CAH Relocation

Chronology of Events Regarding CAH Replacement and Relocation

May 2005
IPPS Proposed Rule on Necessary Provider Status:

  • States ability to deem CAHs as necessary providers (NP) expires January 1, 2006
  • Replacement on campus, within 250 yards or adjacent property if purchased by December 8, 2003
  • Relocations must have been underdevelopment prior to December 8, 2003 and meet the following:
    • Applied to state by January 1, 2006
    • Meet same criteria
    • Serve the same population

August 2005
IPPS Final Rule on Necessary Provider Status:

  • No date or distance restrictions
  • No distinction between rebuilding and relocating
  • Must meet same criteria as when designated NP
  • All NPs that rebuild after January 1, 2006 will need to demonstrate that they are: 
    • Serving 75% of the same population
    • Retaining 75% of the same staff
    • Providing 75% of the same services

November 2005
Interpretive Guidelines Published for Survey and Certification:
All CAHs:

  • All CAHs that relocate must comply with "75% Test"
  • Overly prescriptive changes to definitions of mountainous terrain and secondary roads such as:
    • Elevation above 3,000 feet
    • Grades greater than 5 percent
    • Speed limit of less than 45 mph

Necessary Provider CAHs:

  • All NPs that rebuild or relocate after January 1, 2006 will need to  comply with more stringent 75% test such as:
    • Serving at least 75% of the original families with incomes at less than 100% of the Federal Poverty Level
    • At least 75% of the same billing codes and volume

Approval Process:

  • CAHs must file attestations of compliance in advance
  • Final determination not made for 1 year after move

AHA strategy:

  • Hospital awareness and education through conference calls, news articles, etc
  • Collect hospital comments and examples through
  • Continue meetings with CMS staff and political appointees
  • Gather support from Congressional offices

Letters from Members of Congress

Members of Congress in a strong show of support for CAHs requested Mark McClellan, M.D., CMS Administrator, to re-evaluate the interpretive guidelines used by CMS for approving CAH relocation and replacement construction.

View the letter from the Senate: PDF
View the letter from the House: PDF

AHA Comment Letter

AHA also commented on the issue.  We believe these guidelines go well beyond the regulations included in the fiscal year (FY) 2006 inpatient prospective payment system (PPS) that allow necessary provider CAHs to relocate as long as they continue to serve 75 percent of the same population, provide 75 percent of the same services and employ 75 percent of the same staff (commonly referred to as the “75 percent test”). These guidelines will not only impose a great, unnecessary burden on some CAHs, but will preclude many from securing financing for needed capital improvements.

July 10, 2006 - AHA comment letter on the CMS Survey and Certification interpretive guidelines regarding the location of CAHs relative to other facilities and Necessary Provider certification:  PDF

CMS Survey and Certification Interpretive Guidelines

View the CMS Guidance from November 14, 2005:  PDF


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