81 FR 49662 - 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 81, Issue 145 (July 28, 2016)

Page Range		49662-49664
FR Document		2016-17928

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 81 Issue 145 (Thursday, July 28, 2016)

[Federal Register Volume 81, Number 145 (Thursday, July 28, 2016)]
[Notices]
[Pages 49662-49664]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17928]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-1667-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 August 29, 2016.

ADDRESSES: In commenting, please refer to file code CMS-1667-PN. 
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-1667-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: Department of Health and Human Services, 
Attention: CMS-1667-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: [email protected].

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.

[[Page 49663]]

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 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 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 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 66770) that made certain revisions. These revisions included, 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)).
    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 to exceed 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: Deaconess Women's Hospital of Southern Indiana d/
b/a The Women's Hospital.
    Location: 4199 Gateway Blvd., Newburgh, IN 47630.
    Basis for 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 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 a high 
Medicaid facility. Under Sec.  411.362(c)(3), a high Medicaid facility 
is a hospital that satisfies all of the following criteria:
     Is not the sole hospital in the county in which the 
hospital is located.

[[Page 49664]]

     With respect to each of the 3 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 any other hospital located in the county in 
which the hospital is located.
     Does not discriminate against beneficiaries of federal 
health care programs and does not permit physicians practicing at the 
hospital to discriminate against such beneficiaries.
    Individuals and entities wishing to submit comments on the 
hospital's request should review the DATES and ADDRESSES sections 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 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.).

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, and, when we proceed 
with a subsequent document, we will respond to the comments in the 
preamble to that document.

    Dated: July 14, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2016-17928 Filed 7-27-16; 8:45 am]
BILLING CODE 4120-01-P

49664 Federal Register / Vol. 81, No. 145 / Thursday, July 28, 2016 / Notices

• With respect to each of the 3 most year (FY) 2017 animal drug user fees. application; $175,350 for a
recent 12-month periods for which data The Federal Food, Drug, and Cosmetic supplemental animal drug application
are available as of the date the hospital Act (the FD&C Act), as amended by the for which safety or effectiveness data are
submits its request, has an annual Animal Drug User Fee Amendments of required and for an animal drug
percent of total inpatient admissions 2013 (ADUFA III), authorizes FDA to application subject to the criteria set
under Medicaid that is estimated to be collect user fees for certain animal drug forth in section 512(d)(4) of the FD&C
greater than such percent with respect applications and supplements, for Act (21 U.S.C. 360b(d)(4)); $8,195 for an
to such admissions for any other certain animal drug products, for certain annual product fee; $111,900 for an
hospital located in the county in which establishments where such products are annual establishment fee; and $103,100
the hospital is located. made, and for certain sponsors of such for an annual sponsor fee. FDA will
• Does not discriminate against animal drug applications and/or issue invoices for FY 2017 product,
beneficiaries of federal health care investigational animal drug establishment, and sponsor fees by
programs and does not permit submissions. This notice establishes the December 31, 2016, and payment will
physicians practicing at the hospital to fee rates for FY 2017. be due by January 31, 2017. The
discriminate against such beneficiaries. FOR FURTHER INFORMATION CONTACT: Visit application fee rates are effective for
Individuals and entities wishing to FDA’s Web site at http://www.fda.gov/ applications submitted on or after
submit comments on the hospital’s ForIndustry/UserFees/ October 1, 2016, and will remain in
request should review the DATES and AnimalDrugUserFeeActADUFA/ effect through September 30, 2017.
ADDRESSES sections and state whether or default.htm or contact Lisa Kable, Applications will not be accepted for
not they are in the community in which Center for Veterinary Medicine (HFV– review until FDA has received full
the hospital is located. 10), Food and Drug Administration, payment of application fees and any
7519 Standish Pl., Rockville, MD 20855, other animal drug user fees owed under
IV. Collection of Information
240–402–6888. For general questions, the Animal Drug User Fee program
Requirements
you may also email the Center for (ADUFA program).
This document does not impose Veterinary Medicine (CVM) at:
information collection requirements, II. Revenue Amount for FY 2017
cvmadufa@fda.hhs.gov.
that is, reporting, recordkeeping or SUPPLEMENTARY INFORMATION: A. Statutory Fee Revenue Amounts
third-party disclosure requirements.
Consequently, there is no need for I. Background ADUFA III, Title I of Public Law 113–
review by the Office of Management and 14, specifies that the aggregate fee
Section 740 of the FD&C Act (21
Budget under the authority of the revenue amount for FY 2017 for all
U.S.C. 379j–12) establishes four
Paperwork Reduction Act of 1995 (44 animal drug user fee categories is
different types of user fees: (1) Fees for
U.S.C. 3501 et seq.). $21,600,000 (21 U.S.C. 379j–
certain types of animal drug
12(b)(1)(B).).
V. Response to Public Comments applications and supplements; (2)
annual fees for certain animal drug B. Inflation Adjustment to Fee Revenue
We will consider all comments we products; (3) annual fees for certain Amount
receive by the date and time specified establishments where such products are
in the DATES section of this preamble, made; and (4) annual fees for certain The fee revenue amount established
and, when we proceed with a sponsors of animal drug applications in ADUFA III for FY 2015 and
subsequent document, we will respond and/or investigational animal drug subsequent fiscal years are subject to an
to the comments in the preamble to that submissions (21 U.S.C. 379j–12(a)). inflation adjustment (21 U.S.C. 379j–
document. When certain conditions are met, FDA 12(c)(2)).
Dated: July 14, 2016. will waive or reduce fees (21 U.S.C. The component of the inflation
379j–12(d)). adjustment for payroll costs shall be one
Andrew M. Slavitt,
For FY 2014 through FY 2018, the plus the average annual percent change
Acting Administrator, Centers for Medicare
FD&C Act establishes aggregate yearly in the cost of all personnel
& Medicaid Services.
base revenue amounts for each fiscal compensation and benefits (PC&B) paid
[FR Doc. 2016–17928 Filed 7–27–16; 8:45 am]
year (21 U.S.C. 379j–12(b)(1)). Base per full-time equivalent position (FTE)
BILLING CODE 4120–01–P
revenue amounts established for years at FDA for the first three of the four
after FY 2014 are subject to adjustment preceding fiscal years, multiplied by the
for inflation and workload (21 U.S.C. proportion of PC&B costs to total FDA
DEPARTMENT OF HEALTH AND
379j–12(c)). Fees for applications, costs for the first three of the four
HUMAN SERVICES
establishments, products, and sponsors preceding fiscal years (see 21 U.S.C.
Food and Drug Administration are to be established each year by FDA 379j–12(c)(2)(A) and (B)). The data on
so that the percentages of the total total PC&B paid and numbers of FTE
[Docket No. FDA–2016–N–0007] paid, from which the average cost per
revenue that are derived from each type
of user fee will be as follows: Revenue FTE can be derived, are published in
Animal Drug User Fee Rates and FDA’s Justification of Estimates for
Payment Procedures for Fiscal Year from application fees shall be 20 percent
of total fee revenue; revenue from Appropriations Committees.
2017
product fees shall be 27 percent of total Table 1 summarizes that actual cost
AGENCY: Food and Drug Administration, fee revenue; revenue from establishment and FTE data for the specified fiscal
HHS. fees shall be 26 percent of total fee years, and provides the percent change
Lhorne on DSK30JT082PROD with NOTICES

ACTION: Notice. revenue; and revenue from sponsor fees from the previous fiscal year and the
shall be 27 percent of total fee revenue average percent change over the first
SUMMARY: The Food and Drug (21 U.S.C. 379j–12(b)(2)). three of the four fiscal years preceding
Administration (FDA) is announcing the For FY 2017, the animal drug user fee FY 2017. The 3-year average is 1.8759
rates and payment procedures for fiscal rates are: $350,700 for an animal drug percent.

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Document Created: 2016-07-28 01:47:28
Document Modified: 2016-07-28 01:47:28

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.
Contact		[email protected]
FR Citation		81 FR 49662

81 FR 49662 - 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 81, Issue 145 (July 28, 2016)

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