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Phone: 952-595-9551
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Below is a Q and A that will be posted on the Health Care
Financing Administration's website in a few days regarding the
effect of the new legislation (BIPA) on the provider-based
regulations. This Q and A will be posted with the outpatient prospective
payment system Qs and As. Because of the importance of this information,
HCFA wanted to share the information, even prior to it being posted on the
web.
Q. How will the Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (BIPA) affect the Health Care Financing
Administration?s (HCFA?s) provider-based regulations?
A. Section 404 of BIPA significantly affects HCFA?s provider-based
regulations, which were included in the April 7, 2000, hospital outpatient
PPS final rule (65 FR 18433). Specifically, the new law, which was
signed by the President on December 21, 2000, includes a two-year ?grandfathering?
provision applicable to facilities or organizations treated as provider
based in relation to a hospital or critical access hospital (CAH) as of
October 1, 2000; alternative criteria for meeting the geographic location
requirement; and criteria for temporary treatment as provider-based.
Two-year ?grandfathering?
As a result of this new legislation, any hospital or critical access
hospital with facilities or organizations that were treated as
provider-based in relation to a hospital or CAH on October 1, 2000 will
continue to be so treated until October 1, 2002. For the purpose of
this provision, "treated as provider-based" includes those
facilities with formal HCFA determinations as well as those facilities
which do not have such determinations but were reimbursed as
provider-based as of October 1, 2000. These existing provider-based
facilities and organizations are not required to comply with the new HCFA
regulations under ??413.65(d), (e), (f), and (h) until October 1, 2002.
These sections of the regulations include the new provisions concerning
provider-based status requirements, joint ventures, management contracts,
and services under arrangement.
Existing facilities and organizations which qualify for grandfathering
under this provision of BIPA are not required to submit an
application for or obtain a provider-based status determination in order
to continue receiving reimbursement as provider-based. However,
existing provider-based facilities and organization will not be
exempt from the new Emergency Medical Treatment and Labor Act (EMTALA)
requirements for provider-based facilities and organizations under
??489.24(b) and?(i) or the regulations specifying the obligations of
hospital outpatient departments and provider-based entities under
?413.65(g), such as the requirements for off-campus facilities of
providing written beneficiary notices of coinsurance liability.
Geographic Location Criteria
Second, this law provides that those facilities or organizations not
exempt from requiring a provider-based status determination under BIPA are
deemed to comply with the "immediate vicinity" requirements of
the new regulations under ?413.654(d)(7) or the geographic proximity
criteria under the existing HCFA program guidance if they are located not
more than 35 miles from the main campus of the hospital or critical access
hospital. Therefore, this provision will exempt those facilities
within a 35-mile radius of the main provider from the immediate vicinity
requirement (?75/75 test?) under ?413.65(d)(7) or the geographic proximity
requirement in the existing HCFA program guidance (?2446 of the PRM-1 or
?2004 of the SOM)).
In addition, BIPA exempts certain provider-based facilities from both the
existing program requirements and the new regulations regarding geographic
proximity if the main provider has a disproportionate share adjustment
percentage greater than 11.75?percent or is described in section
1886(d)(5)(F)(i)(II) of the Social Security Act, and is either owned or
operated by a State or local government; is a public or private nonprofit
corporation that is formally granted governmental powers by a unit of
State or local government; or is a private hospital that has a contract
with a State or local government that includes the operation of clinics of
the hospital to assure access in a well-defined service area to health
care services for low-income individuals who are not entitled to Medicare
or Medicaid.
These geographic location criteria are permanent. Since those
facilities or organizations treated as provider-based on October 1, 2000,
are covered by the two-year grandfathering provision noted above, these
criteria will only apply to new facilities or organizations until October
1, 2002. New facilities or organizations that do not qualify
under the new geographic location criteria must meet the applicable
location requirements in existing HCFA program guidance, or on or after
the effective date of the regulations, the criteria in ?413.65(d)(7).
Criteria for Temporary Treatment as Provider-Based
Finally, BIPA also provides that a facility or organization that seeks a
determination of provider-based status on or after October 1, 2000 and
before October 1, 2002 may not be treated as not having provider-based
status for any period before a determination is made. Until a uniform
application is available, a request for provider-based status should be
submitted in the form of a letter to the appropriate HCFA Regional Office
(RO). For a facility or organization to qualify for temporary
treatment as provider-based, the request should at least include the
identity of the main provider and the facility or organization for which
provider based status is being sought, and supporting documentation to
demonstrate compliance with the provider-based status criteria in effect
at the time the application is submitted.
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