80 FR 26566 - 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

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services

Federal Register Volume 80, Issue 89 (May 8, 2015)

Page Range		26566-26567
FR Document		2015-11138

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 (the Secretary) 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 (CMS) 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.

Federal Register, Volume 80 Issue 89 (Friday, May 8, 2015)

[Federal Register Volume 80, Number 89 (Friday, May 8, 2015)]
[Notices]
[Pages 26566-26567]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-11138]



[[Page 26566]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-1640-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: Proposed notice.

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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 (the Secretary) 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 (CMS) 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: Comment Date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on June 8, 2015.

ADDRESSES: In commenting, please refer to file code CMS-1640-NC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of three ways (please choose only 
one of the ways listed):
    1. Electronically. You may submit electronic comments on this 
exception request to http://www.regulations.gov. Follow the 
instructions under the ``More Search Options'' tab.
    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-1640-NC, 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: Department of Health and Human Services, 
Attention: CMS-1640-NC, 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, (410) 786-4561 or 
Teresa Walden, (410) 786-3755.

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 Web site as soon as possible after they have 
been received: http://www.regulations.gov. Follow the search 
instructions on that Web site to view public comments.
    We will allow stakeholders 30 days from the date of this notice to 
submit written comments. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of this notice, at the 
headquarters of the Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of 
each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view 
public comments, please phone 1-800-743-3951.

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)(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 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 application for the exception. For 
further information, we refer readers to the CMS Web site at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html.

II. 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

[[Page 26567]]

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)(ii)).
    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 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, 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)). The CMS decision to 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).

III. 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: Doctors Hospital at Renaissance.
    Location: 5501 South McColl Road, Edinburg, Texas 78539.
    Basis for Exception Request: Applicable Hospital.
    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 
Web site at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Physician_Owned_Hospitals.html. We especially 
welcome comments regarding whether the hospital qualifies as an 
applicable hospital. Under Sec.  411.362(c)(2), an applicable hospital 
is a hospital that satisfies all of the following criteria:
     The hospital is located in a county that has a percentage 
increase in 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.
     The hospital 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 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. The most recent 12-month period for which 
data are available means the most recent 12-month period for which the 
data source used contains all data from the requesting hospital and 
each hospital located in the same county as the requesting hospital.
     The hospital 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 hospital 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 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.
     The hospital 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.
    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.

IV. Collection of Information Requirements

    This document does not impose information collection, 
recordkeeping, or third-party disclosure 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. chapter 
35).

V. Response to Public Comments

    We will consider all comments we receive by the date and time 
specified in the DATES section of this preamble.

    Dated: April 27, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2015-11138 Filed 5-7-15; 8:45 am]
 BILLING CODE 4120-01-P

Federal Register / Vol. 80, No. 89 / Friday, May 8, 2015 / Notices 26567

66770) that made certain revisions. If we grant the request for an requesting hospital and each hospital
These revisions include, among other exception to the prohibition on located in the same county as the
things, permitting the use of data from expansion of facility capacity, the requesting hospital.
an external data source or data from the expansion may occur only in facilities • The hospital does not discriminate
Hospital Cost Report Information on the hospital’s main campus and may
against beneficiaries of Federal health
System (HCRIS) for specific eligibility not result in the number of operating
care programs and does not permit
criteria. rooms, procedure rooms, and beds for
which the hospital is licensed exceeding physicians practicing at the hospital to
As stated in regulations at
200 percent of the hospital’s baseline discriminate against such beneficiaries.
§ 411.362(c)(5), we will solicit
community input on the request for an number of operating rooms, procedure • The hospital is located in a State in
exception by publishing a notice of the rooms, and beds (§ 411.362(c)(6)). The which the average bed capacity in the
request in the Federal Register. CMS decision to grant or deny a State is less than the national average
Individuals and entities in the hospital’s hospital’s request for an exception to the bed capacity during the most recent
community will have 30 days to submit prohibition on expansion of facility fiscal year for which HCRIS, as of the
comments on the request. Community capacity must be published in the date that the hospital submits its
input must take the form of written Federal Register in accordance with our request, contains data from a sufficient
comments and may include regulations at § 411.362(c)(7). number of hospitals to determine a
documentation demonstrating that the III. Hospital Exception Request State’s average bed capacity and the
physician-owned hospital requesting national average bed capacity.
the exception does or does not qualify As permitted by section 1877(i)(3) of
the Act and our regulations at • The hospital has an average bed
as an ‘‘applicable hospital’’ or ‘‘high
§ 411.362(c), the following physician- occupancy rate that is greater than the
Medicaid facility,’’ as such terms are
defined in § 411.362(c)(2) and (3). In the owned hospital has requested an average bed occupancy rate in the State
November 30, 2011 final rule (76 FR exception to the prohibition on in which the hospital is located during
74522), we gave examples of community expansion of facility capacity: the most recent fiscal year for which
Name of Facility: Doctors Hospital at HCRIS, as of the date that the hospital
input, such as documentation
Renaissance. submits its request, contains data from
demonstrating that the hospital does not
Location: 5501 South McColl Road, a sufficient number of hospitals to
satisfy one or more of the data criteria
Edinburg, Texas 78539. determine the requesting hospital’s
or that the hospital discriminates Basis for Exception Request:
against beneficiaries of Federal health average bed occupancy rate and the
Applicable Hospital.
programs; however, we noted that these We seek comments on this request relevant State’s average bed occupancy
were examples only and that we will from individuals and entities in the rate.
not restrict the type of community input community in which the hospital is Individuals and entities wishing to
that may be submitted. If we receive located. We encourage interested parties submit comments on the hospital’s
timely comments from the community, to review the hospital’s request, which request should review the DATES and
we will notify the hospital, and the is posted on the CMS Web site at: ADDRESSES sections above and state
hospital will have 30 days after such http://www.cms.gov/Medicare/Fraud- whether or not they are in the
notice to submit a rebuttal statement and-Abuse/PhysicianSelfReferral/ community in which the hospital is
(§ 411.362(c)(5)(ii)). Physician_Owned_Hospitals.html. We located.
A request for an exception to the especially welcome comments regarding
facility expansion prohibition is whether the hospital qualifies as an IV. Collection of Information
considered complete as follows: applicable hospital. Under Requirements
• If the request, any written § 411.362(c)(2), an applicable hospital is
comments, and any rebuttal statement a hospital that satisfies all of the This document does not impose
include only HCRIS data: (1) The end of following criteria: information collection, recordkeeping,
the 30-day comment period if CMS • The hospital is located in a county or third-party disclosure requirements.
receives no written comments from the that has a percentage increase in Consequently, it need not be reviewed
community; or (2) the end of the 30-day population that is at least 150 percent of by the Office of Management and
rebuttal period if CMS receives written the percentage increase in population of Budget under the authority of the
comments from the community, the State in which the hospital is Paperwork Reduction Act of 1995 (44
regardless of whether the physician- located during the most recent 5-year U.S.C. chapter 35).
owned hospital submitting the request period for which data are available as of
submits a rebuttal statement V. Response to Public Comments
the date that the hospital submits its
(§ 411.362(c)(5)(i)). request. We will consider all comments we
• If the request, any written • The hospital has an annual percent receive by the date and time specified
comments, or any rebuttal statement of total inpatient admissions under in the DATES section of this preamble.
include data from an external data Medicaid that is equal to or greater than
source, no later than: (1) 180 days after the average percent with respect to such Dated: April 27, 2015.
the end of the 30-day comment period admissions for all hospitals located in Andrew M. Slavitt,
if CMS receives no written comments the county in which the hospital is
asabaliauskas on DSK5VPTVN1PROD with NOTICES

Acting Administrator, Centers for Medicare
from the community; and (2) 180 days located during the most recent 12- & Medicaid Services.
after the end of the 30-day rebuttal month period for which data are [FR Doc. 2015–11138 Filed 5–7–15; 8:45 am]
period if CMS receives written available as of the date that the hospital BILLING CODE 4120–01–P
comments from the community, submits its request. The most recent 12-
regardless of whether the physician- month period for which data are
owned hospital submitting the request available means the most recent 12-
submits a rebuttal statement month period for which the data source
(§ 411.362(c)(5)(ii)). used contains all data from the

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Document Created: 2018-02-21 10:24:26
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Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Proposed notice.
Dates		Comment Date: To be assured consideration, comments must be
Contact		Patricia Taft, (410) 786-4561 or Teresa Walden, (410) 786-3755.
FR Citation		80 FR 26566

80 FR 26566 - 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

DEPARTMENT OF HEALTH AND HUMAN SERVICESCenters for Medicare & Medicaid Services

Federal Register Volume 80, Issue 89 (May 8, 2015)

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services