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CMS Issues Guidance for Surgery Centers Temporarily Enrolling As Hospitals During COVID-19 Public Health Emergency

On March 13, President Trump declared a COVID-19 national emergency under the National Emergencies Act. On April 3, CMS issued a Quality, Safety & Oversight memorandum QSO-20-24-ASC addressed to state survey agencies to provide guidance on processing applications from ASCs that are temporarily enrolling as hospitals during the COVID-19 pandemic.

ASCs considering a temporary conversion to hospital status should determine whether the facility can meet applicable Medicare participation requirements for hospitals and ensure that conversion to a hospital is consistent with state licensure and state emergency preparedness and pandemic plans. We must also be mindful that the CMS guidance applies only to Medicare participation requirements and that the ASC-to-hospital conversions must also be reviewed for compliance with federal and state fraud and abuse laws and other payor participation requirements. Considering the specialized and limited services furnished by ophthalmic ASCs, meeting the burdens of compliance with these authorities could be formidable.

Any Medicare-certified ASC wishing to enroll as a hospital during the public health emergency must notify its Medicare Administrative Contractor (MAC) by contacting the provider enrollment hotline and submit a signed attestation statement. The facility cannot be certified/enrolled both as an ASC and hospital at the same time. If an ASC enrolls as a hospital, it must meet the hospital Conditions of Participation, to the extent not waived, and would receive hospital payments, not ASC payments. ASC billing privileges would be deactivated for the duration of the time it is enrolled as a hospital. Once the public health emergency ends, so, too, will the ASC’s designation as a hospital. Facilities considering enrollment as a hospital should carefully review QSO-20-24-ASC to understand the attestation requirements.

While a facility’s desire to assist its community weather the crisis and to obtain enhanced reimbursement as a hospital may make it eager to participate, it is important that we understand that CMS has not waived all relevant Medicare hospital Conditions of Participation, including the following:

  • Nursing. Facilities must provide 24-hour nursing services furnished or supervised by a registered nurse.
  • Pharmacy. Facilities must have a pharmacy directed by a registered pharmacist or a drug storage area under competent supervision and provide a full-time, part-time, or consulting pharmacist who is responsible for all pharmaceutical activities.
  • Infection Control. Facilities must employ methods for preventing and controlling the transmission of infections within the hospital and between other providers, create an infection control surveillance plan to control healthcare-acquired infections, and establish a hospital-wide antibiotic stewardship program in accordance with national standards. (I would note that it is unlikely that the sterilizers utilized by many ophthalmic facilities would pass regulatory muster.)
  • Respiratory Services. Facilities must employ an MD director of respiratory care services and an adequate number of qualified respiratory therapists and technicians.

I offer a few comments regarding the advisability of converting an ophthalmic ASC to a hospital.The attestation described above requires the facility to attest that it will meet all applicable Medicare hospital participation requirements and failure to meet the Conditions of Participation could ultimately expose the ASC to liability.Before converting an ASC to hospital status, the facility must determine whether the enrollment is consistent with the state’s emergency preparedness or pandemic plan whether state law permits the facility holding itself out as providing hospital-level services without a hospital license. Importantly, while the facility may receive Medicare hospital reimbursement for services provided, it is uncertain whether Medicaid and commercial payors will do likewise.Finally, federal and state anti-kickback and self-referral laws should be considered and documented before a facility converts to hospital status.

If you are considering converting your ophthalmic ASC to a hospital during the public health emergency, there is much to consider in terms of regulatory, reimbursement, and legal issues.Tread carefully, and if you are considering moving forward, obtain the advice of knowledgeable counsel.

Should you have any questions, please contact OOSS’ Washington Counsel, Michael Romansky, at mromansky@OOSS.org.

CMS Guidance QSO-20-24-ASC