CHA News Article

CMS Clarifies Definition of Hospital for Medicare Participation Purposes

The Centers for Medicare & Medicaid Services (CMS) issued a memo on Sept. 6 clarifying the definition of a hospital for Medicare participation purposes. Federal law requires that – except for critical access hospitals and psychiatric hospitals – to participate as a “hospital” in the Medicare program, an entity must be primarily engaged in providing diagnostic, therapeutic or rehabilitation services to inpatients. Facilities that primarily serve outpatients or skilled-nursing patients may not meet this definition.

CMS states that a hospital must have at least two inpatients at the time of a survey, or the survey will not be conducted. Instead, the surveyors will review the facility’s admission data to determine if the hospital has had an average daily census (ADC) of at least two inpatients and an average length of stay (ALOS) of at least two midnights over the past 12 months. If the ADC and ALOS are two or more, a survey will be attempted at a later date. If not, CMS will look at other factors to determine whether the facility meets the Medicare definition of a hospital. Hospitals with a low inpatient census — or that plan to build a new facility that will have a low inpatient census — should review the CMS memo with their legal counsel.