CMS SOM App. W, Tag C-0830

Certification]

The CAH is located more than a 35-mile drive (or, in the case of mountainous

terrain or in areas with only secondary roads available, a 15-mile drive) from a

hospital or another CAH, or before January 1, 2006, the CAH is certified by the

State as being a necessary provider of health care services to residents in the area.

A CAH that is designated as a necessary provider on or before December 31, 2005,

will maintain its necessary provider designation after January 1, 2006.

Interpretive Guidelines §485.610(c)

A CAH that has not been designated by a State as a necessary provider prior to December

31, 2005 must be located more than a 35-mile drive (or in the case of mountainous terrain

or in areas with only secondary roads available, a 15-mile drive) from any other CAH or

hospital. An exception is made for Indian Health Service (IHS) or Tribal CAHs and

hospitals that are located less than the 35 or 15 miles from another hospital or CAH.

Given that IHS and Tribal CAHs and hospitals serve distinctly different populations, IHS

CAHs and hospitals are excluded from consideration when determining the proximity of

non-IHS hospitals seeking CAH certification to other CAHs or hospitals. For the same

reason, when an IHS or Tribal hospital applies for certification to participate in Medicare

as a CAH, CMS will consider only its proximity to other IHS and Tribal CAHs and

hospitals in determining whether it meets the location requirement under section

485.610(c).

If a CAH is located on an island and the location meets the following characteristics, the

CAH is considered to be in compliance with the distance requirements relative to other

hospitals and CAHs under §485.610(c):

• The island is entirely surrounded by water;

• The CAH is the only hospital or CAH on the island; and

• The island is not accessible by any roads.

CAHs located on islands that meet the criteria above are still required to comply with the

rural location requirement under §485.610(b).

A CAH that can document that it was designated by a State as a necessary provider CAH

prior to January 1, 2006, does not have to meet the location relative to other facilities

standard at §485.610(c). As of January 1, 2006, States do not have the authority to

designate any new necessary provider CAHs. Necessary provider CAHs that were

designated prior to that date are grandfathered by statute, subject to certain conditions if

they relocate (see the discussion related to §485.610(d)). ROs and SAs should have the

documentation related to a CAH’s original designation as a necessary provider in the file

on each CAH. If they do not, they should ask the CAH to supply copies of the original

necessary provider designation documents.

For applicants seeking a new CAH provider agreement, or for CAHs that seek to relocate

and do not have a grandfathered necessary provider designation, ROs will review the

application and make the determination whether it satisfies the CAH location relative to

other facilities standard at §485.610(c), using the guidance found in Chapter 2, §2256A

of the State Operations Manual. At the conclusion of its review, the RO will notify the

SA of its determination. Existing CAHs that are not grandfathered necessary provider

CAHs must be periodically evaluated to determine whether there are any more recently

certified Medicare-participating hospitals that are not more than a 35-mile drive, or 15-mile drive, as applicable, from the CAH. In the event that an existing CAH that is not a

grandfathered necessary provider no longer meets the minimum distance requirement, it

is provided the opportunity to avoid termination of its provider agreement by converting

to a certified Medicare hospital after demonstrating compliance with the hospital CoPs.