[Federal Register Volume 80, Number 175 (Thursday, September 10, 2015)]
[Notices]
[Pages 54565-54566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22856]
[[Page 54565]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1642-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 Harsha Behavioral Center, Incorporation (HBC) for an
exception to the prohibition against expansion of facility capacity.
DATES: Effective Date: This notice is effective on September 11, 2015.
FOR FURTHER INFORMATION CONTACT:
Patricia Taft, (410) 786-4561.
Teresa Walden, (410) 786-3755.
SUPPLEMENTARY INFORMATION:
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'' (DHS) payable by
Medicare to an entity with which he or she (or an immediate family
member) has a financial relationship (ownership or compensation),
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 those DHS
furnished as a result of a prohibited referral.
Section 1877(d)(2) of the Act provides an exception, known as the
rural provider exception, for physician ownership or investment
interests in rural providers. 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)(D) of the Act) and substantially all the
DHS furnished by the entity must be furnished to individuals residing
in a rural area.
Section 1877(d)(3) of the Act provides an exception, known as the
hospital ownership 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 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 rural provider and
hospital ownership exceptions to the physician self-referral
prohibition to impose additional restrictions on physician ownership
and investment in hospitals. 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 of the Department of Health and
Human Services (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 request 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 the request for an exception to the prohibition against facility
expansion not later than 60 days after receiving a complete
application.
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 specifies 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, 66987 through 66997) that made certain revisions to the
expansion exception process. Because the Centers for Medicare &
Medicaid Services (CMS) formally accepted this request prior to the
effective date of that rule, CMS is reviewing and processing the
request in accordance with the regulations that were published on
November 30, 2011 and which were in effect at the time of submission.
In the November 30, 2011 final rule, we specified that prior to our
review of the request, we will solicit community input on the request
by publishing a notice of the request in the Federal Register (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. 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)). Section 411.362(c)(5)
also specfies that a request for an exception to the facility expansion
prohibition is considered complete 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 against
expansion of facility 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 to exceed 200 percent of the hospital's baseline
number of operating rooms, procedure rooms, and beds (Sec.
411.362(c)(6)).
III. Public Response to Notice With Comment Period
On June 19, 2015, we published a notice in the Federal Register (80
FR 35363) 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 June 19, 2015 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: Harsha Behavioral Center, Inc. (HBC).
Address: 1420 East Crossing Boulevard, Terre Haute, Indiana 47802.
County: Vigo County, Indiana.
Basis for Exception Request: High Medicaid Facility.
In the June 19, 2015 notice, we also solicited comments from
individuals and entities in the community in which HBC is located. We
received no comments during the 30-day public comment period.
Accordingly, CMS deemed the request complete on July 20, 2015, the end
date of the public comment period.
IV. Decision
This final notice announces our decision to approve HBC's request
for
[[Page 54566]]
an exception to the prohibition against expansion of facility capacity.
As required by the November 30, 2011final rule and our public guidance
documents, HBC submitted the data and certifications necessary to
demonstrate that it satisfies the criteria to qualify as a high
Medicaid facility. In accordance with section 1877(i)(3) of the Act, we
have granted HBC's request for an exception to the expansion of
facility capacity prohibition based on the following criteria:
HBC is not the sole hospital in Vigo, Indiana, the county
in which it is located;
HBC 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 HBC submitted its request, it
has an annual percentage of total inpatient admissions under Medicaid
that is estimated to be greater than such percentage with respect to
such admissions for any other hospital located in Vigo County, Indiana,
the county in which it is located.
Our approval grants HBC's request to add a total of 44 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 HBC is
licensed to exceed 200 percent of its baseline number of operating
rooms, procedure rooms, and beds. HBC certified that its baseline
number of operating rooms, procedure rooms, and beds is 44.
Accordingly, we find that granting an additional 44 beds will not
exceed the limitation on a permitted expansion.
IV. 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.).
Dated: August 18, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2015-22856 Filed 9-9-15; 8:45 am]
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