in a subdivision of the
hospital), and the hospital meets the requirements of section
1877(i)(1) of the Act no later than September 23, 2011.
II. Prohibition on Facility Expansion
Section 6001(a)(3) of the Patient Protection and Affordable Care
Act (Affordable Care Act) (Pub. L. 111-148) amended the rural provider
and whole hospital exceptions to provide that a hospital may not
increase the number of operating rooms, procedure rooms, and beds
beyond that for which the hospital was licensed on March 23, 2010 (or,
in the case of a hospital that did not have a provider agreement in
effect as of this date, but did have a provider agreement in effect on
December 31, 2010, the effective date of such provider agreement).
Thus, since March 23, 2010, a physician-owned hospital that seeks to
avail itself of either exception is
[[Page 80112]]
prohibited from expanding facility capacity unless it qualifies as an
``applicable hospital'' or ``high Medicaid facility'' (as defined in
sections 1877(i)(3)(E), (F) of the Act and 42 CFR 411.362(c)(2), (3) of
our regulations) and has been granted an exception to the prohibition
by the Secretary. Section 6001(a)(3) of the Affordable Care Act added
new section 1877(i)(3)(A)(i) of the Act, which required the Secretary
to establish and implement an exception process to the prohibition on
expansion of facility capacity for hospitals that qualify as an
``applicable hospital.'' Section 1106 of the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) amended section
1877(i)(3)(A)(i) of the Act to require the Secretary to establish and
implement an exception process to the prohibition on expansion of
facility capacity for hospitals that qualify as either an ``applicable
hospital'' or a ``high Medicaid facility.'' These terms are defined at
sections 1877(i)(3)(E) and 1877(i)(3)(F) of the Act.
The requirements for qualifying as an applicable hospital are set
forth at Sec. 411.362(c)(2) and the requirements for qualifying as a
high Medicaid facility are set forth at Sec. 411.362(c)(3). An
applicable hospital means a hospital: (1) That is located in a county
in which the percentage increase in the population during the most
recent 5-year period (as of the date that the hospital submits its
request for an exception to the prohibition on expansion of facility
capacity) is at least 150 percent of the percentage increase in the
population growth of the State in which the hospital is located during
that period, as estimated by the Bureau of the Census; (2) whose annual
percent of total inpatient admissions under Medicaid is equal to or
greater than the average percent with respect to such admissions for
all hospitals in the county in hospital is located during the most
recent 12-month period for which data are available (as of the date
that the hospital submits its request for an exception to the
prohibition on expansion of facility capacity); (3) that does not
discriminate against beneficiaries of federal health care programs and
does not permit physicians practicing at the hospital to discriminate
against such beneficiaries; (4) that is located in a state in which the
average bed capacity in the state is less than the national average bed
capacity; and (5) that has an average bed occupancy rate that is
greater than the average bed occupancy rate in the State in which the
hospital is located. The regulations at Sec. 411.362(c)(2)(ii), (iv),
and (v) specify acceptable data sources for determining whether a
hospital qualifies as an applicable hospital. A ``high Medicaid
facility'' means a hospital that--(1) is not the sole hospital in a
county; (2) with respect to each of the three most recent 12-month
periods for which data are available, has an annual percent of total
inpatient admissions under Medicaid that is estimated to be greater
than such percent with respect to such admissions for any other
hospital located in the county in which the hospital is located; and
(3) does not discriminate against beneficiaries of federal health care
programs and does not permit physicians practicing at the hospital to
discriminate against such beneficiaries. Section 411.362(c)(3)(ii)
specifies the acceptable data sources for determining whether a
hospital qualifies as a high Medicaid facility. On November 30, 2011,
we published the CY 2012 OPPS/ASC final rule in the Federal Register,
which set forth the process for a hospital to request an exception from
the prohibition on facility expansion (the exception process) at Sec.
411.362(c) and related definitions Sec. 411.362(a) (76 FR 74122).
Section 1877(i)(3)(A)(ii) of the Act provides that individuals and
entities in the community in which the provider requesting the
exception is located must have an opportunity to provide input with
respect to the provider's application for the exception. For further
information, we refer readers to the CMS website at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html.
III. Exception Request Process
On November 30, 2011, we published a final rule in the Federal
Register (76 FR 74122, 74517 through 74525) that, among other things,
finalized Sec. 411.362(c), which specified the process for submitting,
commenting on, and reviewing a request for an exception to the
prohibition on expansion of facility capacity. We published a
subsequent final rule in the Federal Register on November 10, 2014 (79
FR 66770) that made certain revisions. These revisions include, among
other things, permitting the use of data from an external data source
or data from the Hospital Cost Report Information System (HCRIS) for
specific eligibility criteria.
As stated in regulations at Sec. 411.362(c)(5), we will solicit
community input on the request for an exception by publishing a notice
of the request in the Federal Register. Individuals and entities in the
hospital's community will have 30 days to submit comments on the
request. Community input must take the form of written comments and may
include documentation demonstrating that the physician-owned hospital
requesting the exception does or does not qualify as an applicable
hospital or high Medicaid facility as such terms are defined in Sec.
411.362(c)(2) and (3).
In the November 30, 2011 final rule (76 FR 74522), we gave examples
of community input, such as documentation demonstrating that the
hospital does not satisfy one or more of the data criteria or that the
hospital discriminates against beneficiaries of Federal health
programs. However, we noted that these were examples only and that we
will not restrict the type of community input that may be submitted. If
we receive timely comments from the community, we will notify the
hospital, and the hospital will have 30 days after such notice to
submit a rebuttal statement (Sec. 411.362(c)(5)).
A request for an exception to the facility expansion prohibition is
considered complete as follows:
If the request, any written comments, and any rebuttal
statement include
only HCRIS data: (1) The end of the 30-day comment period if the
Centers for Medicare & Medicaid Services (CMS) receives no written
comments from the community; or (2) the end of the 30-day rebuttal
period if CMS receives written comments from the community, regardless
of whether the physician-owned hospital submitting the request submits
a rebuttal statement (Sec. 411.362(c)(5)(i)).
If the request, any written comments, or any rebuttal
statement include data from an external data source, no later than: (1)
180 Days after the end of the 30-day comment period if CMS receives no
written comments from the community; and (2) 180 days after the end of
the 30-day rebuttal period if CMS receives written comments from the
community, regardless of whether the physician-owned hospital
submitting the request submits a rebuttal statement (Sec.
411.362(c)(5)(ii)).
If we grant the request for an exception to the prohibition on
expansion of facility capacity, under our current regulations, the
expansion may occur only in facilities on the hospital's main campus
and may not result in the number of operating rooms, procedure rooms,
and beds for which the hospital is licensed to exceed 200 percent of
the hospital's baseline number of operating rooms, procedure rooms, and
beds (Sec. 411.362(c)(6)). The CMS decision to
[[Page 80113]]
grant or deny a hospital's request for an exception to the prohibition
on expansion of facility capacity must be published in the Federal
Register in accordance with our regulations at Sec. 411.362(c)(7).
IV. Hospital Exception Request
As permitted by section 1877(i)(3) of the Act and our regulations
at Sec. 411.362(c), the following physician-owned hospital has
requested an exception to the prohibition on expansion of facility
capacity:
Name of Facility: Solutions Medical Consulting, LLC d/b/a Serenity
Springs Hospital
Location: 1495 Frazier Road, Ruston, Louisiana 71270-1632
Basis for Exception Request: High Medicaid Facility
We seek comments on this request from individuals and entities in
the community in which the hospital is located. We encourage interested
parties to review the hospital's request, which is posted on the CMS
website at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html. We solicit public
comments regarding whether the hospital qualifies as a high Medicaid
facility. Under Sec. 411.362(c)(3), a high Medicaid facility is a
hospital that satisfies all of the following criteria:
Is not the sole hospital in the county in which the
hospital is located.
With respect to each of the 3 most recent 12-month periods
for which data are available as of the date the hospital submits its
request, has an annual percent of total inpatient admissions under
Medicaid that is estimated to be greater than such percent with respect
to such admissions for any other hospital located in the county in
which the hospital is located.
Does not discriminate against beneficiaries of Federal
health care programs and does not permit physicians practicing at the
hospital to discriminate against such beneficiaries.
Individuals and entities wishing to submit comments on the
hospital's request should review the ``DATES'' and ``ADDRESSES''
sections above and state whether or not they are in the community in
which the hospital is located.
V. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
VI. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
The Administrator of the Centers for Medicare & Medicaid Services
(CMS), Seema Verma, having reviewed and approved this document,
authorizes Lynette Wilson, who is the Federal Register Liaison, to
electronically sign this document for purposes of publication in the
Federal Register.
Dated: December 8, 2020.
Lynette Wilson,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
[FR Doc. 2020-27354 Filed 12-10-20; 8:45 am]
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