{"id":191,"date":"2016-09-24T11:50:45","date_gmt":"2016-09-24T11:50:45","guid":{"rendered":"http:\/\/blogs.luc.edu\/compliance\/?p=191"},"modified":"2016-09-24T11:50:45","modified_gmt":"2016-09-24T11:50:45","slug":"medicare-regulations-compliance-for-long-term-care-hospitals-within-hospitals","status":"publish","type":"post","link":"https:\/\/blogs.luc.edu\/compliance\/?p=191","title":{"rendered":"Medicare Regulations Compliance for Long-term Care Hospitals-within-Hospitals"},"content":{"rendered":"

Christine S. Kim<\/em>
\nAssistant Editor<\/em>
\nLoyola University Chicago School of Law, J.D. 2017<\/em><\/p>\n

 <\/p>\n

Due to the inextricably association between long-term care Hospitals-within-Hospitals (\u201cHwHs\u201d) and their respective Long Term Care Hospitals (\u201cLTCH\u201d), or host hospitals, efforts to circumvent compliance with federal reimbursement regulations have evolved. This blog article discusses the ways in which the Centers for Medicare and Medicaid Services (\u201cCMS\u201d) regulations as well as the U.S. Department of Health and Human Services Office of Inspector General (\u201cHHS-OIG\u201d) reports have strategized to reinforce compliance between the corresponding hospitals with Medicare regulations.<\/p>\n

Hospitals-Within-Hospitals <\/strong>\u00a0<\/em><\/p>\n

HwHs are separate providers licensed and certified as a hospital in its own right, and as archetypal constructs, are physically located inside respective \u201chost hospitals,\u201d or acute care hospitals. The establishment of HwHs represents the greatest growth<\/a> in the realm of LTCHs.<\/p>\n

Abusive Referral Programs<\/strong><\/p>\n

HHS OIG, as well as CMS, expressed that augmented regulation of HwHs was necessary for continuing compliance. \u00a0Specifically, CMS has expressed concern to possibilities of fraud due to the location of HwHs in LTCH hospitals, which creates an incentive to reap the supplementary Medicare reimbursement. Just this past March HHS-OIG recommended the state of Missouri<\/a> refund over $1,455,378 for unallowable Medicaid payments for individualized supported living habilitation services.<\/p>\n

Previously, with respect to reimbursements, CMS would distribute Medicare reimbursement to LTCHs on a free-for-service basis. Presently, however, CMS has adopted a new prospective payment system (\u201cPPS\u201d) in order to reflect a higher average cost of caring for patients in these hospitals due to its need for substantial long-term medical support, ventilators, and other medical procedures to treat organ failure or infectious diseases.<\/p>\n

In particular, CMS expressed a concern that LTCHs and their HwHs were reprocessing patients through abusive referral programs between one another. To illustrate, an HwH could discharge a patient to its host LTCH and then readmit that same patient, each time receiving a new PPS payment from Medicare, which would in turn, also trigger a Medicare payment to the host LTCH.<\/p>\n

Accordingly, on August 2004, CMS incorporated a rule<\/a>, which set a threshold of 25 percent on the number of Medicare referrals that HwHs could acquire from their host hospitals.<\/p>\n

CMS necessitated an increased level of organizational separation between the two entities, such as conducting its own services separately from its host hospital. Alternative ways to separate organizations entailed separate governing bodies between host hospitals and HwHs, separate chief medical and chief executive officers, and separate medical staffs.<\/p>\n

Moreover, CMS has also proposed requirements that HwHs must provide proof of financial independence from its host hospital. Specifically, CMS requires that HwHs must satisfy one of the following:<\/p>\n