The CMS issued guidance for exceptions to the specialty hospital moratorium enacted last year as part of the Medicare Prescription Drug, Improvement and Modernization Act. It prohibits physicians from referring patients to specialty hospitals in which they hold financial interests.
The five-page guidance, known as a "change request," describes which specialty hospitals are covered by the moratorium and which are not. The moratorium does not apply to a class of hospital projects that were "under development" as of that date; the moratorium will expire June 5, 2005. According to the guidance, hospitals under development include those whose architectural plans were completed, whose funding was received, whose zoning requirements were met and whose necessary state approvals were received before Nov. 18, 2003.
The moratorium "expressly applies to hospitals that are primarily or exclusively engaged in the care and treatment of patients with cardiac or orthopedic conditions, patients receiving surgical procedures and patients receiving any other specialized types of services that CMS may designate," the guidance explains. Not subject to the moratorium are psychiatric, rehabilitation, children's, long-term-care and cancer hospitals not paid under the prospective payment system.
Healthcare lawyer Scott Becker of McGuireWoods said the guidance clarifies little for his specialty hospital clients and questioned whether the guidance addressed the issues raised by the moratorium. "Some people who have already spent millions of dollars will remain uncertain whether they will be grandfathered under the moratorium," Becker said. "And it is also unclear whether the advisory opinion suggested in the guidance is mandatory or discretionary. The guidance throws in a great deal of uncertainty that still needs to be cleared up." -- by Mark Taylor