Notice2025-02441
Medicare Program; Announcement of Request for an Exception From the Prohibition on Expansion of Facility Capacity Under the Hospital Ownership and Rural Provider Exceptions to the Physician Self-Referral Prohibition
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 11, 2025
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
The Social Security Act prohibits a hospital with physician ownership that relies on the exception to the physician self-referral law for hospitals outside of Puerto Rico or for rural providers from expanding its facility capacity unless the Secretary of the Department of Health and Human Services grants the hospital's request for an exception from that prohibition after considering input on the 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 hospital with physician ownership for an exception from the prohibition on expansion of facility capacity. This notice solicits comments on the request from individuals and entities in the community in which the hospital is located. Community input may inform our decision to approve or deny the hospital's request for an exception from the prohibition on expansion of facility capacity.
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 27 (Tuesday, February 11, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 27 (Tuesday, February 11, 2025)]
[Notices]
[Pages 9343-9345]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-02441]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1838-PN]
Medicare Program; Announcement of Request for an Exception From
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.
-----------------------------------------------------------------------
SUMMARY: The Social Security Act prohibits a hospital with physician
ownership that relies on the exception to the physician self-referral
law for hospitals outside of Puerto Rico or for rural providers from
expanding its facility capacity unless the Secretary of the Department
of Health and Human Services grants the hospital's request for an
exception from that prohibition after considering input on the 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 hospital with physician ownership for an exception from
the prohibition on expansion of facility capacity. This notice solicits
comments on the request from individuals and entities in the community
in which the hospital is located. Community input may inform our
decision to approve or deny the hospital's request for an exception
from the prohibition on expansion of facility capacity.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below by April 14, 2025.
ADDRESSES: In commenting, refer to file code CMS-1838-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
notice to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. 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-1838-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-1838-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: <a href="/cdn-cgi/l/email-protection#98c8d7d0b5dde0fbfde8ecf1f7f6cafde9edfdebecebd8fbf5ebb6f0f0ebb6fff7ee"><span class="__cf_email__" data-cfemail="2f7f6067026a574c4a5f5b4640417d4a5e5a4a5c5b5c6f4c425c0147475c01484059">[email protected]</span></a>. Joi
Hosley, (410) 786-2194.
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: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the search instructions on that website to
view public comments. CMS will not post on <a href="https://www.regulations.gov">https://www.regulations.gov</a>
public comments that make threats to individuals or institutions or
suggest that the commenter will take actions to harm an individual. CMS
encourages commenters 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
[[Page 9344]]
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''). To satisfy the requirements of 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 of 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 must meet 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''). To satisfy the
requirements of 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 must meet the
requirements of section 1877(i)(1) of the Act no later than September
23, 2011.
II. Prohibition on Expansion of Facility Capacity
Section 6001(a)(3) of the Patient Protection and Affordable Care
Act (Affordable Care Act) (Pub. L. 111-148) amended section 1877 of the
Act, by adding the requirements in section 1877(i) of the Act for a
hospital to qualify for the rural provider and whole hospital
exceptions, including that the 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) unless the Secretary grants
an exception from the prohibition on facility expansion. We refer to
this prohibition herein as the ``prohibition on facility expansion.''
Section 1877(i)(3)(A)(i) of the Act requires the Secretary to establish
and implement a process under which a hospital that is an ``applicable
hospital'' (as defined at section 1877(i)(3)(E) of the Act) or a ``high
Medicaid facility'' (as defined at section 1877(i)(3)(F) of the Act)
may apply for an exception from the prohibition on facility expansion.
The process for requesting an exception from the prohibition on
facility expansion is discussed in section III. below.
The criteria that a hospital must meet to be an applicable hospital
are set forth at Sec. 411.363(c). An applicable hospital: (1) is
located in a county that has a percentage increase in the population
that is at least 150 percent of the percentage increase in population
of the State in which the hospital is located during the most recent 5-
year period for which data are available as of the date that the
hospital submits its request, as estimated by the Bureau of the Census;
(2) has an annual percent of total inpatient admissions under Medicaid
that is equal to or greater than the average percent with respect to
such admissions for all hospitals (including the requesting hospital)
that have Medicare participation agreements with CMS and are located in
the county in which the 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; (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; (4) is located in a State in which the average bed
capacity in the State is less than the national average bed capacity
during the most recent fiscal year for which the Healthcare Cost Report
Information System (HCRIS), as of the date that the hospital submits
its request, contains data from a sufficient number of hospitals to
determine a State's average bed capacity and the national average bed
capacity; and (5) has an average bed occupancy rate that is greater
than the average bed occupancy rate in the State in which the hospital
is located during the most recent fiscal year for which HCRIS, as of
the date that the hospital submits its request, contains data from a
sufficient number of hospitals to determine the requesting hospital's
average bed occupancy rate and the relevant State's average bed
occupancy rate. The regulation at Sec. 411.363(c)(2) and (c)(5)(i)
specify acceptable data sources for determining whether a hospital
meets the criteria for an applicable hospital.
The criteria that a hospital must meet to be a high Medicaid
facility are set forth at Sec. 411.363(d). A high Medicaid facility:
(1) is not the sole hospital in the county in which the hospital is
located; (2) with respect to each of the three 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 each other hospital that
has a Medicare participation agreement with CMS and is 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. The regulation at Sec. 411.363(d)(2) specifies the
acceptable data source for determining whether a hospital meets the
criteria for a high Medicaid facility.
III. Expansion Exception Process
The process for requesting an exception from the prohibition on
facility expansion (also referred to as ``expansion exception request''
or ``request'' for purposes of this notice) is set forth at Sec.
411.363 and addresses the procedure for submitting a request, community
input, the timing of a complete request, the determination that a
hospital is an applicable hospital or a high Medicaid facility, and
CMS' decision to approve or deny a request. CMS takes a two-step
approach to considering expansion exception requests. First, CMS will
determine whether the requesting hospital meets the criteria for an
applicable hospital or a high Medicaid facility using the information
provided by the hospital in its expansion exception request and
rebuttal statement, if any, and the community input, if any. Second,
using data and information provided from these sources, as well as any
other data and information that is relevant to its decision, CMS will
decide whether to approve or deny the expansion exception request.
Individuals and entities in the hospital's community may provide
input with respect to the hospital's request for an exception from the
prohibition on facility expansion,
[[Page 9345]]
including, but not limited to, input regarding whether the hospital
meets the criteria for an applicable hospital or a high Medicaid
facility and the factors that CMS will consider in deciding whether to
approve or deny the hospital's expansion exception request. Community
input must be in the form of written comments, submitted according to
the instructions in this Federal Register notice, and be received no
later than 60 days after the publication date of this notice in the
Federal Register. If CMS receives written comments from the community,
the hospital will have 60 days after CMS notifies the hospital of the
written comments to submit a rebuttal statement.
The hospital's community includes the geographic area served by the
hospital (as defined at Sec. 411.357(e)(2)) and all of the following:
<bullet> The county in which the hospital's main campus is located.
<bullet> The counties in which the hospital provides inpatient or
outpatient hospital services as of the date the hospital submits the
request.
The factors that CMS will consider in deciding whether to approve
or deny a hospital's request for an exception from the prohibition on
facility expansion are set forth at Sec. 411.363(i)(2) and include,
but are not limited to, the following:
<bullet> The specialty (for example, maternity, psychiatric, or
substance use disorder care) of the hospital or the services furnished
by or to be furnished by the hospital if CMS approves the request.
<bullet> Program integrity or quality of care concerns related to
the hospital.
<bullet> Whether the hospital has a need for additional operating
rooms, procedure rooms, or beds.
<bullet> Whether there is a need for additional operating rooms,
procedure rooms, or beds in the county in which the main campus of the
hospital is located or in any county in which the hospital provides
inpatient or outpatient hospital services as of the date the hospital
submits the request.
If CMS determines that the requesting hospital does not meet the
criteria for an applicable hospital or a high Medicaid facility, CMS
will publish in the Federal Register notice of such determination. If
CMS determines that the hospital meets the criteria for an applicable
hospital or a high Medicaid facility, CMS will publish in the Federal
Register notice of such determination and its decision regarding the
hospital's request for an exception from the prohibition on facility
expansion.
IV. Hospital's Expansion Exception Request
As permitted by section 1877(i)(3) of the Act and our regulations
at Sec. 411.363, the following hospital with physician ownership has
requested an exception from the prohibition on facility expansion:
Name of Facility: Mountain View Hospital.
Location: 2325 Coronado Street, Idaho Falls, Idaho 83404.
Basis for this Expansion 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 parties
that wish to have their input considered to address how they are part
of the requesting hospital's community in their submissions. We also
encourage interested parties review the hospital's request, which is
posted on the CMS website at <a href="https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html">https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html</a>. We
especially welcome comments regarding whether the hospital meets the
criteria for a high Medicaid facility and the factors that CMS will
consider in deciding whether to approve or deny the hospital's request
for an exception from the prohibition on facility expansion.
We suggest that parties review the DATES and ADDRESSES sections of
this notice to ensure timely submission of their comments.
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
We will consider all comments we receive by the date and time
specified in the DATES section of this preamble.
The Acting Administrator of the Centers for Medicare & Medicaid
Services (CMS), Stephanie Carlton, having reviewed and approved this
document, authorizes Vanessa Garcia, who is the Federal Register
Liaison, to electronically sign this document for purposes of
publication in the Federal Register.
Vanessa Garcia,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
[FR Doc. 2025-02441 Filed 2-10-25; 8:45 am]
BILLING CODE 4120-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on February 11, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.