The Centers for Medicare & Medicaid Services’ Survey & Certification Group last week issued guidance clarifying how it will determine whether a facility qualifies as a hospital under Section 1861(e) of the Social Security Act, which requires Medicare hospitals (but not critical access or psychiatric hospitals) to be “primarily engaged” in providing services to inpatients. According to the guidance, S&C will take a multi-factor approach to determining whether a hospital meets the "primarily engaged" standard, examining such things as average daily census, average length of stay, the number of off-campus outpatient locations and provider-based emergency departments, the volume of inpatient and outpatient surgical procedures, and staffing patterns. S&C will not require specific inpatient to outpatient ratios to qualify, but will require hospitals to have at least two inpatients to be surveyed. Hospitals with an average daily census of less than two and an average length of stay less than two midnights will be at particular risk of scrutiny.