Final Necessary Provider Ruling
Summary The Centers for Medicare & Medicaid Services (CMS) has demonstrated its understanding of the need for Critical Access Hospitals (CAHs), rural communities and capital markets to work together to improve the quality of care in rural America. As evidenced by the 75% rule, CMS has made the preservation of quality patient care its only requirement for the relocation/reconstruction of a CAH. The elimination of the time and distance requirements in the proposed rule enables rural communities, providers and financiers the ability to make the best decisions on a timely basis and absent of unrealistic time and distance restrictions.
FINAL NECESSARY PROVIDER RULING CMS has removed the proposed distinction between a replacement and relocation of a necessary provider CAH. CMS also eliminated the proposed distance requirement for replacing a facility. As a result, all CAHs that construct a new facility will be considered to have relocated and may be able to maintain the necessary provider designation if they meet the requirements below. In addition, CMS eliminated the proposed date restrictions.
CMS relocation/replacement requirements:
- The facility continues to serve at least 75% of the same service area.
- The facility continues to provide at least 75% of the same services.
- The facility is staffed by 75% of the same staff.
Ruben King-Shaw Jr., advisor to Pine Creek Healthcare, was invited to offer advice and counsel to leaders of Congress and the Bush Administration on the development and implementation of the Final Necessary Provider Rule. As the former chief operating officer and deputy administrator of the Centers for Medicaid & Medicare Services – appointed by President George W. Bush and United States Department of Health and Human Services Secretary Tommy G. Thompson, Mr. King-Shaw was deeply involved in the rural healthcare payment policy and quality initiatives. He was also directly responsible for Florida’s rural health system development in his earlier role as the former secretary of the Florida Agency for Health Care Administration.
CMS has again invited Pine Creek Capital to give them advice and comment on the implementation guidelines for the final rule and the education of the marketplace as the final rule is being implemented.
Pine Creek Healthcare Capital is committed to improving the health of America’s rural hospitals and continues to stay abreast of emerging rural healthcare issues.
For more information concerning the Final Necessary Provider Ruling, please contact Ray Brooks at 615-340-5505 or rjbrooks@pchcapital.net.
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