Dive Brief:
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Wills Eye Hospital in Philadelphia will transfer patients requiring inpatient care for ophthalmology purposes to nearby Thomas Jefferson University Hospital after it lost an appeal to reverse CMS' February decision to deny its Medicare enrollment application, the Philadelphia Business Journal reports.
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CMS denied Wills Eye Hospital’s application for a hospital license because it is not “primarily engaged in providing inpatient care,” according to the Philadelphia Business Journal.
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The decision means that Wills Eye cannot admit ophthalmology patients and it will be reimbursed by Medicare at rates set for ambulatory surgical centers rather than the higher rates set for hospitals.
Dive Insight:
The decision raises questions about how CMS defines a hospital and illuminates contradictions in state and federal regulations.
When Wills Eye eliminated inpatient beds due to an agreement with Thomas Jefferson University Hospital for inpatients in its neurosurgery department, CMS classified it as an inpatient hospital. Since then, Wills Eye has been reclassified as an ambulatory surgical center. However, the arrangement with Thomas Jefferson did not work out and Wills Eye opened a new facility with four inpatient beds in 2013.
The CMS decision relies on a clause in the Social Security Act that defines a hospital as institution that primarily provides inpatient services. This requirement would seem to prevent microhospitals, which are on the rise, from achieving hospital status, even though they deliver a mix of outpatient and inpatient services.
Senator Bob Casey (D-PA) pointed out on the Senate floor in September that Wells Eye had an inpatient bed ratio of 17% the Cleveland Clinic has a ratio of 6.14%. Pennsylvania requires a hospital license for facilities like Wills Eye to treat patients who require more than four hours of operating time or four hours of recovery time. These requirements could prevent Wills Eye from performing some complex surgeries.
New payment models encourage patients to seek less costly outpatient care and CMS is beginning to tighten restrictions for providers to be reimbursed at inpatient rates. If these trends continue, CMS might consider clearer definitions of hospitals and consistent application to avoid any confusion.