CMS SOM App. W, Tag C-0836

A

CAH may continue to meet the location requirement of paragraph(c) of this section

based only if the CAH meets the following:]

(2) If a CAH or a necessary provider CAH operates an off-campus provider-based

location, excluding an RHC as defined in §405.2401(b) of this chapter, but

including a department or remote location, as defined in §413.65(a)(2) of this

chapter, or an off-campus distinct part psychiatric or rehabilitation unit, as

defined in §485.647, that was created or acquired by the CAH on or after

January 1, 2008, the CAH can continue to meet the location requirement of

paragraph (c) of this section only if the off-campus provider-based location or

off-campus distinct part unit 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.

(3) If either a CAH or a CAH that has been designated as a necessary

provider by the State [does not meet the requirements in paragraph (e)(1)

of this section, by co-locating with another hospital or CAH on or after

January 1, 2008, or] creates or acquires an off-campus provider-based

location or off-campus distinct part unit on or after January 1, 2008, that

does not meet the requirements in paragraph (e)(2) of this section, the

CAH’s provider agreement will be subject to termination in accordance

with the provisions of §489.53(a)(3) of this subchapter, unless the CAH

terminates the off-campus arrangement or the co-location arrangement,

or both.

Interpretive Guidelines §485.610(e)(2) & (3)

Section 42 CFR 485.610(e)(2) requires that if a CAH operates an off-campus provider-based facility as defined in §413.65(a)(2) (except for a rural health clinic (RHC)) or off-campus rehabilitation or psychiatric distinct part unit as defined at §485.647, that was

created or acquired on or after January 1, 2008, then the off-campus facility must meet

the requirement at 42 CFR 485.610(c) to be more than a 35 mile drive (or 15 miles in the

case of mountainous terrain or an area with only secondary roads) from any other CAH

or hospital. Off-campus CAH facilities that were in existence prior to January 1, 2008,

are not subject to this requirement.

If a non-IHS or non-Tribal CAH operates an off-campus provider-based facility, its

proximity to an IHS or Tribal CAH or hospital is not considered when assessing

compliance with the requirements of this section. Similarly, if an IHS or Tribal CAH

operates an off-campus provider-based facility, its proximity to a non-IHS or non-Tribal

CAH or hospital is not considered when assessing compliance.

The drive to another hospital or CAH is to be calculated from the provider-based

facility’s location to the main campus of the other hospital or CAH.

The distance to another hospital or CAH requirement does not apply to the following

types of facilities/services, because such facilities or services are not eligible for

provider-based status in accordance with §413.65(a)(1)(ii):

• Ambulatory surgical centers (ASCs);

• Comprehensive outpatient rehabilitation facilities (CORFs);

• Home Health Agencies (HHAs);

• Skilled nursing facilities (SNFs);

• Hospices;

• Independent diagnostic testing facilities furnishing only services paid under a fee

schedule, such as facilities that furnish only screening mammography services,

facilities that furnish only clinical diagnostic laboratory tests, or facilities that

furnish only some combination of these services;

• ESRD facilities;

• Departments of providers that perform functions necessary for the successful

operation of the CAH, but for which separate CAH payment may not be claimed

under Medicare or Medicaid, e.g., laundry, or medical records department; and

• Ambulances.

In the case of Federally Qualified Health Centers (FQHCs), although CMS rules permit

them to be provider-based departments of a hospital or CAH, it is unlikely that there are

new FQHCs that meet the provider-based criteria, since the Health Resources and

Services Administration (HRSA) requirements for separate FQHC governance make it

unlikely an FQHC could meet provider-based governance requirements. However, there

are grandfathered FQHCs that were in operation prior to April 7, 2000 which are

permitted to retain their provider-based status.

Those CAHs seeking a provider-based determination for newly created or acquired

provider-based departments, remote locations and/or psychiatric or rehabilitation units

located off-campus must submit an attestation to the Regional Office (RO), as specified

in §2254H of the SOM, who makes the determination of whether it satisfies the CAH

provider-based criteria at §485.610(e)(2), and the provider-based rules at §413.65. At the

conclusion of its review, the RO will notify the CAH and the SA (and accreditation

organization (AO), if applicable) of its determination.

If the SA or AO becomes aware of a provider-based off-campus facility that appears not

to comply with the provider-based location requirements, the SA or AO must notify the

RO. The RO will utilize the guidance in §2254H of the SOM to determine if the CAH

satisfies the provider-based location requirements at §485.610(e)(2). The RO will notify

the CAH as well as the SA (and the AO, if applicable) of its determination.

A CAH found out of compliance with the off-campus location requirements at

§485.610(e)(2) is subject to termination of its Medicare provider agreement. In such

cases the CAH is placed on a 90-day termination track, as outlined in §3012 of the SOM.

If the CAH corrects the situation, by terminating the off-campus provider-based

arrangement that led to the non-compliance during this 90 day period, then the provider

agreement is not terminated.

A facility facing termination of its CAH status as a result of non-compliance with

§485.610(e)(2) could also continue to participate in Medicare by converting to a hospital,

assuming that the facility satisfies all requirements for participation as a hospital in the

Medicare program under the provisions at 42 CFR Part 482. Under this scenario, the

CAH would apply to convert back to a hospital, with the effective date coinciding with

the date of termination of CAH status. A new CCN number would be assigned

accordingly.