[Federal Register Volume 79, Number 211 (Friday, October 31, 2014)]
[Notices]
[Pages 64801-64802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25940]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1615-FN]
Medicare Program; Approval of 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: Final notice.
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SUMMARY: This final notice announces our decision to approve the
request from Lake Pointe Medical Center for an exception to the
prohibition against expansion of facility capacity.
DATES: Effective Date: This notice is effective on October 31, 2014.
FOR FURTHER INFORMATION CONTACT: Patricia Taft, (410) 786-4561 or
Teresa Walden, (410) 786-3755.
SUPPLEMENTARY INFORMATION:
I. Background
Unless the requirements of an applicable exception are satisfied,
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'' (DHS) payable by
Medicare to an entity with which he or she (or an immediate family
member) has a financial relationship (ownership or compensation); and
(2) prohibits the entity from filing claims with Medicare (or billing
any individual, third party payer, or other entity) for those DHS
furnished as a result of a prohibited referral. Section 1877(d)(3) of
the Act provides an exception, known as the ``whole hospital
exception,'' for physician ownership or investment interests held in a
hospital located outside of Puerto Rico, provided that the referring
physician is authorized to perform services at the hospital and the
ownership or investment interest is in the hospital itself (and not
merely in a subdivision of the hospital). Section 1877(d)(2) of the Act
provides an exception for physician ownership or investment interests
in rural providers (the ``rural provider exception''). In order for an
entity to qualify for the rural provider exception, the DHS must be
furnished in a rural area (as defined in section 1886(d)(2) of the Act)
and substantially all the DHS furnished by the entity must be furnished
to individuals residing in a rural area.
Section 6001(a)(3) of the Patient Protection and Affordable Care
Act (Pub. L. 111-148) as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152) (hereafter referred to
together as ``the Affordable Care Act'') amended the whole hospital and
rural provider exceptions to the physician self-referral prohibition to
impose additional restrictions on physician ownership and investment in
hospitals and rural providers. Since March 23, 2010, a physician-owned
hospital that seeks to avail itself of either exception is 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 facility
expansion prohibition by the Secretary. 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. Section 1877(i)(3)(H) of the Act states that the
Secretary shall publish in the Federal Register the final decision with
respect to an application for an exception to the prohibition against
facility expansion not later than 60 days after receiving a complete
application.
For further information on the physician-owned hospital expansion
exception process, visit our Web site at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html.
II. Exception Approval 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 specified that prior
to our review of the request, we will solicit community input on the
request for an exception by publishing a notice of the request in the
Federal Register (see Sec. 411.362(c)(5)). We also stated that
individuals and entities in the hospital's community 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). Although 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 care
programs, we noted that these were examples only and that we would not
restrict the type of community input that may be submitted (76 FR
74522). If we receive timely comments from the community, we will
notify the hospital, and the hospital has 30 days after such notice to
submit a rebuttal statement (Sec. 411.362(c)(5)(ii)).
A request for an exception to the facility expansion prohibition is
considered complete and ready for CMS review if no comments from the
community are received by the close of the 30-day comment period. If we
receive timely comments from the community, we consider the request to
be complete 30 days after the hospital is notified of the comments. If
we grant the request for an exception to the prohibition on expansion
of facility
[[Page 64802]]
capacity, 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 exceeding
200 percent of the hospital's baseline number of operating rooms,
procedure rooms, and beds (Sec. 411.362(c)(6)). Our decision to grant
or deny a hospital's request for an exception to the prohibition on
expansion of facility capacity will be published in the Federal
Register in accordance with our regulations at Sec. 411.362(c)(7).
III. Public Response to Notice With Comment Period
On May 12, 2014, we published a notice in the Federal Register (79
FR 26969) entitled, 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. In the
May 12, 2014 notice we stated that as permitted by section 1877(i)(3)
of the Act and our regulations at Sec. 411.362(c), the following
physician-owned hospital requested an exception to the prohibition on
expansion of facility capacity:
Name of Facility: Lake Pointe Medical Center.
Location: 6800 Scenic Drive, Rowlett, Texas 75088-4552 (Rockwall
County).
Basis for Exception Request: High Medicaid Facility.
In the May 12, 2014 notice we also solicited comments from
individuals and entities in the community in which Lake Pointe Medical
Center is located. Eighty-four comments were submitted under docket
number for the notice (CMS-2014-0061). Eighty-three of those comments
advocated that a different physician-owned hospital in another county
be allowed to expand under the expansion exception process. Those
comments were not relevant to the Lake Pointe Medical Center request,
and we have not considered them in deciding the request. The only
remaining comment urged CMS to evaluate whether Lake Pointe Medical
Center is a ``high Medicaid facility'' using data that our regulations
do not permit us to consider.
On August 4, 2014, as required by Sec. 411.362(c)(5)(ii), we
notified Lake Pointe Medical Center that we received comments in
response to the May 12, 2014 notice and that these comments were
available for public viewing at http://www.regulations.gov. Lake Pointe
Medical Center submitted a rebuttal statement on August 13, 2014. The
statement indicated that the comments raised no issues of law or fact
that in any way contradict Lake Pointe Medical Center's assertion that
it meets all of the statutory and regulatory requirements to qualify as
a high Medicaid facility. On September 3, 2014, at the close of the 30-
day rebuttal period, CMS deemed the request complete pursuant to Sec.
411.362(c)(5)(ii).
IV. Decision
This final notice announces our decision to approve the request
from Lake Pointe Medical Center for an exception to the prohibition
against expansion of facility capacity. As set forth in our current
regulations and public guidance documents, Lake Pointe Medical Center
submitted the data and certifications necessary to demonstrate that it
satisfies the criteria to qualify as a high Medicaid facility. Further,
our regulations do not permit us to consider the data recommended by
the one relevant comment. Therefore, in accordance with section
1877(i)(3) of the Act, we have granted the request from Lake Pointe
Medical Center for an exception to the expansion of facility capacity
prohibition based on the following criteria:
The hospital is not the sole hospital in Rockwall, Texas,
the county in which it is located;
The hospital certified that it does not discriminate
against beneficiaries of Federal health care programs and does not
permit physicians practicing at the hospital to discriminate against
such beneficiaries; and
With respect to each of the 3 most recent fiscal years for
which data were available as of the date the hospital submitted its
request, the hospital 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 Rockwall County, Texas, the county in which the hospital is located.
Our approval grants the request of Lake Pointe Medical Center to
add a total of 36 beds. Pursuant to Sec. 411.362(c)(6), 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 exceeding 200 percent of the hospital's
baseline number of operating rooms, procedure rooms, and beds. Lake
Pointe Medical Center certified that its baseline number of operating
rooms, procedure rooms, and beds for which it was licensed as of March
23, 2010, was 129. Accordingly, we find that granting the additional 36
beds will not result in an aggregate number of operating rooms,
procedure rooms, and beds for which the hospital is licensed that
exceeds 200 percent of the hospital's baseline.
IV. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
Dated: October 22, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2014-25940 Filed 10-30-14; 8:45 am]
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