21st Century Cures Act Mid-Build Audits

Overview

Continuing Medicare payment under Hospital Outpatient Department (HOPD) prospective payment system for services furnished by mid- build off-campus outpatient departments for providers

On December 13, 2016, the 21st Century Cures Act became law. Section 16001 of the Act provided the criteria which off-campus departments of a provider must meet to comply with Mid-Build exception requirements. An off-campus department will be excepted from the Physician Fee Schedule payment under section 1833(t)(21)(C) of the Social Security Act for hospital outpatient claims for items and services furnished on or after January 1, 2018 (and should not use modifier ‘PN’ for such items) if it meets the requirements outlined below:

1. The Secretary received from the provider an attestation (pursuant to section 413.65(b)(3) of title 42 of the Code of Federal Regulations) no later than February 13, 2017, attesting that such department met the requirements of a department of a provider specified in 42 CFR 413.65(b)(3);
2. The provider included such department as part of the provider in its enrollment form (855A) in accordance with the enrollment process under section 1866(j); and
3. The department met the mid-build requirement (as defined in section 1833(t)(21)(B)(v)) and the Secretary received, not later than February 13, 2017, a written certification that the department met such requirement. The mid-build requirement specifies that, before November 2, 2015, the provider had a binding written agreement with an outside unrelated party for the actual construction of the department. Note: the written certification must be signed by either the chief executive officer or chief operating officer of the main provider (as defined by 413.65 (b) (2)) (or equivalent if such titles are not used by the main provider). Email submissions were acceptable.

The purpose of the Mid-Build Exception Audit was to determine if the above requirements were met, and notify the attesting provider, through a final determination letter, the audit outcome on each criterion found in Social Security Act §1833(t)(21)(B)(iv) or (vi). The Mid-Build Exception Audits commenced in July, 2018 and the hospitals were notified of the outcome of these audits in January of 2021 via the issuance of final determination letters.  However, out of an abundance of caution in response to questions raised by hospitals regarding the accuracy of the audits, the audit determinations of all providers that failed to qualify for the mid-build exception under section 1833(t)(21)(B)(iv) of the Social Security Act, as added by section 16001(a)(1)(B) of the 21st Century Cures Act (Pub. L. No. 114-255), have now been rescinded, and these audits will be reviewed by an independent audit reviewer.  Previously failing providers will receive updated audit determination letters informing them if they now qualify for the mid-build exception, or continue to fail to qualify for the exception, based on the findings of the audit compliance review of their audit.