Recently we shared the changes in the definition of a Hospital by CMS. The trend of hospitals being terminated due to low volume or not being primarily engaged in treating inpatients is on the rise. We want to take this time to remind you of the following:
What is a Hospital?
482.1(a)(1) Hospital Definition and Regulatory Enforcement Authorities
In order to qualify for a provider agreement as a hospital under Medicare and Medicaid, an entity must meet and continue to meet all of the statutory provisions of §1861(e) of the Act, including the Condition of Participation (CoP) requirements. See also 42 CFR 488.3(a)(1) and 42 CFR 489.12. This means the entity must: Be primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons.
What is – Be Primarily Engaged?
“Generally, a hospital is primarily engaged in providing inpatient services under section 1861(e)(1) of the Act when it is directly providing such services to inpatients. Having the capacity or potential capacity to provide inpatient care is not the equivalent of actually providing such care. Inpatient hospital services are defined under section 1861(b) of the Act and in the regulations at 42 CFR Part 409, Subpart B. CMS guidance describes an inpatient as: “a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services …. Generally, a patient is considered an inpatient if formally admitted as an inpatient with the expectation that he or she will require hospital care that is expected to span at least two midnights and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight.” (Medicare Benefit Policy Manual, Chapter 1, §10, (https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf).
The “expectation of a two midnight stay” for an inpatient is that the intent of the physician was that the patient be admitted to the hospital for an inpatient stay as opposed to that of observation status which is an outpatient service. If the Average Daily Census (ADC) is less than 2 over a 3-month period, your organization may be at risk of Termination. If a survey team was to arrive at your facility and there are not at least 2 inpatients – the survey team WILL NOT perform the survey. Your organization is at risk of receiving a termination letter. If your organization is a low volume organization – it may be best to begin discussions with your State Agency or Regional Office to develop a plan of continuing participation in the Medicare/Medicaid program.