June 5, 2000

Nancy-Ann Min DeParle
Administrator
Health Care Financing Administration
200 Independence Avenue, S.W. - Room 309G
Washington, D.C. 20201

Re: HCFA-1005-FC Medicare: Prospective Payment System for Hospital Outpatient Services (65 Federal Register No. 68), April 7, 2000

Dear Ms. DeParle:

On behalf of our nearly 5,000 member hospitals, health care systems, networks and other providers of ambulatory care, the American Hospital Association (AHA) welcomes this opportunity to comment on the Health Care Financing Administration's (HCFA) interim final rule that establishes the prospective payment system (PPS) and policies for Medicare payment of hospital outpatient services.

Hospitals are proud of the unique role they play in providing 24-hour-a-day emergency care, critical care and other hospital outpatient services to the 37 million beneficiaries under Medicare Part B. Whether located in an inner city or rural town, a hospital is open to provide care to those who may have limited access to care in other settings. In addition, hospitals must meet stringent requirements for quality processes and life safety codes, and offer screening and stabilization to all those who enter their emergency rooms regardless of ability to pay. No other ambulatory care provider has these obligations or bears the costs of these regulatory requirements.

HCFA is preparing to implement a new payment system for hospital outpatient care provided to Medicare beneficiaries, which will have significant consequences for the delivery of outpatient care. The proposed rule was published on September 8, 1998. After a lengthy delay due to the year 2000 computer problems, the final regulation for the prospective payment system was published on April 7, 2000.

However, between the proposed and final regulations, the Balanced Budget Refinement Act of 1999 (BBRA) made further changes in the upcoming outpatient prospective payment system. The law:

• Increased payments during a transition to eliminate or lower the losses incurred by hospitals under the outpatient prospective payment system. Cancer hospitals are permanently protected from losses under the PPS. Rural hospitals with less than 100 beds are fully protected from losses due to the PPS for three-and-a-half years. Other hospitals have portions of their losses covered for three-and-a-half years.
• Established two new adjustments for the PPS. First, outlier payments are established for high cost services; and second, targeted additional payments are created for a specific list of high-cost drugs, biologicals, and devices. The rates for other services under the outpatient PPS are reduced to fund payments for outlier services and high-cost drugs and devices.

HCFA is seeking comments on these issues in the interim final rule. In addition to commenting on the BBRA issues, the AHA is also seeking clarification on certain sections of the provider-based rule and the inpatient-only defined services.

Additional Payments For Medical Devices, Drugs, and Biologicals

As required by the BBRA, the final rule provides for additional payments for certain drugs, pharmaceuticals, and biologicals. The BBRA limits the add-on payments for each specific drug, biological, or device to a period of at least two, but not more than three years. Eligible items are the following:

• orphan drugs;
• cancer therapy drugs and biologicals, including chemotherapeutic agents, antiemetics, hematopoietic growth factors, colony stimulating factors, biological response modifiers, bisphosphonates, and a device of brachytherapy (seeds);
• radiopharmaceutical drugs; and
• biological products.

Additional payments for new or innovative medical devices, new drugs, or new biologicals, which are also expensive relative to the total payment for the treatment, will be made to hospitals. As defined in the BBRA, a new item is one for which Medicare was not making payment as of December 31, 1996. In the final rule, HCFA restricted the list of new devices to those that are implanted with the patient. Outside of the rule making process through a letter to the manufacturers association, HCFA subsequently changed its policy and expanded the definition of a device beyond those that are implanted in the patient. Subsequently, the list of eligible items includes some catheters and medical supplies.

At least initially, HCFA will change the list of eligible drugs, biologicals, and devices on a quarterly basis. This requires HCFA to establish new codes for these items every quarter. As a result, the major software components for the PPS, the Outpatient Code Editor and the Pricer will also change on a quarterly basis.

For the payments for devices, drugs and biologicals, the BBRA required that the costs of these items must be removed from the existing APC groups so that duplicate payments would not occur. Drugs and biologicals are paid at 95 percent of the national average wholesale price (AWP) and devices are paid on the hospital's charge for the device reduced to costs by the hospitals cost-to-charge ratio. Moreover, the BBRA also required that the additional payments for the drugs, devices and biologicals be limited to no more than 2.5 percent of total outpatient payments.

AHA Comments -- In developing prospective payment system rates, HCFA's standard process has been to set payments based on existing codes. To add payments for new technology and services, HCFA typically will create new codes for the services that are not currently distinguishable in the charges on the bill and collect data on the specific charges for the new codes.

For the add-on payments, HCFA had separate charge information on many chemotherapy and other drugs; however, it lacked information on almost all devices and radiopharmaceuticals. For those items, HCFA added new codes and established payment rates without any information on the costs or charges of the drugs or devices. Since HCFA lacked any historical information to remove the duplicate costs from the APC, HCFA decided to reduce the conversion factor by 2.5 percent to accommodate any increased payment. This means, for example, that the total payments for emergency visits were reduced 2.5 percent to cover the payments for these items.

Thus, HCFA did not follow its usual procedures or the BBRA design of the transitional add-ons for drugs, biologicals and other devices. Consequently, the reduction to the conversion factor is not based on actual data. It is not known whether 1 percent or 2 percent or 3 percent will be paid out for these supplies. The financial risk to hospitals must be balanced with the fact that some hospitals may benefit from the expedited payment for new drugs or devices. However, it is not known how significant the overall cost is for many of these specific devices. Nevertheless, the AHA does not support HCFA's design which creates a risk of underpayments to hospitals. We understand that HCFA will be able to examine the total amount of payments made within nine months of implementation. Given the current design, we ask that if the add-on payments fail to total 2.5 percent that HCFA increase the conversion factor. If the payments are more than 2.5 percent, HCFA is statutorily required to reduce the payments for the add-on amounts and not the conversion factor.

Moreover, it was inappropriate for HCFA to change the definition of new devices to include non-implantables through a letter to the manufacturers. HCFA is also looking at whether to include devices where the manufacturers had made minor modifications in devices and had informed the FDA that a new FDA approval is not necessary. These devices do not appear by the statement of the manufacturer to be new. The list of items also includes manufacturer brand-name items which are newer, more expensive versions of existing devices. Allowing these items on the list may provide a competitive advantage to these manufacturers and, perhaps, a disadvantage to hospitals that choose to use the less expensive device. However, if the add-on list was developed by category of device, it appears that any device performing the same function as a device on the list would be eligible regardless of the clear statutory language that the device has to be new and expensive. Moreover, the pharmaceutical companies could argue that an older drug that has the same function as a new, expensive drug should also be on the list.

The AHA is also concerned about the possibility of steep price increases by manufacturers for the pass-through items. The AHA requests that HCFA publish as part of the proposed rule each year the national average payment for each device on the list so that hospitals can evaluate the prices that they are charged by the manufacturers. Moreover, the Office of the Inspector General should establish a process for hospitals to report any instances -- unlikely but not impossible -- of price gouging or suggestions of kick-back arrangements. Until we know more about how this process will actually work, the AHA recommends that HCFA act cautiously and not expand the definition of devices eligible for a pass through at this time.

HCFA also sets the payment for new drugs at 95 percent of AWP. Physician offices are also paid for drugs at 95 percent of AWP, which the government believes overcompensates physicians because it is above acquisition costs. However, compared to physician offices, hospitals employ pharmacists and are acquiring new, expensive systems to reduce medication errors. Acquisition cost clearly excludes the cost of the clinical services for dispensing of a drug. Moreover, acquisition cost also excludes hospital costs for quality review, billing, medical records and other general and administrative costs. It is very likely that the difference between acquisition costs and 95 percent of the AWP is completely insufficient to cover direct and indirect pharmacy costs. The AHA asks that HCFA investigate the costs of dispensing drugs in the hospital setting.

Finally, the quarterly updating process may pose a strain on the intermediaries' and HCFA's systems and delay claims payment. Given the initial difficulty in implementing the prospective payment system coupled with an October 1, implementation date for the home health prospective payment system, we are concerned that the prompt payment of claims will be disrupted, triggering a cash flow crunch for hospitals. The AHA requests that HCFA develop a contingency plan to assure smooth cash flow for hospital outpatient services in case of system problems on October 1, 2000 or January 1, 2001.

Outliers

The BBRA requires HCFA to include outliers in the outpatient PPS. Specifically, HCFA is required to create an outlier pool not to exceed 2.5 percent of total PPS payments (3 percent after 2003) and to specify a cost threshold to identify outlier cases and a payment percentage for the portion of costs over the threshold.

HCFA decided to set the outlier pool at 2 percent of total projected payments. This means that the conversion factor was reduced by 2 percent to provide for the outlier payments. But HCFA set the outlier thresholds to pay out 2.5 percent of PPS funds. HCFA believes the actual outlier cost will be less than projected because coding will improve under the PPS. As a result, the final rule specifies that claims with costs in excess of 2.5 times the payment amount will qualify as outliers. An additional payment will be made of 75 percent of the costs in excess of 2.5 times the payment amount.

Until 2002, HCFA will identify outliers based on the total payments and charges for all services on a bill rather than on the payment and charges for each APC. Also, during this interim period, costs will be estimated by adjusting total charges on the bill using an overall hospital-specific cost-to-charge ratio.

AHA Comments - We ask that HCFA clarify how series bills - monthly bills for multiple sessions such as chemotherapy, or partial hospitalization - factor into the outlier calculation. Moreover, since HCFA allows some limited multiple billing for multiple clinic visits on the same day, we ask that HCFA clarify how these services are treated in the outlier calculation.

Transitional Payments

As required by the BBRA, the final rule adds transitional payments for services furnished before January 1, 2004 to limit losses facilities might otherwise face. Essentially, the payment cushions hospitals from a percent of their losses if they have a lower percentage of their costs covered by the Medicare payment under the PPS than prior to the PPS.

The amount of the transition payment is based on a comparison of a hospital's PPS amount with its pre-PPS amount.

• The PPS amount is defined as the amount payable under the outpatient PPS for the hospitals covered outpatient department services, excluding the effects of the transition payments and including coinsurance and deductible amounts.
• The pre-PPS amount is defined as the amount equal to: the hospital's reasonable cost for outpatient services in the transition period multiplied by the outpatient payment-to-cost ratio for the hospital. The payment-to-cost ratio is defined as the hospital's Medicare outpatient payments during the cost reporting period ending in 1996 -- less the formula-driven overpayment from the BBA -- divided by the Medicare costs of those services for that period.

The transition payments decline over the period and end after CY 2003. Small, rural hospitals with less than 100 beds can incur no losses due to the PPS through CY 2003. Specifically, these hospitals are guaranteed to receive at least 100 percent of their pre-PPS amount, the so-called hold-harmless. Bed size is defined using the same calculation used for indirect medical education, as the available inpatient acute care days excluding nursery days, observation days, long-term care and exempt-unit days.

Medicare-designated cancer hospitals receive the same protection as small rural hospitals but on a permanent basis.

As required by the BBRA, HCFA will make interim payments to hospitals for the transition. Final payment is made via the cost reporting process for each PPS year. At this time, it is expected that these interim payments for the transition will begin August 31 and continue on a monthly basis.

AHA Comments -- Although the transition payments fall short of returning hospitals to the level of payments received prior to the BBA, the payments are important to protect hospitals during the learning process with the prospective payment system. We ask that HCFA clarify the following issues:

• Does geographic reclassification for either the wage index area or the standardized amount affect a hospital's eligibility for the rural hold-harmless? The BBRA was specific in the statutory language and refers to "located in a rural area" and not to the payment status. Thus, the AHA believes that geographic reclassification for the wage index or the standardized amount is not relevant for the hold-harmless rural payment provision. [HCFA should note that section 401 of the BBRA on the group of urban hospitals that are reclassified as rural hospitals instructs the Secretary to treat these hospitals as if they were located in the rural area. Thus, these hospitals should be included in the rural hold-harmless.]
• Because the regulations defining available beds have been modified by HCFA letters and memoranda, the AHA asks HCFA to give the exact definition and calculation of available beds along with citing the appropriate fields from the cost report.
• What year is used to determine bed size? What about hospitals that changed their inpatient capacity prior to July 1, 2000? What about hospitals that change their inpatient capacity during the three-and-a-half-years of the transition? We suggest that HCFA allow hospitals the ability to downsize capacity and qualify for the hold-harmless.
• What is the definition of covered charges used for calculation of the hold harmless? For instance, if HCFA excludes the charges of incidental procedures or procedures that are consolidated into the main procedure through the outpatient code editor, the total charges for the procedure and the hold-harmless will be underestimated.

The AHA commends HCFA for developing a plan to pay interim payments on a timely basis. However, many small rural hospitals may be unable to wait two months to receive the additional payments. Moreover, the interim payment level for these hospitals may need to be higher. The AHA asks that HCFA use its hospital-specific impact analysis to create a process so that the interim payments for these small rural hospitals would begin concurrently with the start of the prospective payment system.

Provider-based Requirements

Hospital departments, clinics, or satellite facilities can be located on or off the hospital's main campus. Currently, these "provider-based" entities must meet specific requirements laid out in Program Memorandum A-96-7. The final rule adds new requirements for determining provider-based status and thereby qualifying for Medicare hospital-based facility payments. All of the requirements must be met to retain the provider-based designation.

The AHA asks that HCFA clarify the requirements around the provider-based definition. Brief descriptions of the issues and our questions follow:

Proximity -- Provider-based entities must be located in close proximity to the main provider except where the hospital can demonstrate that at least 75 percent of the clinic's patients reside in the same zip codes as at least 75 percent of the patients served by the main hospital. This criterion was added in the final rule.

AHA Comment -- It is unclear how this requirement works in practice. We believe that HCFA should allow hospitals several ways to calculate the standard so that it is somewhat less arbitrary. For example:

• The zip codes of the main hospital and the clinic could be sorted by population from high to low. The list of zip codes would be cut off after 75 percent of patient population is reached. If the zip codes for 75 percent of the clinic's patients are in the same or a subset of the same zip codes as the main hospital, the criterion is met.
• The zip codes of the main hospital and the clinic patients are matched. If 75 percent of the hospital's patients and 75 percent of the clinic's patients are in the matched zip codes, the criterion are met.
• The definition of "patient" should include all services (inpatient and outpatient) billed for by the main provider.

HCFA did not address the issue of clinics or remote locations of providers that have different patient populations from the main provider due to tourism. How can having two different patient populations impact substantively on whether the clinic or other provider is an integral and subordinate part of the main provider? Even on-campus services, such as gerontology and obstetrics, may serve distinctly different populations. We ask that HCFA clarify the market area requirement to permit hospitals located in tourist areas such as Orlando, Florida or Myrtle Beach, South Carolina or other similar areas to use a 30-mile radius instead of the 75 percent rule. Similar to the 75 percent rule, the 30-mile radius is also used to determine the market area for sole community hospitals. Otherwise, HCFA would be discriminating against hospitals in states with significant tourism.

Moreover, HCFA did not address the issue of specialty hospitals such as rehabilitation or psychiatric hospitals that use satellite inpatient facilities to increase access to their unique services. This allows these hospitals under existing rules for excluded facilities to transfer some of their existing capacity to a nearby area - still within the metropolitan area. The market area definition of 75%/75% is impossible for these hospitals to meet because even though these are the same type of patients they are not the same patients. These facilities meet all other standards of clinical and financial integration with their satellites. The AHA asks that HCFA also use a 30-mile radius for market area for inpatient satellites.

Without perhaps intending to in the definition of market area, HCFA threatens the existing multi-campus design of acute or post-acute hospitals in urban areas. If these satellite hospitals must be separately licensed, this would require the duplication of what is currently shared overhead costs and services.

Process -- A hospital must contact HCFA to determine provider-based status before it bills for services provided by any new facility or organization. A hospital that has one or more provider-based entities must report to HCFA any material change in the relationship between it and provider-based entities, such as entry into a new or different management contract that could affect the provider-based status of an entity.

These requirements are effective October 10, 2000. Until that date, the current policy is in effect. If a provider fails to meet these new requirements and it has not received a determination of provider-based status, HCFA will not recover any past overpayments before October 10, 2000 if the management of the facility made a good faith effort to:

• meet the current requirements for licensure and public awareness;
• see that the professional services of physicians and other practitioners were billed with the correct site-of-service code;
• bill all services to Medicare beneficiaries as if they had been furnished by a department of the main provider or its provider-based entity.

If HCFA determines that a prior determination was in error and or entity should not be considered provider-based, HCFA will notify the main provider. Designation of the facility as provider-based entity will cease with the next cost reporting period following notification, but not less than six months after the date of notification. During this interim time period, the entity will not be paid as a hospital outpatient site, instead it will be paid under a reduced amount until it can reenroll as a free-standing facility. HCFA does not specify what the coinsurance is during this period.

AHA Comments -- Many hospitals have clinics that have existed for decades providing services to patients in their community. It is not clear what HCFA expects the hospitals to do about certifying these clinics or departments after October 10, 2000.

• Since the provider-based criteria apply to on- and off-site departments, does HCFA expect that every hospital should have its on- and off-site departments reviewed?
• If a hospital makes an application to have its departments reviewed by October 10, 2000, it may take several years for HCFA to review their status due to the potential large number of applications. The AHA recommends that HCFA not seek recoupments for any period prior to its review of a hospital's status as long as the hospital requests such review on a timely basis.
• What are the hospital's obligations under the correct site-of-service billing requirement to physicians who are not hospital employees or contractors? The AHA already asked this question in its comments for the proposed rule and HCFA has not answered. We suggest that hospitals be required only to add language to the one-time physician acknowledgement on the importance of billing the correct site-of-service.
• If an entity loses its certification as a provider-based site, what is the payment method basis -- amount approximating the physician fee-schedule or the ASC fee schedule -- for the "reduced payment" during the period before to the next cost reporting period? What coinsurance should be charged to the beneficiaries? The AHA suggests that the entity be paid as hospital-based during this period. Otherwise, there is a mismatch between the program payment and the copayment.

Management Contracts -- HCFA states that provider-based entities cannot be wholly operated by a management company. Does this requirement also apply to departments on the main campus? For example, the provider has a wound care clinic located in the main hospital which provides both inpatient and outpatient services, and it is managed entirely by a management company. Or a hospital hires the best rehabilitation company in the country to completely manage and operate its rehabilitation unit. Does this mean that the rehabilitation unit should now apply to be a separate hospital? We understand that HCFA was primarily concerned with turn-key operations of the off-site locations. The AHA suggests that HCFA clarify that the requirement related to management companies should apply only to off-site outpatient services. Otherwise, this requirement and others represents a heavy-handed regulatory intrusion into cost-efficient management and operations.

Main Campus -- HCFA defines the main campus as covering buildings and structures within 250 yards of the main campus. What is the basis of using 250 yards as a measure? How will the 250 yards be measured -- building to building, door to door? HCFA should explicitly state its rationale for a 250 yard limit or drop the requirement.

Joint Ventures -- The rule would prohibit any joint ventures from being considered provider-based. The rule seems to indicate that a joint venture is an entity that is not 100 percent owned by the main provider. The AHA asks HCFA to specify a definition of a joint venture. Moreover, the AHA asks HCFA to respond to the following questions:

• Is diagnostic imaging equipment considered to be a joint venture if it is financed through operating leases or sale and leaseback arrangements where there is no ownership by the hospital? If so, then are hospitals or departments of hospitals located in leased buildings not hospitals? Are the heating and air conditioning vent systems, which may be financed through operating leases, part of the hospital? The AHA believes that the provider-based criteria should not be expanded unreasonably to include the financing arrangement of capital. This is consistent with HCFA's longstanding definition of capital which includes leased buildings and equipment.
• Many rural hospitals are only able to provide MRIs and CT scans through the use of mobile services. The hospitals pay the mobile service a fee and consider it to be an under- arrangement service. Patients benefit because they are spared a trip to a location outside their community; in fact, mobile services may provide such patients their only opportunity to receive these services. The discussion on the bundling requirement says specifically that "all diagnostic tests that are furnished by a hospital, directly or under arrangements, to a registered hospital outpatient during an encounter at the hospital are subject to the bundling requirement." Thus, the hospital must bill for those services. Does this mean that these are provider-based services? If not, won't access in rural communities be significantly disrupted, thus increasing the disparity in the Medicare benefit between urban and rural areas of the country? The AHA insists that mobile services to patients of rural hospitals, if delivered on the hospital's campus, must be retained as provider-based services to protect the delivery of care in rural America.

Beneficiary notice -- The new regulation states that patients in a hospital outpatient department or a hospital-based entity that is not located on the main provider's campus must receive a written notice, prior to the delivery of services, of the amount of the beneficiary's potential financial liability. It is our understanding that the inclusion of the requirement to specify the amount was an error. We ask that HCFA correct the text of the regulation because it is not possible to code, group into APCs, and determine the copayments for services before they are delivered. In addition, the text states that "if the beneficiary is unconscious or under great duress, … the notice must be provided prior to the delivery of services, to the beneficiary's authorized representative." This appears to be contrary to the advice of the Office of the Inspector General relating to best practices for EMTALA as well as HCFA's own enforcement guidance. Moreover, we are concerned that it would jeopardize the health and safety of patients to require that hospital staff search for an authorized representative to hand the written notice to before treating the patient. We insist that HCFA remove this requirement.

Medicaid overlap - HCFA does not discuss on access to outpatient care for Medicaid or dual-eligible patients would be if a hospital lost its provider-based designation for its clinics. The AHA is aware of many clinics that provide services to the indigent, dual eligibles, or to Medicaid managed care patients that will not meet the service area definition. Moreover, children's hospitals may have outreach clinics that provide care in outlying areas. These hospital clinics may also not meet the service area definition. The AHA is concerned that HCFA has not fully examined the consequences of this set of rules. If the same set of rules apply to Medicaid, it may result in diminished access and health to the poor and to children. We suggest that HCFA develop an exception to the market area definition for these populations. Finally, HCFA should give due deference to the states to define the designations in a way that makes the most sense to them.

Overall, the AHA is concerned that the provider-based rules are overly intrusive and not thoroughly fleshed out to the degree needed to implement these rules. The AHA suggests that in the interim HCFA not require all the definitions to be met by providers.

EMTALA Provisions

The final rule extends a hospital's EMTALA obligations to provider-based facilities on-campus and to provider-based outpatient departments that are off-campus. It also expands the definition of "comes to the emergency department." We are requesting clarification on a number of uncertainties in the EMTALA provisions, much of which was new to the final rule.

The preamble indicates that the reason for expanding EMTALA obligations is to ensure that individuals who enter the wrong part of the hospital are protected. As drafted, the regulations could have the unintended effect of interfering with appropriate responses to an individual in need of emergency services and create needless confusion about what is required of a hospital.

Obligations of off-campus outpatient departments -- A hospital is required to have specified protocols in place for handling individuals requesting services for an emergency medical condition at an off-campus outpatient department.

AHA Comments - The specificity of the protocol requirements has the potential to interfere with what would otherwise be an appropriate response by a hospital.

• The regulations should explicitly recognize the appropriateness of using emergency medical services (EMS) personnel and calling "9-1-1" or other designated emergency number." Current experience demonstrates that the public will choose an emergency department over another type of facility when the individual believes he or she has an emergency medical condition. It is the exception when such an individual will present to an off-campus department. The few examples we have identified where an individual presented to an off-campus department with an emergency medical condition involved chest pain or a cardiac condition. In those exceptional circumstances there should be no ambiguity that calling EMS is an appropriate response. Many of these departments will be specialty clinics and may be part of specialty hospitals. The suggestion that a hospital dispatch staff to the department and the preamble discussion regarding the use of EMS could be interpreted as a bias against the use of EMS. The regulations should also clarify that the requirement for direct contact between the off-campus department and emergency personnel at the main hospital campus does not have to occur before other appropriate action is taken. Making such contact should not delay responding to an individual.
• Lack of guidance on when an individual at an off-campus department is covered under EMTALA. The ambiguity regarding a "request for examination or treatment" in the context of an off-campus site could have the effect of requiring that everyone coming to a department be approached as potentially having an emergency medical condition. While the preamble states that not all areas of the hospital must be equipped and staffed to provide emergency care and that not every appearance by an individual at an off-campus department will necessarily trigger an EMTALA obligation, it would be helpful to have more specific guidance. In particular, HCFA should clarify that unless an individual has symptoms of sufficient acuity and severity as to make evident that there is an emergency medical condition or a potential emergency medical condition, it is reasonable for the department to proceed with its routine for scheduling or seeing department patients.
  In contrast to the emergency department, where the operating assumption is to assume a potential emergency medical condition unless it is ruled out, outpatient departments operate from a different frame of reference. In many instances individuals come to the off-site departments with prearranged appointments. For those who come without appointments, they are often scheduled at a mutually agreeable time. The department should not be expected to approach every patient as if he or she has a potential emergency medical condition.
• Application of 489.20 to outpatient departments on- and off-campus. Section 413.65(g)(1) creates unnecessary confusion by appearing to directly apply 489.20 to outpatient departments. These requirements already apply to the hospital and there is no need to create redundant obligations for departments of the hospital.

"Comes to the emergency department"

The regulation expands the definition of "comes to the emergency department." Hospital property includes the main hospital campus and property within 250 yards.

AHA Comments - The regulation appears to make ownership of property the controlling factor for applying EMTALA without regard to how a site is being used, who is operating it, and how it is being held out to the public. For example, no distinction is made between unoccupied land that is owned by the hospital (e.g., undeveloped or recreation areas), buildings on hospital grounds that are occupied or operated by someone other than the hospital (e.g., doctors office building), and buildings owned by the hospital and not operated for clinical services (e.g., student housing, day care centers). Literally read, hospital property would extend EMTALA obligations to any or all of those sites. The ambiguity creates the potential that even grounds and buildings unrelated to the hospital that separate the main buildings from those within 250 yards could be considered "hospital property". If the intent as stated in the preamble is to ensure that someone who does not make their way to the emergency room is responded to, then the expansion should be limited to clinical facilities operated under the hospital's provider number and areas immediately proximate. This has already been accomplished by extending EMTALA to provider-based facilities on-campus and the sidewalks, driveway and parking lot proximate to the hospital facilities.

Inpatient-only Services

The final rule establishes a class of services that will not be paid for by Medicare in the outpatient setting. HCFA indicates that these services cannot be safely delivered to in an outpatient setting. The AHA in its comments on the proposed rule stated that if a hospital is not paid for a service, the physician should also not be paid. This was so that hospitals and physicians have the same incentives. HCFA did not respond to our comment. The AHA again asks HCFA to extend this policy to physician payment. Moreover, the AHA believes that this policy should also be extended to beneficiaries in Medicare+Choice plans, private Fee-for-Service plans, and at critical access hospitals. If it is unsafe to provide these services in an outpatient setting to fee-for-service beneficiaries, the AHA believes it is equally unsafe and should apply to all beneficiaries. Moreover, implementing this process inconsistently across hospitals and across the insurance status of beneficiaries would be profoundly difficult.

The AHA appreciates the opportunity to submit these comments on the interim final rule. If you have any questions regarding our comments, please contact me or Deborah Williams at (202) 626-2340.

Sincerely,

Rick Pollack
Executive Vice President