Transcript Recommending a Strategy - Wisconsin Office of Rural Health

Critical Access Hospital Regulatory
Update & Current Developments
Wisconsin Office of Rural Health Workshop
By: David H. Snow
Hall, Render, Killian, Heath & Lyman, PC
August 19, 2009
Overview of Topics


Review Status of CAH Program
2010 Final Rule (IPPS)








2

Cost reimbursement for lab
Method II (Death Sentence?)
CAHs in counties redesignated urban
CAH provider based updates
Proposed Physician Supervision
Review 12/31/07 Provider Based
Limitations
Definition of Campus
CAH Excluded Units
Review Relocation Developments
Status of CAH Program





There are approximately 1,300 CAHs in
the US, per CMS
>50% of US rural community hospital
About 22% of all US hospitals
Paid $1.3 billion > PPS - $1million/CAH
About 850 are Necessary Provider CAHs



3
453 have “health clinics” (CMS’s term?)
81 have psych units
20 have rehab units
CAH Program
US CAHs
4
6
Current Status of CAH
Eligibility Requirements

CAHs must be >35 miles from a hospital unless:



States CANNOT issue new NP designations after
12/31/2005




7
Located in mountainous areas or have only
secondary roads (15 miles) OR
Received state designation as a "necessary provider"
Had to have NP designation, AND
Be certified as a CAH by January 1, 2006
to be grandfathered from 35 mile rule
Proposal circulating to reinstate NP authority!
Current Status of CAH
Eligibility Requirements


Effective 1/1/2004 CAHs may operate up to 25
inpatient beds in any combination of acute care
and swing beds
Effective for cost reporting periods beginning
after 10/1/2004 CAHs may also have distinct
part units:



Excluded units do NOT count toward


8
Psych unit of up to 10 beds
Rehab unit of up to 10 beds
25 bed limit
ALOS calculation
Cost Reimbursement for Lab

Payment for clinical diagnostic
laboratory tests:




OLD rule


9
Cost only for CAH patients
Beneficiaries not liable for any costsharing or co-payment
Non-patients (reference) paid on fee
schedule
Patient must be physically present in the
hospital when the draw is done
Draw by hospital personnel elsewhere –
such as nursing home is not sufficient
Cost Reimbursement for Lab

MIPPA 2008 – effective 7/1/09


10

CAH lab services "shall be treated as being
furnished as part of outpatient critical access
services without regard to whether the
individual with respect to whom such services
are furnished is physically present in the CAH,
or in a SNF or a clinic (including a RHC) that is
operated by the a CAH, at the time the
specimen is collected."
Could be read to mean all reference work paid
at cost…….
But not by CMS !!!!
Cost Reimbursement for Lab

Effective 7/1/09: Cost payment if
patient is physically present in the
CAH (including PB'd dept's, but not
entities) when the specimen is
collected, OR at least 1 of following:



11
Individual receives o/p services in CAH
on the same day the specimen is
collected
Specimen is collected by CAH "employee"
Other bundling rules trump cost
payment – SNF consolidated billing
Cost Reimbursement for Lab

Individual receives o/p services in the
CAH on the same day the specimen is
collected, but it is not collected in the
CAH:

Doesn't matter where specimen is collected


Or, who collects it

12
Home, Dr's office, back at SNF…
Patient, SNF staff, Dr. office staff…
Cost Reimbursement for Lab

Collected by a CAH employee?

W-2 employee of CAH



Contracted lab staff ?


13
Including employees of CAH PB'd dept's
But not employees of PB'd entity (RHC) (huh?)
As long as not employed by an entity at site where specimen
is collected (SNF employee contracted to CAH) can be
considered employee for these purposes
No info on how this coordinates with CAH COP that lab
services be provided directly
Cost Reimbursement for Lab

Specimen collected by employee



Example: CAH employee goes to SNF to do blood
draw on part B resident, also picks up urine
sample from SNF staff



14
CAH employee (as defined) must physically perform
the specimen collection
Not enough to pick up the specimen
Blood draw – cost reimbursed (851 bill type)
Urine sample – fee schedule (141 bill type) (unless
patient also received CAH o/p services that day!)
See the cost reimbursement opportunity?
Method II Election

“All Inclusive” Election



Annual election by cost report year




15
facility payment will be reasonable costs
plus 115% of the Medicare fee schedule for
professional services (billed to FI on UB)
in writing
at least 30 days before beginning of cost
report year
applies to all physician services to outpatients
for entire year for which physician reassigns
billing rights to CAH
Need not be all physicians
Method II Election

“All Inclusive” Election (cont’d)




16
Outpatient Services only
Must be in hospital (provider based)
space
PC billed by CAH - CAH pays physician
Physicians do not need to be employees
(but will need a written contract - Stark,
etc.)
Method II's Effective
Death Sentence

2010 Final Rule States that CAHs electing
Method II will be paid 100% of costs instead
of 101%



Usually 1% on cost is more than 15% extra on
physician fee schedule



17
CMS believes this is correct statutory interpretation
Effective for cost reporting periods beg'g on or after
10/1/09
Per CMS CAHs "may change election"
Annual election required so NOT filing should stop it
But, consider affirmatively notifying FI
CAHs in Counties
Changed to Urban



Must be rural to be a CAH
Rural vs Urban defined by Census Bureau
2008 – CB changed 3 counties to urban





18
None in Wisconsin
Same thing happened in 2004 – including
Wisconsin
CAHs had to apply for redesignation to rural to
keep CAH
CMS amended regs to allow redesignation
again – but did not make permanent
Will happen again following 2010 census
CAH Provider Based
Clarifications – Final Rule

CMS amended regulation to expressly state that
CAH labs must meet the PB'd requirements


Ambulance



19
Technical interpretation of prior regulation excluded
labs from PB'd rule
CAH operated ambulance providers, when there is no
other ambulance w/i 35 miles, are paid at cost
In May CMS requested commentary on whether such
CAH ambulance services should be required to meet
the PB'd rules like other CAH departments and
provider based entities (like RHCs)
CMS Decided NOT to apply PB'd rules in this case
Proposed Physician Supervision

CY 2010 HOPPS Proposed Rule would amend regs
to clarify requirements for Medicare payment of
o/p therapeutic & diagnostic services


Applies to CAHs and PPS hospitals
Addresses physician "in the house" assumption that has
been built into o/p coverage rules for a long time



Assumption – Not Really

20
Who can supervise
Where do they have to be

Prior guidance stating we assume the supervision
requirement will be met in the hospital did not mean a
free pass
Must actually be "in the house"
Proposed Physician Supervision

Therapeutic Services: Who must
be in the house?

CMS proposes to expand from
physicians to also include:



Can supervise all procedures they
could do themselves w/i scope of
state law, scope of practice, and
hospital granted privileges

21
PAs, NPs, Clinical Nurse Specialists &
certified nurse-midwives
Clinical psychologists already have
supervision authority
Carve outs for cardiac & pulmonary
rehab
Proposed Physician Supervision

Where must supervising professionals be?




22
Must be present on the same campus, in the
hospital, or the on-campus PB'd department of
the hospital
Hospital = main buildings under control of &
operated by hospital, and from which services are
billed under hospital provider #
NOT in any other entity, even if co-located on
campus: SNF, IDTF, MOB, ESRD, HHA…
AND, immediately available ….
Proposed Physician Supervision

Immediately available means….





23
Available to furnish assistance and direction
throughout the performance of the
procedure
To step in and perform anytime, not just in
emergency
Not available if performing another
procedure that could not be interrupted
Do not need to be in same room/area
But…not so far away, even though in the
hospital, that could not intervene right
away
Proposed Physician Supervision

Diagnostic CAH o/p services – PHYSICIANS
ONLY – NOT PAs, etc





24
CMS proposes to clarify that hospital/CAH must
meet same level of supervision as applies under
physician fee schedule –
General, direct, or personal
Services provided directly or under arrangement
Direct is the same standard as the therapeutic
"incident to" standard
Reminder: for all services at an off-campus
PB'd department – appropriate supervising
professional must be at that site
Proposed Physician Supervision

Challenges for CAHs



If using this rule then no Medicare
coverage for:



25
Do not have to have a physician in the
house for COPs/License
ER requirement is Physician, PA, or NP
available on site w/i 30 minutes
therapeutic services when professional is
off site?
diagnostic services unless physician (NOT
PA or NP etc) is in the house?
Comments due by August 31st
Provider Based Limit

Final 2008 HOPPS rule – 11/27/07:




Essentially includes all PB’d sites in
determining whether 35/15 mile/NP
Location Rules Met
Failure to comply: CAH status subject to
termination unless the CAH terminates
the off campus arrangement

26
Any off campus location opened or acquired after
1/1/08 that meets provider based requirements must
be >35(15 in M/SR areas) mile drive from any other
hospital or CAH
Applies to excluded psych and rehab units also

Converting to free-standing should be sufficient
Not closing site
CAH Provider Based Limit

Sites operated and qualified as provider
based before 1/1/08 are grandfathered




Relocation of pre-1/1/08 PB’d site loses
grandfather status - it is site specific!!!


May be outside CAH's control - lease termination
Changes at grandfathered site:



27
“created or acquired after 1/1/08”
Converting free standing pre 1/1/08 site to PB’d
after 1/1/08 is not grandfathered
CMS approval/attestation not required
Addition of footprint or services
Construction of new building to replace old
Should be able to keep status – but confirm with
regional office
CAH Provider Based Limit

After 12/31/2007 - CAH corporation is NOT
prohibited from:

Operating free standing sites, just PB’d. So lose
option to get:



Opening Hospital Based - Rural Health Clinics




28
Exempt because not part of hospital provider
Have separate provider number
Sites under development before 1/1/08


Cost on hospital o/p facility services
15% bonus for Method II professional billing
Need CMS approval of prior plans/commitments
Were not required to file before 1/1/08
Law does NOT limit PPS hospitals from
opening PB’d sites within 35 miles of a CAH!!!
CAH Provider Based Limit

CMS Guidance 12/21/08 and 6/12/09




CAHs seeking a PB'd determination for newly
created or acquired off campus sites MUST
submit an attestation to Regional Office to
determine location requirements
Regulation 413.65 says PB'd Attestations
Optional
Follow Guidance !
Few places left in Wisconsin that can meet
location tests, but….

29

PB'd site may meet tests even though campus does
not
And, remember 15 mile rule
Off Campus Clinic
Location Example
(CAH-NP)
(PBC)
13
= Primary Roads
= Secondary Roads
30
Definition of Campus

So What is "On Campus" ????


"Campus means the physical area immediately
adjacent to the provider's main buildings,
other areas and structures that are not strictly
contiguous to the main buildings but are
located within 250 yards of the main buildings,
and any other areas determined on an
individual case basis, by the CMS regional
office, to be part of the provider's campus"
Affects:


31
Ability to open new PB'd services given
12/31/07 restrictions
Relocation test
Definition of Campus

On Campus Case Study


Hospital out of state – but in Region 5
Key to lines







32
Blue = Owned land + 250 yards
Red = hospital building + 250 yards
Orange = hospital operated ambulance + 250 yards
Green = expansion parcel for new building to house
PT/OT, various o/p ancillary & hospital admin/support, &
physician offices
Portion of new building would be within Red & Orange
250 yard rules
Is the building on campus?
If yes, does it expand 250 yard footprint?
Definition of Campus

Take aways




34
"Main buildings" not defined – Region 5
interprets as primarily I/P care.
Only main buildings enlarge footprint via
250 yard rule
Region 5 rarely has approved discretionary
expansion
Maybe if nothing but open space between
main buildings and new structure
Excluded Units



CAHs can have up to 10 bed psych &/or rehab
Paid under psych or rehab PPS – NOT cost
Process for exclusion





35
Can only be excluded on 1st day of cost reporting
period
Surveys cannot be retroactive to before date of
survey
Catch 22 - cannot get survey until operational
Need to use some of 25 beds for "unit" pre-exclusion
to trigger survey
Need lots of advance planning/notice to DHFS and
CMS
CAH: Relocations

At the new location a non-NP CAH must meet
all of the CAH Conditions of Participation,
including the location requirement




36
More than 35 miles from any hospital/CAH
Or, more than 15 miles of mountainous terrain or
secondary roads between it & any other hospital or
CAH
Primary roads = Federal highways & state highways
with 2 or more lanes in each direction
Wisconsin did not originally use 15 mile rule –
a few spots can meet it. CMS has approved a
NP switching to 15 mile status to allow a
move
NP CAH Relocation


CMS Position not CAH friendly
If relocating NP CAH does not
satisfy original NP criteria AND
75% tests then - deemed a
closed business



37
CAH provider agreement is
terminated
Would need to recertify as a PPS
hospital
CMS position that it can reassess
NP and 75% up to 1 year AFTER
move – Blind Leap Effect!
NP CAH: Relocations

42 CFR 485.610(d) (added 8/12/05) If a <1/1/06 NP
CAH relocates >1/1/06 it can continue to meet
location requirement based on NP ONLY IF:




Despite CMS commentary in final rule:



38
Serve 75% of the same service area
Provide 75% of the same services
Staffed by 75% of the same staff
“a NP CAH can relocate… provided it is essentially the same
facility in its new location. To help ensure that the facility is
the same we will require the relocated NP CAH to [meet the
75% tests]”
And other similar comments focusing on 75% tests
No other requirement in Regulation, BUT
NP CAH Relocation

CMS takes the position that IN ADDITION to 75% tests
NP CAH must:




CMS bases position on final rule commentary:


39
Satisfy the exact same N.P. criteria the CAH originally met
Not any of state’s NP criteria, but the same one(s) the
CAH was originally approved under
Must be re-verified by state agency
“The state agencies and Regional Offices will closely
monitor each NP CAH that relocates to ensure that it will
continue to provide services based on the criteria that
qualified the CAH to be designated as a NP”
No legal challenges yet – unlikely due to amount at stake
(new hospital construction)
So What is a Relocation?

Final Rule Commentary (8/12/05)


All new necessary provider CAH facilities that will be
constructed after Jan. 1, 2006 will be considered relocated
facilities
CMS issued interpretive guidance on the NP CAH
relocation rule 11/14/05, 9/7/07, 1/18/08 and
6/12/09


All discuss CMS position that a CAH with a grandfathered
NP status must also meet the same criteria it originally
met for NP CAH designation
Renovations or expansion of a CAH’s existing building or
addition of buildings on the existing main campus of the
CAH is not considered a relocation

40
As long as some portion of current building is kept and used
for hospital purposes (allowable space), patient care or
admin/support CAH can add anything, including all new beds
footprint, within 250 yards
NP CAH: Relocation

Relocating NP CAH must work with CMS
RO and state rural health agency

Letter of assurance re NP criteria



Pre-relocation attestation letter and Postrelocation process




41
Same 2 or 5 of 10 ????
Or maybe not?
NP verification
Document the three 75% tests
Get full survey & approval of all CAH COPs
Can take up to 1 year after move to
obtain final CAH continuation approval
"Landlocked" NP Options



Relocate and go back to PPS Payment (NOT)
Work to meet NP criteria (difficult, at best)
Work w/ CMS to obtain approval for:





42
As much renovation & reconfiguration as possible
w/o crossing relocation line
CMS will review plans and provide informal guidance
that plans are not a relocation
Stay “as is”
Change the law….
Critical Access Hospital Regulatory
Update & Current Developments
Thank you!
By: David H. Snow
Hall, Render, Killian, Heath & Lyman, PC
August 19, 2009