Under the Affordable Care Act’s amendments to the Stark Law, a Physician Owned Hospital (POH) cannot expand the aggregate number of operating rooms, procedure rooms or licensed beds beyond the number for which the hospital was licensed on March 23, 2010.
The Secretary of Health and Human Services may grant an exception to this prohibition to POHs qualifying as either an “applicable hospital” or a “high Medicaid facility” (as those terms are defined in the regulations).
POHs meeting one of these two exceptions were nonetheless still limited in that they could only request an expansion once every two years and the expansion was limited to no more that 200% of the rooms or beds that existed as of March 23, 2010.
These new rules relax these expansion limitations for “high Medicaid facilities,” but not “applicable hospitals”.
Though there are other requirements, a “high Medicaid facility” POH is one that for the three (3) most recent 12-month periods for which data is available, has an annual percentage of total Medicaid inpatient admissions that is estimated to be greater than the percent of such admissions for any other hospital located in the same county in which the POH is located (as determined by the data sources approved by CMS.
The new Final Rule, removes the limitation on the number of times a high Medicaid facility can request an expansion so long as the POH only has one request under review at any given time.
CMS also removed the 200% capacity limitation that previously existed for high Medicaid facilities seeking expansion.
High Medicaid facility POHs can now expand off of their main campus, but must continue to comply with Medicare rules and regulations regarding distance limitations relative to off-campus facilities and provider-based departments.
Source: CMS Provides Additional Expansion Opportunities for High Medicaid Physician-Owned Hospitals