AHA Urges CMS to Rescind Recent “Mid-Build Exception” Denials

March 25, 2021

In a letter to the Centers for Medicare & Medicaid Services, the AHA expresses concerns about the recent denials of our members’ requests for a “mid-build exception.” These denials result in inappropriately reduced payment rates for items and services furnished by certain off-campus provider-based departments (PBDs) that first billed Medicare for services furnished on or after Nov. 2, 2015. 

The 21st Century Cures Act authorizes CMS to deny a mid-build exception request only if the agency completed its audit of the provider by Dec. 31, 2018. In a March 23, 2021 email, CMS said that it “performed all audit activities in accordance with the requirements set forth in the” law when, in fact, the agency did not meet the Dec. 31, 2018 deadline: The audits were completed and hospitals were notified of the results more than two years after this statutory deadline. And, the issuance of these denials could not have come at a worse time for hospitals that are struggling both financially and with staff and resource shortages due to the pandemic.

As such, the denial determinations should be rescinded. Specifically, providers that submitted mid-build exception requests must be excluded from the definition of “off-campus outpatient department of a provider” in all instances where CMS has failed to timely render a contrary determination as part of a mid-build audit completed on or before Dec. 31, 2018.

In addition to the denials being time-barred, many of the denials are simply incorrect; of the 334 providers that requested the mid-build exception, CMS startlingly found that only 132 (40%) qualified, meaning that 202 (60%) failed to qualify. However, our members tell us that they actually did satisfy the statutory “mid-build” requirements. As explained in greater detail in our letter, the denials were based on Medicare Administrative Contractors’ misunderstandings of the information that the provider submitted or their interpretation of what the statute requires.

Read more in our letter below.

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