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, 54565-54566 [2015-22856]

Agencies

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

[Federal Register Volume 80, Number 175 (Thursday, September 10, 2015)]
[Notices]
[Pages 54565-54566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22856]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-1642-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.

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SUMMARY: This final notice announces our decision to approve the 
request from Harsha Behavioral Center, Incorporation (HBC) 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.
    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 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. 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 the 
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 the 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 to the 
expansion exception process. Because the Centers for Medicare & 
Medicaid Services (CMS) formally accepted this request prior to the 
effective date of that rule, CMS is reviewing and processing the 
request in accordance with the regulations that were published on 
November 30, 2011 and which were in effect at the time of submission.
    In the November 30, 2011 final rule, we specified that prior to our 
review of the request, we will solicit community input on the request 
by publishing a notice of the request in the Federal Register (Sec.  
411.362(c)(5)). We also stated that individuals and entities in the 
hospital's community have 30 days to submit comments on the request. If 
we receive timely comments from the community, we will notify the 
hospital, 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 specfies that a request for an exception to the facility expansion 
prohibition is considered complete if no comments from the community 
are received by the close of the 30-day comment period. If we receive 
timely comments from the community, we consider the request to be 
complete 30 days after the hospital is notified of the comments.
    If we grant the request for an exception to the prohibition against 
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)).

III. Public Response to Notice With Comment Period

    On June 19, 2015, we published a notice in the Federal Register (80 
FR 35363) 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 June 19, 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: Harsha Behavioral Center, Inc. (HBC).
    Address: 1420 East Crossing Boulevard, Terre Haute, Indiana 47802.
    County: Vigo County, Indiana.
    Basis for Exception Request: High Medicaid Facility.
    In the June 19, 2015 notice, we also solicited comments from 
individuals and entities in the community in which HBC is located. We 
received no comments during the 30-day public comment period. 
Accordingly, CMS deemed the request complete on July 20, 2015, the end 
date of the public comment period.

IV. Decision

    This final notice announces our decision to approve HBC's request 
for

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an exception to the prohibition against expansion of facility capacity. 
As required by the November 30, 2011final rule and our public guidance 
documents, HBC submitted the data and certifications necessary to 
demonstrate that it satisfies the criteria to qualify as a high 
Medicaid facility. In accordance with section 1877(i)(3) of the Act, we 
have granted HBC's request for an exception to the expansion of 
facility capacity prohibition based on the following criteria:
     HBC is not the sole hospital in Vigo, Indiana, the county 
in which it is located;
     HBC certified 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; and
     With respect to each of the 3 most recent fiscal years for 
which data were available as of the date HBC submitted its request, it 
has an annual percentage of total inpatient admissions under Medicaid 
that is estimated to be greater than such percentage with respect to 
such admissions for any other hospital located in Vigo County, Indiana, 
the county in which it is located.
    Our approval grants HBC's request to add a total of 44 beds. 
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 HBC is 
licensed to exceed 200 percent of its baseline number of operating 
rooms, procedure rooms, and beds. HBC certified that its baseline 
number of operating rooms, procedure rooms, and beds is 44. 
Accordingly, we find that granting an additional 44 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: August 18, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2015-22856 Filed 9-9-15; 8:45 am]
 BILLING CODE 4120-01-P