Licensure

Standard Met

Not Met, Action Needed

The department of the provider, remote location of a hospital, or satellite facility and the main provider are operated under the same license, except in areas where the State requires a separate license for the department of the provider, remote location of a hospital, or satellite facility, or in States where State law does not permit licensure of the provider and the prospective department of the provider, remote location of a hospital, or satellite facility under a single license. If a State health facilities' cost review commission or other agency that has authority to regulate the rates charged by hospitals or other providers in a State finds that a particular facility or organization is not part of a provider, CMS will determine that the facility or organization does not have provider-based status.

Ownership and Control of the MP
[NOTE THAT THE OWNERSHIP AND CONTROL REQUIREMENTS ONLY APPLY TO OFF-CAMPUS FACILITIES AND ORGANIZATIONS]

The business enterprise that constitutes the facility or organization is 100 percent owned by the provider.

The main provider and the facility or organization seeking status as a department of the provider, remote location of a hospital, or satellite facility have the same governing body.

The facility or organization is operated under the same organizational documents as the main provider. For example, the facility or organization seeking provider-based status must be subject to common bylaws and operating decisions of the governing body of the provider where it is based.

The main provider has final responsibility for administrative decisions, final approval for contracts with outside parties, final approval for personnel actions, final responsibility for personnel policies (such as fringe benefits/code of conduct), and final approval for medical staff appointments in the facility or organization.

The facility or organization is under the direct supervision of the main provider.

The facility or organization is operated under the same monitoring and oversight by the provider as any other department of the provider, and is operated just as any other department of the provider with regard to supervision and accountability. The facility or organization director or individual responsible for daily operations at the entity: a) maintains a reporting relationship with a manager at the main provider that has the same frequency, intensity, and level of accountability that exists in the relationship between the main provider and its departments; and b) is accountable to the governing body of the main provider, in the same manner as any department head of the provider.

The following administrative functions of the facility or organization are integrated with those of the provider where the facility or organization is based: billing services, records, human resources, payroll, employee benefit package, salary structure, and purchasing services. Either the same employees or group of employees handle these administrative functions for the facility or organization and the main provider, or the administrative functions for both the facility or organization and the entity are: a) contracted out under the same contract agreement; or b) handled under different contract agreements, with the contract of the facility or organization being managed by the main provider.

Clinical Services Integration

Professional staff of the facility or organization have clinical privileges at the main provider.

The main provider maintains the same monitoring and oversight of the facility or organization as it does for any other department of the provider.

The medical director of the facility or organization seeking provider-based status maintains a reporting relationship with the chief medical officer or other similar official of the main provider that has the same frequency, intensity, and level of accountability that exists in the relationship between the medical director of a department of the main provider and the chief medical officer or other similar official of the main provider, and is under the same type of supervision and accountability as any other director, medical or otherwise, of the main provider.

Medical staff committees or other professional committees at the main provider are responsible for medical activities in the facility or organization including quality assurance, utilization review, and the coordination and integration of services, to the extent practicable, between the facility or organization seeking provider-based status and the main provider.

Medical records for patients treated in the facility or organization are integrated into a unified retrieval system (or cross reference) of the main provider.

Inpatient and outpatient services of the facility or organization and the main provider are integrated, and patients treated at the facility or organization who require further care have full access to all services of the main provider and are referred where appropriate to the corresponding inpatient or outpatient department or service of the main provider.

Financial Integration

The financial operations of the facility or organization are fully integrated within the financial system of the main provider, as evidenced by shared income and expenses between the main provider and the facility or organization. The costs of a facility or organization that is a hospital department are reported in a cost center of the provider, costs of a provider-based facility or organization other than a hospital department are reported in the appropriate cost center or cost centers of the main provider, and the financial status of any provider-based facility or organization is incorporated and readily identified in the main provider's trial balance

Public Awareness

The facility or organization seeking status as a department of a provider, remote location of a hospital, or satellite facility is held out to the public and other payers as part of the main provider. When patients enter the provider-based facility or organization, they are aware that they are entering the main provider and are billed accordingly.

In the case of a hospital outpatient department or a hospital-based entity, the facility or organization must fulfill the obligations of hospital outpatient departments and hospital-based entities.

Location in Immediate Vicinity: Must meet any one of the following:

The facility or organization and the main provider are located on the same campus.

The facility or organization is located within a 35-mile radius of the main campus of the hospital or Critical Access Hospital that is the potential main provider;

The facility or organization is owned and operated by a hospital or CAH that has a disproportionate share adjustment (as determined under 42 C.F.R. 412.106) greater than 11.75 percent or is described in 42 C.F.R. 412.106(c)(2) and is: a) owned or operated by a unit of State or local government; b) a public or nonprofit corporation that is formally granted governmental powers by a unit of State or local government; or c) a private hospital that has a contract with a State or local government that includes the operation of clinics located off the main campus of the hospital to assure access in a well-defined service area to health care services to low-income individuals who are not entitled to benefits under Medicare (or medical assistance under a Medicaid State plan).

The facility or organization demonstrates a high level of integration with the main provider by showing that it meets all of the other provider-based criteria and demonstrates that it serves the same patient population as the main provider, by submitting records showing that, during the 12-month period immediately preceding the first day of the month in which the application for provider-based status is filed with CMS, and for each subsequent 12-month period: a) at least 75 percent of the patients served by the facility or organization reside in the same zip code areas as at least 75 percent of the patients served by the main provider; b) at least 75 percent of the patients served by the facility or organization who required the type of care furnished by the main provider received that care from that provider (for example, at least 75 percent of the patients of an RHC seeking provider-based status received inpatient hospital services from the hospital that is the main provider); or c) If the facility or organization is unable to meet the 75/75 criteria because it was not in operation during all of the 12-month period described in the previous sentence, the facility or organization is located in a zip code area included among those that, during all of the 12-month period described in the previous sentence, accounted for at least 75 percent of the patients served by the main provider.

The facility or organization qualifies for the Children's Hospital/NICU exception.

Management Contracts
[NOTE THAT THE MANAGEMENT CONTRACT REQUIREMENTS ONLY APPLY TO OFF-CAMPUS FACILITIES AND ORGANIZATIONS]

The main provider (or an organization that also employs the staff of the main provider and that is not the management company) employs the staff of the facility or organization who are directly involved in the delivery of patient care, except for management staff and staff who furnish patient care services of a type that would be paid for by Medicare under a fee schedule established by regulations at part 414. Other than staff that may be paid under such a Medicare fee schedule, the main provider may not utilize the services of ``leased'' employees (that is, personnel who are actually employed by the management company but provide services for the provider under a staff leasing or similar agreement) that are directly involved in the delivery of patient care;

The following administrative functions of the facility or organization are integrated with those of the provider where the facility or organization is based: billing services, records, human resources, payroll, employee benefit package, salary structure, and purchasing services. Either the same employees or group of employees handle these administrative functions for the facility or organization and the main provider, or the administrative functions for both the facility or organization and the entity are: a) contracted out under the same contract agreement; or b) handled under different contract agreements, with the contract of the facility or organization being managed by the main provider;

The facility or organization is operated under the same monitoring and oversight by the provider as any other department of the provider, and is operated just as any other department of the provider with regard to supervision and accountability. The facility or organization director or individual responsible for daily operations at the entity: a) maintains a reporting relationship with a manager at the main provider that has the same frequency, intensity, and level of accountability that exists in the relationship between the main provider and its departments; and b) is accountable to the governing body of the main provider, in the same manner as any department head of the provider;

The management contract is held by the main provider itself, not by a parent organization that has control over both the main provider and the facility or organization.

Joint Ventures

The joint venture facility or organization must be partially owned by at least one provider;

The joint venture facility or organization is located on the main campus of a provider who is a partial owner;

The joint venture facility or organization is provider-based to that one provider whose campus on which the facility or organization is located; and

The joint venture facility or organization meets the requirements for provider-based facilities and organizations regarding licensure; clinical services; financial integration; and public awareness. For example, where a provider has jointly purchased or jointly created a facility under joint venture arrangements with one or more other providers, and the facility is not located on the campus of the provider or the campus of any other provider engaged in the joint venture arrangement, no party to the joint venture arrangement can claim the facility as provider-based.