### 26566 Federal Register / Vol. 80, No. 89 / Friday, May 8, 2015 / Notices

**DEPARTMENT OF HEALTH AND**
**HUMAN SERVICES**

**Centers for Medicare & Medicaid**
**Services**

**[CMS–1640–PN]**

**Medicare Program; Request for an Exception to the Prohibition on**  **Expansion of Facility Capacity Under the Hospital Ownership and Rural**  **Provider Exceptions to the Physician**
**Self-Referral Prohibition**

**AGENCY :**  Centers for Medicare & Medicaid Services (CMS), HHS.

**ACTION :**  Proposed notice.

**SUMMARY :**  The Social Security Act prohibits a physician-owned hospital from expanding its facility capacity, unless the Secretary of the Department of Health and Human Services (the Secretary) grants the hospital’s request for an exception to that prohibition after considering input on the hospital’s request from individuals and entities in the community where the hospital is
located. The Centers for Medicare & Medicaid Services (CMS) has received a request from a physician-owned hospital for an exception to the prohibition against expansion of facility capacity. This notice solicits comments on the request from individuals and entities in the community in which the physician-owned hospital is located. Community input may inform our determination regarding whether the requesting hospital qualifies for an exception to the prohibition against expansion of facility capacity.

**DATES :**  Comment Date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m. on June 8, 2015.

**ADDRESSES :**  In commenting, please refer
to file code CMS–1640–NC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX)

transmission.

You may submit comments in one of three ways (please choose only one of the ways listed):

1. Electronically. You may submit electronic comments on this exception request to http://www.regulations.gov.
Follow the instructions under the ‘‘More Search Options’’ tab.

2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1640–NC, P.O. Box 8010, Baltimore, MD 21244–1850. Please allow sufficient time for mailed
comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to the following address ONLY: Department of Health and Human Services, Attention: CMS–1640–NC, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD

21244–1850.

For information on viewing public comments, see the beginning of the

**SUPPLEMENTARY INFORMATION** section.

**FOR FURTHER INFORMATION CONTACT :**  Patricia Taft, (410) 786–4561 or Teresa Walden, (410) 786–3755.

**SUPPLEMENTARY INFORMATION :** 
Inspection of Public Comments

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We post all
comments received before the close of the comment period on the following Web site as soon as possible after they
have been received: http:// www.regulations.gov. Follow the search
instructions on that Web site to view public comments.

We will allow stakeholders 30 days
from the date of this notice to submit
written comments. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of this notice, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, please phone 1–

800–743–3951.

I. Background

Section 1877 of the Social Security Act (the Act), also known as the physician self-referral law—(1) prohibits a physician from making referrals for certain ‘‘designated health services’’ (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), unless the requirements of an applicable exception are satisfied; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer)
for those DHS furnished as a result of a prohibited referral.

Section 1877(d)(3) of the Act provides an exception, known as the ‘‘whole hospital exception,’’ for physician ownership or investment interests held in a hospital located outside of Puerto Rico, provided that the referring physician is authorized to perform services at the hospital and the ownership or investment interest is in the hospital itself (and not merely in a subdivision of the hospital).

Section 1877(d)(2) of the Act provides an exception for physician ownership or investment interests in rural providers (the ‘‘rural provider exception’’). In order for an entity to qualify for the rural provider exception, the DHS must be furnished in a rural area (as defined in section 1886(d)(2) of the Act) and substantially all the DHS furnished by the entity must be furnished to individuals residing in a rural area.

Section 6001(a)(3) of the Patient
Protection and Affordable Care Act (Pub. L. 111–148) as amended by the
Health Care and Education Reconciliation Act of 2010 (Pub. L. 111– 152) (hereafter referred to together as ‘‘the Affordable Care Act’’) amended the whole hospital and rural provider exceptions to the physician self-referral prohibition to impose additional restrictions on physician ownership and investment in hospitals and rural providers. Since March 23, 2010, a physician-owned hospital that seeks to avail itself of either exception is prohibited from expanding facility capacity unless it qualifies as an ‘‘applicable hospital’’ or ‘‘high Medicaid facility’’ (as defined in sections 1877(i)(3)(E), (F) of the Act and 42 CFR 411.362(c)(2), (3) of our regulations) and has been granted an exception to the prohibition by the Secretary of the Department of Health and Human Services (the Secretary). Section 1877(i)(3)(A)(ii) of the Act provides that
individuals and entities in the community in which the provider requesting the exception is located must have an opportunity to provide input with respect to the provider’s application for the exception. For further information, we refer readers to
the CMS Web site at: http://www.cms.gov/Medicare/Fraud-andAbuse/PhysicianSelfReferral/Physician

_ Owned

_Hospitals.html.

II. Exception Request Process

On November 30, 2011, we published
a final rule in the Federal Register (76 FR 74122, 74517 through 74525) that, among other things, finalized § 411.362(c), which specified the process for submitting, commenting on, and reviewing a request for an exception to the prohibition on expansion of facility capacity. We published a subsequent final rule in the Federal Register on November 10, 2014 (79 FR


### 26567 Federal Register / Vol. 80, No. 89 / Friday, May 8, 2015 / Notices

66770) that made certain revisions. These revisions include, among other things, permitting the use of data from
an external data source or data from the Hospital Cost Report Information System (HCRIS) for specific eligibility

criteria.

As stated in regulations at § 411.362(c)(5), we will solicit community input on the request for an exception by publishing a notice of the request in the Federal Register

. Individuals and entities in the hospital’s community will have 30 days to submit comments on the request. Community input must take the form of written comments and may include documentation demonstrating that the physician-owned hospital requesting the exception does or does not qualify as an ‘‘applicable hospital’’ or ‘‘high Medicaid facility,’’ as such terms are defined in § 411.362(c)(2) and (3). In the November 30, 2011 final rule (76 FR 74522), we gave examples of community input, such as documentation demonstrating that the hospital does not satisfy one or more of the data criteria or that the hospital discriminates against beneficiaries of Federal health programs; however, we noted that these were examples only and that we will not restrict the type of community input that may be submitted. If we receive timely comments from the community, we will notify the hospital, and the hospital will have 30 days after such
notice to submit a rebuttal statement (§ 411.362(c)(5)(ii)).

A request for an exception to the facility expansion prohibition is considered complete as follows:

• If the request, any written comments, and any rebuttal statement include only HCRIS data: (1) The end of the 30-day comment period if CMS
receives no written comments from the community; or (2) the end of the 30-day rebuttal period if CMS receives written comments from the community,regardless of whether the physicianowned hospital submitting the request
submits a rebuttal statement (§ 411.362(c)(5)(i)).

• If the request, any written comments, or any rebuttal statement
include data from an external data source, no later than: (1) 180 days after the end of the 30-day comment period
if CMS receives no written comments from the community; and (2) 180 days after the end of the 30-day rebuttal period if CMS receives written comments from the community,regardless of whether the physicianowned hospital submitting the request
submits a rebuttal statement (§ 411.362(c)(5)(ii)). If we grant the request for an exception to the prohibition on expansion of facility capacity, the expansion may occur only in facilities on the hospital’s main campus and may not result in the number of operating rooms, procedure rooms, and beds for which the hospital is licensed exceeding 200 percent of the hospital’s baseline number of operating rooms, procedure rooms, and beds (§ 411.362(c)(6)). The CMS decision to grant or deny a hospital’s request for an exception to the prohibition on expansion of facility capacity must be published in the Federal Register in accordance with our regulations at § 411.362(c)(7).

III. Hospital Exception Request

As permitted by section 1877(i)(3) of the Act and our regulations at§ 411.362(c), the following physicianowned hospital has requested an exception to the prohibition on expansion of facility capacity:

Name of Facility: Doctors Hospital at

Renaissance.

Location: 5501 South McColl Road, Edinburg, Texas 78539.

Basis for Exception Request: Applicable Hospital.

We seek comments on this request
from individuals and entities in the community in which the hospital is located. We encourage interested parties to review the hospital’s request, which is posted on the CMS Web site at:http://www.cms.gov/Medicare/Fraudand-Abuse/PhysicianSelfReferral/ Physician

_ Owned

_Hospitals.html. We especially welcome comments regarding whether the hospital qualifies as an applicable hospital. Under § 411.362(c)(2), an applicable hospital is a hospital that satisfies all of the following criteria:

• The hospital is located in a county that has a percentage increase in population that is at least 150 percent of the percentage increase in population of the State in which the hospital is located during the most recent 5-year period for which data are available as of the date that the hospital submits its request.

• The hospital has an annual percent of total inpatient admissions under Medicaid that is equal to or greater than the average percent with respect to such admissions for all hospitals located in the county in which the hospital is located during the most recent 12- month period for which data are available as of the date that the hospital submits its request. The most recent 12- month period for which data are
available means the most recent 12- month period for which the data source
used contains all data from the requesting hospital and each hospital located in the same county as the requesting hospital.

• The hospital does not discriminate against beneficiaries of Federal health care programs and does not permit physicians practicing at the hospital to discriminate against such beneficiaries.

• The hospital is located in a State in which the average bed capacity in the State is less than the national average bed capacity during the most recent fiscal year for which HCRIS, as of the date that the hospital submits its request, contains data from a sufficient number of hospitals to determine a State’s average bed capacity and the national average bed capacity.

• The hospital has an average bed occupancy rate that is greater than the average bed occupancy rate in the State in which the hospital is located during the most recent fiscal year for which HCRIS, as of the date that the hospital submits its request, contains data from a sufficient number of hospitals to determine the requesting hospital’s average bed occupancy rate and the relevant State’s average bed occupancy

rate.

Individuals and entities wishing to submit comments on the hospital’s request should review the DATES and

**ADDRESSES** sections above and state whether or not they are in the community in which the hospital is

located.

IV. Collection of Information Requirements

This document does not impose information collection, recordkeeping, or third-party disclosure requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).

V. Response to Public Comments

We will consider all comments we receive by the date and time specified

in the **DATES** section of this preamble.

Dated: April 27, 2015.

Andrew M. Slavitt,
Acting Administrator, Centers for Medicare

& Medicaid Services.

[FR Doc. 2015–11138 Filed 5–7–15; 8:45 am]

**BILLING CODE 4120–01–P**