(Medicare Claims Processing Manual)

30 - Medicare Rural Hospital Flexibility Program and Critical Access Hospitals (CAHs)  (Rev. 68, 10- 16-04)  A3-3610.19, HO -415.19, A3- 3610.20, HO -415.20  The Medicare law allows establishment of a Medicare rural hospital flexibility program by any State that has submitted the necessary assurances and complies with the statutory requirements for designation of hospitals as critical access hospitals (CAHs).   To be eligible as a CAH, a facility must be a currently participating Medicare hospital, a hospital that ceased operations on or after November 29, 1989, or a health clinic or health center that previously operated as a hospital before being downsized to a  health clinic or health center.  The facility must be located in a rural area of a State that has established a Medicare rural hospital flexibility program, or must be located in a Metropolitan Statistical Area (MSA) of such a State and be treated as bein g located in a rural area based on a law or regulation of the State, as described in 42 CFR 412.103.  It also must be located more than a 35- mile drive from any other hospital or critical access hospital unless it is designated by the State, prior to Janua ry 1, 2006, to be a "necessary provider".  In mountainous terrain or in areas with only secondary roads available, the mileage criterion is 15 miles.  In addition, the facility must make available 24 -hour emergency care services, provide not more than 25 beds for acute (hospital -level) inpatient care or in the case of a CAH with a swing bed agreement, 60 used for SNF -level care.  The CAH maintains a length of stay, as determined on an annual average basis, of no longer than 96 hours.   The facility is also required to meet the conditions of participation for CAHs  (42 CFR Part 485, Subpart F ).  Designation by the State is not sufficient for CAH status.  To participate and be paid as a CAH, a facility must be certified as a CAH by CMS.   A. - Grandfathering Existing Facilities   As of October 1, 1997, no new Essential Access Community Hospital (EACH) designations can be made.  The EACHs designated by CMS before October 1, 1997, will continue to be paid as sole community hospitals for as long as they comply with the terms, conditions, and limitations under which they were designated as EACHs.   30.1 - Requirements for CAH Services, CAH Skilled Nursing Care Services and Distinct Part Units  (Rev. 771, Issued: 12- 02-05, Effective: 01 -03-06, Implementation: 01- 03-06)  A CAH may provide acute inpatient care for a period that does not exceed, as determined on an annual average basis, 96 hours per patient.  The CAH's length of stay will be calculated by their A/B MAC (A) based on patient census data and reported to the CMS  regional office (RO).  If a CAH exceeds the length of stay limit, it will be required to develop and implement a corrective action plan acceptable to the CMS RO, or face termination of its Medicare provider agreement.   Items and services that a CAH provides to its inpatients are covered if they are items and services of a type that would be covered if furnished by an acute care hospital to its inpatients.  A CAH may use its inpatient facilities to provide post -hospital S NF care and be paid for SNF -level services if it meets the following requirements:    1. The facility has been certified as a CAH by CMS;    2. The facility operates up to 25 beds for either acute (CAH) care or SNF swing bed care (any bed of a unit of the facility that is licensed as a distinct- part SNF is not counted under paragraph (1) of this section); and   3. The facility has been granted swing- bed approval by CMS.   A CAH that participated in Medicare as a rural primary care hospital (RPCH) on September 30, 1997, and on that date had in effect an approval from CMS to use its inpatient facilities to provide post -hospital SNF care, may continue in that status under the same terms, conditions, and limitations that were applicable  at the time those approvals were granted.  A CAH may establish psychiatric and rehabilitation distinct part units effective for cost reporting periods beginning on or after October 1, 2004.  The CAH distinct part units must meet the following requirements:    1. The facility distinct part unit has been certified as a CAH by CMS;    2. The distinct part unit meets the conditions of participation requirements for hospitals;    3. The distinct part unit must also meet the requirements, other than conditions of participation requirements, that would apply if the unit were established in an acute care hospital;    4. Services provided in these distinct part units will be paid under the payment methodology that would apply if the unit was established in an acute care (non- CAH) hospital paid under the hospital inpatient PPS; Inpatient Rehabilitation Facilities in CAH s are paid under the Inpatient Rehabilitation Facility PPS (see Pub 100- 04, Chapter 3, Section 140 for billing requirements) and the Inpatient Psychiatric Units in CAHs are paid on a reasonable cost basis until a prospective payment system is created (expe cted in 2005);    5. Beds in these distinct part units are excluded from the 25 bed count limit for CAHs;    6. The bed limitations for each distinct part unit is 10; and  If a distinct part unit does not meet applicable requirements with respect to a cost reporting period, no payment may be made to the CAH for services furnished in the unit during that period.  Payment may resume only after the CAH has demonstrated that the unit meets applicable requirements.   30.1.1 - Payment for Inpatient Services Furnished by a CAH  (Rev. 530, Issued:  04- 22-05; Effective: 01 -05-04 - HPSA Bonus; 01 -03-05 - Physician Scarcity; 07- 01-01; Implementation:  07 -05-05)  For cost reporting periods beginning after October 1, 1997, payment for inpatient services of a CAH is the reasonable cost of providing the services. Effective for cost reporting periods beginning after January 1, 2004, payment for inpatient services of a CAH is 101 percent of the reasonable cost of providing the services, as determined under applicable Medicare principles of reimbursement, except the following principles do not apply:    The lesser of costs or charges (LCC) rule;    Ceilings on hospital operating costs;    The reasonable compensation equivalent (RCE) limits for physician services to hospitals; and   The payment window provisions for preadmission services treated as inpatient services under 40.3.  (Because CAHs are exempt from the 1 - and 3- day window provisions, services rendered by a CAH to a beneficiary who is an outpatient prior to that beneficiary s admission to the CAH as an inpatient, are not bundled on the inpatient bill.  Outpatient CAH services must be billed as such and on a separate bill (85x TOB) from inpatient services.  CWF and the shared system shall bypass the CAH provider numbers when applying the edits that compare hospital outpatient and inpatient bills to apply the window provisions.  Outpatient services rendered on the date of admission to an inpatient setting are still billed and paid separately as outpatient services in a CAH.)   Low Osmolar Contrast Material (LOCM) furnished as part of medically necessary imaging procedures for inpatients is paid for based on bill type 11X (for LOCM furnished during an inpatient stay covered under Part A), or 12X(for LOCM furnished to an inpatient  where payment is under Part B because the stay is not covered under Part A). Bills must include revenue code 636 along with one of the following HCPCS codes as appropriate:   A4644 Supply of low osmolar contrast material (100 -  199 mgs of iodine);   A4645 Supply of low osmolar contrast material (200 -  299 mgs of iodine); or   A4646 Supply of low osmolar contrast material (300 -  399 mgs of iodine).  Payment for inpatient CAH services is subject to Part A deductible and coinsurance requirements.  Inpatient services should be billed on an 11X type of bill.  30.1.1.1 - Payment for Inpatient Services Furnished by an Indian Health Service (IHS) or Tribal CAH  (Rev. 231, Issued 07- 23-04, Effective: 01 -01-04, Implementation: 01- 03-05)  Reimbursement to IHS or Tribal CAHs for covered inpatient services is based on a facility specific per diem rate that is established on a yearly basis from the most recently filed cost report information.   Payment for inpatient IHS or Tribal CAH services is at 100% of the facility specific per diem rate less applicable deductible and coinsurance.  Inpatient services should be billed on an 11X type of bill.   Beginning January 1, 2004, IHS or Tribal CAHs are paid 101% of the facility specific per diem rate.  30.1.2 - Payment for Post -Hospital SNF Care Furnished by a CAH  (Rev. 3030, Issued: 08- 22-14, Effective: ASC X12: January 1, 2012, ICD -10: Upon Implementation of ICD- 10, Implementation: ICD -10: Upon Implementation of ICD -10, ASC X12: September, 23 2014)   The SNF -level services provided by a CAH, are paid at 101% of reasonable cost.  Since this is consistent with the reasonable cost principles, A/B MACs (A) will now  pay for those services at 101% reasonable cost.  Hospitals must follow the rules for payment in 60 for swing -bed services.   Coinsurance and deductible are applicable for inpatient CAH payment.   All items on the ASC X12 837 institutional claim format are completed in accord with the implementation guide applicable to the dates of the stay.  All items on Form CMS -1450 are completed in accordance with Chapter 25.   30.1.3 - Costs of Emergency Room On -Call Providers  (Rev. 803, Issued: 01- 03-06, Effective: 04 -03-06, Implementation: 04- 03-06)  For dates of service on or after January 1, 2005, the reasonable costs of outpatient CAH services may include the reasonable compensation and related costs for an emergency room provider who is on call but not present at the premises of the CAH, if the provider is not otherwise furnishing provider services and is not on call at any other provider or facility.  The costs are allowable only if they are incurred under a written contract that requires the provider to come to the CAH when the providers presence  is medically required.  An emergency room provider must be a doctor of medicine or osteopathy, physician assistant, nurse practitioner, or clinical nurse specialist who is immediately available by telephone or radio contact, and available on site, on a 24-hour a day basis, within 30 minutes, or within 60 minutes in areas described in 42 CFR  1395(g)(5) .  For dates of service from October 1, 2001, through December 31, 2004, this provision covers only emergency room physicians.  An emergency room physician must be a doctor of medicine or osteopathy.   30.1.4 - Costs of Ambulance Services  (Rev. 1, 10- 01-03)  Effective for services furnished on or after December 21, 2000, payment for ambulance services furnished by a CAH or by an entity that is owned and operated by a CAH is, under certain circumstances, the reasonable cost of the CAH or the entity in furnishing those services.  Payment is made on this basis only if the CAH or the entity is the only provider or supplier of ambulance services located within a 35- mile drive of the CAH or the entity.  Reasonable cost will be determined without regard to any per -trip limits or fee schedule that would otherwise apply.   The distance between the CAH or entity and the other provider or supplier of ambulance services will be determined as the shortest distance in miles measured over improved roads between the CAH or the entity and the site at which the vehicles of the neares t provider or supplier of ambulance services are garaged.  An improved road is any road that is maintained by a local, State, or Federal government entity and is available for use by the general public.  An improved road includes the paved surface up to the front entrance of the CAH and the front entrance of the garage.   40 - Billing Coverage and Utilization Rules for PPS and Non -PPS Hospitals (Rev. 2388, Issued: 01- 20-12, Effective: 04 -22-12, Implementation: 04- 22-12)  A. - General