[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Notices]
[Pages 55851-55853]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23363]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1640-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.
-----------------------------------------------------------------------
SUMMARY: This final notice announces our decision to approve the
request from Doctors Hospital at Renaissance 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 or
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
[[Page 55852]]
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 hospital ownership
and rural provider 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 an
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 a 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. These
revisions include, among other things, permitting the use of data from
an external data source, as defined in our regulations, or from the
Hospital Cost Report Information System (HCRIS) for specific
eligibility criteria.
As stated in our regulations at Sec. 411.362(c)(5), we solicit
community input on a request for an exception by publishing a notice of
the request in the Federal Register. Individuals and entities have 30
days to submit written comments on the request, which 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 defined in Sec.
411.362(c)(2) and (c)(3), respectively. We notify the hospital of
comments received, 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 specifies the timing for when CMS deems a request
for an exception to the facility expansion prohibition complete.
If we grant the request for an exception, 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 May 8, 2015, we published a notice in the Federal Register (80
FR 26566) 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 8, 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: Doctors Hospital at Renaissance (DHR).
Location: 5501 South McColl Road, Edinburg, Texas 78539.
Basis for Exception Request: Applicable Hospital.
In the May 8, 2015 notice, we also solicited comments from
individuals and entities in the community in which DHR is located.
We received 21 comments, 14 of which were variations of a form
letter, and commenters generally opposed DHR's request to expand.
One or more of the commenters raised questions or concerns
regarding:
Whether DHR's request conforms to the procedural
requirements set forth at Sec. 411.362(c);
Whether DHR demonstrated that it satisfied the population
growth criterion using the data required under Sec. 411.362(c)(2)(i);
Whether the data source used by DHR to demonstrate
satisfaction of the inpatient Medicaid admissions criterion at Sec.
411.362(c)(2)(ii) was permissible;
Whether DHR satisfied the non-discrimination criterion at
Sec. 411.362(c)(2)(iii);
How a facility expansion by DHR would affect the community
in which it is located; and
The amount of increased facility capacity requested by
DHR.
On June 16, 2015, as required by Sec. 411.362(c)(5)(ii), we
notified DHR that we received comments in response to the May 8, 2015
notice and that these comments were available for public viewing at
http://www.regulations.gov. DHR submitted a rebuttal statement on July
15, 2015. The statement rebutted each of the commenters' assertions
regarding the applicable hospital eligibility criteria and addressed
the concerns expressed by the commenters regarding an expansion by the
hospital.
IV. Decision
This final notice announces our decision to approve DHR's request
for an exception to the prohibition against expansion of facility
capacity. As required by our current regulations and public guidance
documents, DHR submitted the data and certifications necessary to
demonstrate that it satisfies the criteria to qualify as an applicable
hospital. Further, CMS considered the assertions of the commenters
about DHR's compliance with the procedural requirements set forth at
Sec. 411.362(c), the population growth criterion under Sec.
411.362(c)(2)(i), the data source used by DHR to demonstrate
satisfaction of the inpatient Medicaid admissions criterion at Sec.
411.362(c)(2)(ii), and the non-discrimination criterion at Sec.
411.362(c)(2)(iii). Following our review of the information provided by
the commenters, we are not persuaded that DHR failed to satisfy one or
more of the applicable hospital eligibility criteria or that its
request failed to conform to our procedural requirements. Also, CMS
cannot consider any concerns unrelated to the statutory and regulatory
eligibility criteria when determining whether to grant an exception to
a requesting hospital. In addition, if a hospital qualifies as either
an applicable hospital or high Medicaid facility, CMS does not have the
discretion to grant less than the requested increase in facility
capacity.
In accordance with section 1877(i)(3) of the Act, we are granting
DHR's request for an exception to the prohibition against expansion of
facility capacity based on the following criteria:
[[Page 55853]]
DHR is located in Hidalgo County, which has a percentage
increase in population that is at least 150 percent of the percentage
increase in Texas' population during the most recent 5-year period for
which data was available as of the date that DHR submitted its request;
DHR has an annual percentage of total inpatient admissions
under Medicaid that is equal to or greater than the average percentage
with respect to such admissions for all hospitals located in Hidalgo
County during the most recent 12-month period for which data are
available as of the date that DHR submitted its request;
DHR certified and provided satisfactory documentation 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;
DHR is located in Texas, which has an average bed capacity
that is less than the national average bed capacity during the most
recent fiscal year for which HCRIS, as of the date that the hospital
submitted its request, contained data from a sufficient number of
hospitals to determine Texas' average bed capacity and the national
average bed capacity; and
DHR has an average bed occupancy rate that is greater than
the average bed occupancy rate in Texas during the most recent fiscal
year for which HCRIS, as of the date that DHR submitted its request,
contained data from a sufficient number of hospitals to determine its
average bed occupancy rate and Texas' average bed occupancy rate.
In determining that DHR satisfied the Medicaid inpatient
admissions, bed capacity and bed occupancy criteria, we deemed the
HCRIS and Texas State Medicaid Agency data used by DHR to satisfy the
standards set forth in the regulations published on November 10, 2014,
for those criteria.
Our approval grants DHR's request to add a total of 551 operating
rooms, procedure rooms, and beds for which DHR is licensed. 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 to
exceed 200 percent of the hospital's baseline number of operating
rooms, procedure rooms, and beds. DHR certified that its baseline
number of operating rooms, procedure rooms, and beds for which it was
licensed as of March 23, 2010, was 551. Accordingly, we find that
granting the additional 551 operating rooms, procedure rooms, and 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: September 4, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2015-23363 Filed 9-16-15; 8:45 am]
BILLING CODE 4120-01-P