Criteria for PPS-Excluded Hospitals

3104 - Criteria for PPS-Excluded Hospitals (Rev. 1, 05-21-04) 3104A - Psychiatric Hospitals (Rev. 1, 05-21-04) A hospital certified as a psychiatric hospital under existing requirements is excluded. 3104B - Rehabilitation Hospitals (Rev. 1, 05-21-04) A hospital is an excluded rehabilitation hospital if: • It has in effect a provider agreement to participate as a hospital; • During its most recent 12-month cost reporting period it treated an inpatient population of which at least 75 percent required intensive rehabilitative services for one or more of the following conditions: o Stroke; o Spinal cord injury; o Congenital deformity; o Amputation; o Major multiple trauma; o Fracture of femur (hip fracture); o Brain injury; o Polyarthritis, including rheumatoid arthritis; o Neurological disorders, including multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy, and Parkinson’s disease; or o Burns. • It has in effect a preadmission screening procedure under which each prospective patient’s condition and medical history are reviewed to determine whether the patient is likely to benefit significantly from an intensive inpatient hospital rehabilitation program or assessment; • It ensures that patients receive close medical supervision, rehabilitation nursing, physical therapy, and occupational therapy plus, as needed, speech therapy, social services or psychological services, and orthotic and prosthetic services; • It has for each inpatient, a plan of treatment that is established, reviewed, and revised as needed by a physician in consultation with other professional personnel who provide services to the patient; • It uses a coordinated multidisciplinary team approach in the rehabilitation of each inpatient, as documented by periodic clinical entries to the patient’s medical record noting the patient’s status in relationship to goal attainment, and team conferences are held at least every two weeks to determine the appropriateness of treatment; and • It has a director of rehabilitation who: o Provides services to the hospital and its inpatients on a full-time basis; o Is a Doctor of Medicine or Osteopathy licensed under State law to practice medicine or surgery; and o Has had, after completing a 1-year hospital internship, at least two years of training in the medical management of inpatients requiring rehabilitation services. The inpatient population percent rule is applied to the 12-month cost reporting period immediately preceding the cost reporting period for which exclusion is sought. The cost reporting period need not be complete when this evaluation takes place. The RO requests the servicing intermediary to make the determination concerning the inpatient population percent rule. Alternative: A hospital that seeks exclusion as a rehabilitation hospital for the first full l2-month cost reporting period that occurs after it becomes a Medicare participating hospital could not possibly meet the usual rule above, so a first-time exception to the rule is provided the hospital if it provides a written certification that the inpatient population it intends to serve will meet the inpatient population percent rule. The written certification described above is effective for any cost reporting period of not less than one month and not more than 11 months occurring between the dates the hospital began participating in Medicare and the start of the hospital’s regular 12-month cost reporting period. This exception is available only once, when the facility first gains excluded status. If a new rehabilitation hospital is excluded from PPS for a cost reporting period, but the inpatient population treated in the hospital during the period does not actually meet the inpatient population percent rule, a retroactive adjustment of payments to the hospital for the period is needed. Where this occurs, the FI advises the RO of the identity of the hospital and of the dates of the cost reporting period involved. 3104C - Children’s Hospitals (Rev. 1, 05-21-04) A hospital is an excluded children’s hospital if it has in effect an agreement to participate as a hospital, and more than 50 percent of its inpatients are individuals under the age of 18. The servicing intermediary verifies compliance. 3104D - Long-Term Care Hospitals (Rev. 198, Issued: 01-17-20, Effective: 01-17-20, Implementation: 01-17-20) A hospital is an IPPS-excluded long-term care hospital (LTCH) if it has in effect a provider agreement to participate as a hospital and the average inpatient length of stay is greater than 25 days. The average length of stay, for this purpose, is determined by dividing the total number of inpatient days for Medicare patients not paid at the site neutral rate or under a Medicare Advantage plan (excluding leave of absence or pass days) by the total number of Medicare discharges for the cost period not paid at the site neutral rate or under a Medicare Advantage plan. The servicing MAC verifies whether rehabilitation hospitals meet this length of stay criterion as LTCHs, and are, therefore, eligible for a LTCH exclusion and do not have to meet the special criteria otherwise established for these categories of facilities. The servicing MAC verifies length of stay for all LTCHs. If an LTCH also has an IPPS-excluded psychiatric and/or rehabilitation unit, the days and discharges from those excluded units are not included in the calculation of an LTCH’s average length of stay (83 FR 41515). Patients in IPPS-excluded units in an LTCH are not paid under the LTCH PPS. Long-term care hospitals that occupy space in a building also used by another hospital, or in one or more buildings located on the same campus as buildings used by another hospital (i.e., the host facility), must meet additional “hospital-within-a-hospital” or satellite criteria. NOTE: Section 15008(a) of the 21st Century Cures Act (Pub. L. 114-255) removed the LTCH category under section 1886(d)(1)(B)(iv)(II) of the Social Security Act (implemented in the regulations at 42 CFR 412.23(e)(2)(ii)) and created a new category of IPPS-excluded hospital at section 1886(d)(1)(B)(vi) of the Act (implemented in the regulations at 42 CFR 412.22(i)), which is referred to as extended neoplastic disease care hospitals, effective January 1, 2015. Although this category of hospitals have LTCH CCNs, they are not required to meet other LTCH specific requirements. 3104E - Hospital within Hospitals (Rev. 198, Issued: 01-17-20, Effective: 01-17-20, Implementation: 01-17-20) A IPPS-excluded hospital that occupies space in a building also used by another hospital which is not excluded from the IPPS, or in one or more entire buildings located on the same campus as buildings used by another hospital which is not excluded from the IPPS, must meet the criteria at 42 CFR 412.22(e) in order to maintain its IPPS-excluded status as follows: • The hospital has a governing body that is separate from the governing body occupying space in the same building or campus, and the governing body is not controlled by the host facility or any third entity that controls both hospitals; NOTE: For purposes of this section, “control” exists if an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution. • The hospital has a chief medical officer who reports directly to the governing body and who is responsible for all medical staff activities of the hospital, and is not employed or under contract with the host facility or any third party that controls both hospitals; • The hospital has a separate medical staff from the medical staff of the host facility, reports directly to the hospital’s governing body, and adopts and enforces bylaws governing medical care provided in the hospital and medical staff activities, including the granting of privileges to individual practitioners; • The hospital has a single chief executive officer through whom all administrative authority flows and who exercises control and surveillance over all administrative activities at the hospital, and who is not employed by or under contract to the host facility or any third party who controls both hospitals; and If a State hospital that is occupying space in the same building or on the same campus as another State hospital cannot meet the separate governing body criterion solely because its governing body is under the control of the State hospital with which it shares a building or a campus, or is under the control of a third entity that also controls the State hospital with which it shares a building or a campus, the State hospital can nevertheless qualify for an exclusion if it meets the other applicable criteria in §412.22(e) and the following: • Both State hospitals occupy space in the same building or on the same campus and have been continuously owned and operated by the State since October 1, 1995; • Is required by State law to be subject to the governing authority of the State hospital with which it shares space or the governing authority of a third entity that controls both hospitals; and • Was excluded from the IPPS before October 1, 1995, and continues to be excluded from the inpatient prospective payment system through September 30, 2008. If a hospital was excluded from the IPPS on or before September 30, 1995, and at that time occupied space in a building also used by another hospital, or in one or more buildings located on the same campus as buildings used by another hospital, it is not required to meet §412.22(e)(1)(i)-(iv) in order to maintain its IPPS-excluded status so long as it operates under the same terms and conditions in effect on September 30, 2003. For cost reporting periods beginning on or after October 1, 2006, a hospital may decrease its number of beds and remain excused from the separateness and control requirements as long as it does not increase its beds above the number it had on September 30, 2003. Effective January 1, 2020 a grandfathered Children’s HwH may increase beds without losing its grandfathered status. The SA notifies the CMS RO as soon as it becomes aware of any LTCH planning to operate as a HwH and notifies the facility immediately that it must demonstrate compliance with the special HwH criteria. The SA will review documentation for hospitals that intend to operate as HwH in order to make an initial recommendation to the ROs regarding a hospital’s compliance or noncompliance with the above criteria (See §3104.D). Final determinations will be made on a case-by-case basis by the RO using whatever procedure it deems appropriate. In some instances, it may be necessary to authorize a SA onsite inspection of the hospital by the State agency to collect additional information. The hospital must submit a completed Form CMS-855 to notify the MAC of its intent to be a HwH.