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CMS ISSUES GUIDANCE ON HOSPITAL EMERGENCY SERVICES REQUIREMENTS

CMS ISSUES GUIDANCE ON HOSPITAL EMERGENCY SERVICES REQUIREMENTS

Guidance Applies to Specialty and All Other Hospitals

Except Rural Critical Access Hospitals

CMS Continues to Implement the Strategic Plan for Specialty Hospitals Reported to Congress in August, 2006

            The Centers for Medicare & Medicaid Services (CMS) issued guidance today clarifying the responsibility of hospitals provide emergency services if they participate in the Medicare program.  The guidance makes it clear that nearly all hospitals ‑ including specialty hospitals and others without emergency departments ‑ must be able to evaluate persons with emergencies, provide initial treatment, and refer or transfer these individuals when appropriate.  The guidance does not apply to critical access hospitals (CAHs), which are small, rural hospitals that are subject to separate regulation.

The guidance was issued in a Survey and Certification letter.  The announcement was made at the annual meeting between CMS and the Directors of the State Agencies that contract with CMS to survey hospitals and other Medicare providers and suppliers to ensure compliance with quality of care standards.

            Survey and Certification letters guide State Agency surveyors in determining whether hospitals meet all conditions of participation required to participate in the Medicare program.  Today’s letter reiterates Medicare’s long-standing requirement that hospitals have appropriate policies and procedures in place to address individuals’ emergency care needs 24 hours per day, 7 days per week.

            “Any hospital participating in Medicare, regardless of the type of hospital and apart from whether the hospital has an emergency department must have the capability to provide basic emergency care interventions.” said Leslie V. Norwalk, Esq., Acting Administrator of the Centers for Medicare & Medicaid Services.  “The guidance we are issuing today is part of an overall strategy to ensure quality care by assuring the rapid response to emergencies for all people with Medicare.”  

Three key requirements are (a) the capability to appraise the emergency situation, (b) providing initial treatment, and (c) referral when appropriate.  The letter clarifies that the Medicare Conditions of Participation (CoPs) do not permit a hospital to rely upon 9-1-1 services as a substitute for the hospital’s own ability to provide these services. 

In a separate development, CMS issued a proposed rule on April 13, 2007 that would increase transparency and public disclosure concerning emergency services.  The FY 2008 acute care hospital inpatient prospective payment system (IPPS) proposed rule would require a hospital to notify all patients in writing if a doctor of medicine or doctor of osteopathy is not present in the hospital 24 hours a day, seven days per week.  The hospital would be required to disclose how it would meet the medical needs of a patient who develops an emergency condition while no doctor is on site.  CMS also invited comments on whether current requirements for emergency service capabilities in hospitals with and without emergency departments should be strengthened in certain areas, such as the types of clinical personnel that should be present at all times and their competencies; the type of emergency response equipment that should be available; and whether hospital emergency departments should be required to operate 24 hours per day, 7 days per week.

Although the survey guidance issued today applies to all hospitals, it also implements one element of the Strategic and Implementing Plan for Specialty Hospitals that CMS reported to Congress in August of 2006, in accordance with the provisions of section 5006 of the Deficit Reduction Act of 2005.  Other actions CMS has taken to implement the Plan’s elements include the following:

1.      Continue making improvements in the inpatient hospital and ambulatory surgical center (ASC) payment systems to address the perception that specialty hospitals select more profitable DRGs and more profitable patients within those DRGs.

·         Inpatient Prospective Payment System (IPPS).  In the FY 2006 and 2007 final IPPS rules, CMS refined selected diagnosis related groups (DRGs), including the cardiac DRGs, to reflect the severity of a patient’s illness.  In the FY 2008 proposed IPPS rule, CMS is proposing a more comprehensive revision to the DRGs that would further improve the accuracy of inpatient acute care payments, while providing additional incentives for hospitals to engage in quality improvement efforts.  The proposed rule would replace the existing 538 DRGs with 745 new DRGs to account more fully for the severity of the patient’s condition.

CMS is also transitioning from basing DRG weights on hospital charges to estimated hospital costs.  Studies by the Medicare Payment Advisory Commission have indicated that hospitals charge significantly more than their costs for some types of services, such as medical supplies and radiology.  As a result, certain services are relatively more profitable, potentially contributing to the development of specialty hospitals which focus on high margin conditions.  By basing DRG weights on estimated costs, rather than hospital charges, hospital payments will be more closely aligned with the actual costs of patient care, and the incentive for hospitals to take higher margin cases will be reduced.  In October 2006, CMS began to phase in the new cost-based weights.  The phase-in will take three years.

·         ASC Payment System.  Consistent with its payment reform goals, CMS published its proposal for reforming the payment system for ambulatory surgical centers on August 23, 2006.  The proposal was intended to improve payment accuracy under the revised ASC payment system by more logically aligning payment rates across payment systems to eliminate financial incentives favoring one care setting over another.  The proposal would significantly expand the list of covered ASC services and provide ASC payment generally based on the Ambulatory Payment Classification relative payment weights used in the Outpatient Prospective Payment System to improve access to surgical services and payment accuracy.  At the same time, the proposed rule recommended capping ASC payments at the physician non-facility practice expense payment rate for services that are frequently performed in the physician office setting and that would be new to the ASC list of covered procedures in CY 2008.  CMS is reviewing the public comments on that proposed rule and expects to publish a final rule in the summer of 2007, with the revised ASC payment system to be implemented January 1, 2008.

2.      Transparency and Required Disclosure of Hospital Investment and Ownership Information.

·        Disclosure to Patients of Physician Ownership in Hospital.  In the FY 2008 IPPS proposed rule issued on April 13, 2007, CMS proposed to require hospitals to disclose to patients whether they are owned in part or in whole by physicians, and if so, to make available the names of the physician owners.  In addition, as a condition of continued medical staff membership, physicians would be required to inform patients of their ownership interests in a hospital at the time they refer patients to that hospital.

·         Disclosure to CMS.  Using its existing authority, CMS will be requiring hospitals to disclose information concerning physician investment and compensation arrangements.  By July 2007, approximately 500 hospitals will be required to complete a Financial Relationship Disclosure Report and submit information to CMS for review.  CMS is studying ways to implement a regular mandatory disclosure process that will apply to all Medicare participating hospitals.

3.      Transparency in Emergency Services Capability.

·         Disclosure to Patients.  The FY 2008 IPPS proposed rule would require a hospital to notify all patients in writing if a doctor of medicine or doctor of osteopathy is not present in the hospital 24 hours a day, 7 days per week.  The hospital would also be required to disclose how it would meet the medical needs of a patient who develops an emergency condition while no doctor is on site.

4.       Obligations of Hospitals with Specialized Capabilities to Accept Appropriate Transfer of Individuals with Emergency Medical Conditions, as Required by the Emergency Medical Treatment and Labor Act (EMTALA)

·          Accepting Emergency Transfers.  The FY 2007 IPPS rule added language to the EMTALA rules clarifying that every participating hospital with specialized capabilities, regardless of whether or not it operates an emergency department (ED), must accept an appropriate transfer for which it has capacity and the necessary specialized capabilities to treat the patient.

5.      Changes to Enrollment Form to Capture Type of Hospital.

·         Identifying the Type of Hospital.  CMS is developing changes to the Medicare provider enrollment application form and accompanying instructions that would clearly identify specialty hospitals as a separate category of hospitals.  Implementation of the revised form is expected by September 2007.

For more information on the emergency services guidance issued today, see:

www.cms.hhs.gov/SurveyCertificationGenInfo/PMSR/list.asp#TopOfPage

For more information about Specialty Hospitals, including the DRA Report to Congress, see:

www.cms.hhs.gov/PhysicianSelfReferral/