CMS ISSUES GUIDANCE FOR EXCEPTIONS TO SPECIALTY HOSPITAL MORATORIUM
The Centers for Medicare & Medicaid Services today announced details of its plan to implement a moratorium on physician investment in and referrals to certain specialty hospitals. Under the moratorium, a physician may not refer a patient to a specialty hospital in which he has an ownership or investment interest, and the hospital may not bill Medicare or any other entity for services provided as a result of a prohibited referral.
The moratorium was enacted by Congress as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). It became effective when the law was signed on December 8, 2003, and it will expire June 8, 2005.
The MMA moratorium expressly applies to hospitals that are primarily or exclusively engaged in the care and treatment of patients with cardiac or orthopedic conditions, patients receiving surgical procedures, and patients receiving any other specialized type of services that CMS may designate. In addition, the law specifies that the following types of hospitals are not subject to the moratorium: psychiatric hospitals, rehabilitation hospitals, children's hospitals, long-term care hospitals, and those cancer hospitals that are not paid under the inpatient hospital prospective payment system. CMS has decided not to expand the moratorium to other types of specialty hospital services at this time.
The MMA also excludes from the moratorium (or grandfathers), hospitals that were in operation before or under development as of November 18, 2003. In determining whether a hospital was under development as of that date, the law instructs CMS to consider whether architectural plans were completed, funding was received, zoning requirements were met, and necessary approvals from appropriate State agencies were received. CMS can also consider additional evidence that would indicate whether a specialty hospital was under development.
Parties wishing to obtain a determination as to whether their specific hospital was under development may request an advisory opinion under existing procedures established by CMS for advisory opinions on the application of the physician self-referral law. Specialty hospitals that had Medicare provider agreements in effect as of November 18, 2003 are considered to have been in operation as of that date and do not need to request a CMS determination.
The One-Time Notice can be found at http://www.cms.hhs.gov/manuals/pm_trans/R62OTN.pdf