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ASHA responds to CMS’ discussion on defining a hospital

Ambulatory Surgery Reimbursement Update, July 5, 2005

There is no legal basis for Medicare to establish one set of participation standards for the "traditional" hospitals and another for "specialty" hospitals. Rather, all hospitals should be treated the same for Medicare reimbursement, said the American Surgical Hospital Association (ASHA) in a June 23 letter to the Centers for Medicare & Medicaid Services (CMS).

The letter is in response to a May 4 inpatient prospective payment system proposed rule that CMS issued, which stated that specialty hospitals primarily treat outpatients. ASHA is concerned about this rule because the failure to meet hospital definitions could mean losing Medicare inpatient revenue and contracts for inpatient services with private health plans.

To read the letter, click here.

Specialty hospitals are almost always licensed by the state as acute care hospitals, ASHA President James Grant wrote in the six-page letter. "We believe that this fact also argues for a review of the definition as it applies to every hospital," he wrote.

The definition of a hospital is 40 years old and outdated and not many hospitals-whether specialty or general-would pass a strict reading of the statute. In fact, more hospitals perform outpatient surgery than ever before, Grant wrote. On average, 80% of all surgery is performed on an outpatient basis.

"The Association believes that CMS should abandon this attempt to discriminate against specialty hospitals," he wrote. " . . . We also do not understand why CMS would want to exclude specialized hospitals from the program."

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