Limits eased on physician-owned hospital expansions for 2021: 5 details

CMS made it easier for physician-owned hospitals to expand in the 2021 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Facility final rule, released Dec. 2.

Five details:

1. The Affordable Care Act prohibits hospitals from adding operating rooms, procedure rooms and beds unless CMS grants an exception. In the final rule, CMS removed some of the provisions in the expansion exception process that allow hospitals to qualify as high Medicaid facilities.

2. CMS eliminated the cap on the number of operating rooms, procedure rooms and beds that can be approved in the exception.

3. The final rule also removes the restriction on where physician-owned hospitals can expand. Previously, the hospitals were only able to expand facilities on their main campus, but now they are able to expand other facilities as well.

4. Physician-owned hospitals deemed high Medicaid facilities can also now apply for exceptions more than once every two years as long as they only submit one expansion request at a time.

5. CMS also clarified that physician-owned hospitals should include all licensed beds when determining the hospital's baseline bed count. "This will provide additional flexibility to physician-owned hospitals that qualify as high Medicaid facilities, which, by definition, serve more Medicaid inpatients than other hospitals in the counties in which they are located," the agency stated in a news release about the final rule.

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