Ohio Regulation of Specialty Hospitals

Bill Introduced in Ohio Senate to Regulate Hospitals. On March 20, 2007, S.B. 120 was introduced in the Ohio Senate to require Ohio hospitals to operate emergency departments and maintain both Medicaid and Medicare provider agreements, Specifically the bill requires each hospital to:

• Operate an emergency department that offers emergency medical services to the general public twenty-four hours a day and seven days a week;

• Ensure that at least one physician and an adequate number of nursing personnel and other health care professionals who are qualified to provide care to patients seeking emergency medical services at the hospital are on duty and attending to the emergency department twenty-four hours a day and seven days a week

• Ensure that the emergency department has a designated space in the hospital that is readily accessible to the general public;

• Post a clear and easily readable sign on the exterior of the hospital indicating the location of the emergency department for individuals who seek emergency medical services at the hospital;

• Designate a medical staff member to direct the operations of the emergency department;

• Integrate emergency department services with the services provided by other departments of the hospital;

• Ensure that policies and procedures governing medical care provided by staff in the emergency department are established and regularly updated by the medical staff;

• Maintain both Medicare and Medicaid certification.

Hospitals exempt for the requirements include long-term acute care hospitals, alcohol and chemical dependency hospitals, rehabilitation hospitals, psychiatric hospitals, and hospitals in which medical services were provided prior to August 8, 2006, and that have not, since that date, done either of the following:

• Begun providing a service that would be subject to the section 3702.11 of the Revised Code (i.e., organ, bone marrow and stem cell transplantation; cardiac catheterization; open heart surgery; obstetrics and newborn; PICU; linear accelerator; cobalt radiation therapy unit; and/or gamma knife).

• Added more than ten per cent of the bed capacity that existed on August 8, 2006.

Full Text of S.B. 120
As introduced on March 20, 2007

Monitor the Progress of S.B. 120 in the General Assembly

Limited County Specialty Hospital Moratorium Adopted. In the closing days of the 126th Ohio General Assembly, legislation was enacted to regulate the growth of specialty hospitals in at least a few counties in Ohio. The bill is S.B. 116 and it applies a 90-day moratorium on specialty hospitals in counties with populations of 140,000 but less than 150,000. This language seems to affect only Greene, Clark and Licking counties. The moratorium was added as an amendment, sponsored by Robert Spada (R-Parma), to a larger bill on mental health insurance parity.

Note that the moratorium has been lifted as of June 28, 2007.

S.B. 116 specialty hospital moratorium language

Federal Regulation of Specialty Hospitals

The Original Moratorium. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 included a provision specifying that for the 18-month period beginning on December 8, 2003 and ending on June 8, 2005, physician ownership and investment interests in “specialty hospitals” would not qualify for "the whole hospital" exception under the Stark physician referral statute and regulations. As of midnight on June 8, 2005, the moratorium expired.

CMS Enrollment Suspension. After the expiration of the moratorium, CMS announced that it was suspending the enrollment of specialty hospitals into Medicare. The suspension was to end February 15, 2006, but the Deficit Reduction Act of 2005, signed into law before the CMS-imposed suspension ended, extends the suspension for six months while CMS developed a Strategic Plan to address concerns associated with specialty hospitals. The enrollment suspension terminated with the release of the report.

The CMS Strategic Plan. On August 10, 2006, CMS released its Final Report to the Congress and Strategic and Implementing Plan Required under Section 5006 of the Deficit Reduction Act of 2005. Major elements of the strategic plan include:

• Making the hospital inpatient prospective and ambulatory surgical center payment systems more accurate to address some of the incentives physicians have to form, or invest in, specialty hospitals;

• Implementing demonstration programs to support better hospital-physician collaboration, including gainsharing;

• Requiring the even if a hospital does not have an emergency department, it must nonetheless accept transfers of cases when there is the capacity to provide appropriate care;

• Requiring hospitals to disclose information concerning physician investment and compensation arrangements and to disclose to patients, in advance of providing care, that their staff physicians have an investment interest in the hospital; and

• Strict enforcement of Stark and Anti-Kickback rules for improper investments;

Final Report to Congress
   Appendix 1 Scope and Methodology
   Appendix II Specialty & Competitor Hospitals
   Appendix III DRA Section 5006 Survey Instructions and    Supplemental Questions (Survey instrument not posted)
   Appendix IV May 9, 2006 interim report to Congress
   Appendix V Bibliography

CMS Fact Sheet
CMS Press Release