Sending Office: Honorable Vicente Gonzalez
Representative Vicente Gonzalez invites you to join him in sending a letter to the Secretary of the Department of Health and Human Services (HHS), Alex Azar, requesting that HHS revise regulations to remove unnecessary and burdensome restrictions placed
on community physician-owned hospitals that qualify as high Medicaid facilities.
High Medicaid facilities are community safety-net hospitals that must demonstrate that they are not the sole hospital in a county, have the highest Medicaid admissions of any hospital in the county for the three most recent years and certify that they do
not discriminate against federal health care beneficiaries.
Our letter asks the agency to bring the regulations back in line with Congressional intent. When Congress enacted restrictions on physician-owned hospitals it created two expansion exceptions for these hospitals: (1) applicable hospital; and (2) high Medicaid
facility. Recognizing the important of safety-net hospitals that serve a disproportionate share of Medicaid beneficiaries, Congress imposed additional restrictions on hospitals qualifying as an “applicable hospital” that it did not impose on those qualifying
as “high Medicaid facilities.” These additional restrictions provide that a hospital can only apply for an expansion exception once every two years, that expansion is limited to 200% growth, and that expansion is limited to the hospital’s main campus.
Through rulemaking, Centers for Medicare & Medicaid Services (CMS) imposed these additional restrictions on both applicable hospitals and high Medicaid facilities despite Congress not having done so. As such, this letter requests that regulations mirror
the statutory text and not apply additional restrictions to high Medicaid Facilities.
We hope to send the letter by next Friday, March 20th. If you have any questions or would like to join, please contact Chandler Smith in Congressman Vicente Gonzalez’s (TX-15) office at: Chandler.Smith@mail.house.gov or
by calling x67996.
The Honorable Alex Azar
Department of Health and Human Services 200 Independence Avenue, SW Washington, DC 20201
Dear Secretary Azar:
We write today to urge the Department of Health and Human Services (“the Department”) to comply with the law and remove the Department’s unlawful additional restrictions placed on physician-owned hospitals (“POH”) qualifying as high Medicaid facilities.
Sections 6001 and 10601 of the Patient Protection and Affordable Care Act (“PPACA”) and section 1106 of the Health Care and Education Reconciliation Act of 2010 (“HCERA”) prohibit a POH from expanding its number of operating rooms, procedure rooms, and beds
unless it qualifies as one of two types of facilities: a high Medicaid facility or an applicable hospital.1 High Medicaid facilities are community safety-net hospitals that must demonstrate that they are not the sole hospital in a county, have the
highest Medicaid admissions of any hospital in the county for the three most recent years and certify that they do not discriminate against federal health care beneficiaries.2
Notably, a POH that qualifies as an applicable hospital is subject to three additional growth constraints,3 whereas no provision of PPACA or HCERA places these additional restrictions on a POH that qualifies as a high Medicaid facility. Despite
the fact that the statutory text treats high Medicaid facilities and applicable hospitals differently, a Department rule treats them the same. That rule, promulgated as part of the CY 2012 Hospital Outpatient Prospective Payment System Final Rule, imposes
on high Medicaid facilities the three statutory restrictions the Congress placed only on applicable hospitals.4
Because this rule conflicts with the statutory text, it is contrary to Congressional intent. The regulation as enacted also hurts Medicaid beneficiaries by limiting the ability of these community safety-net hospitals that serve a disproportionate share of
Medicaid beneficiaries to meet the needs of their communities.
We strongly urge the Department to implement the law as it is written and revise the regulations so as not to impose additional burdens on high Medicaid facilities to the detriment of patients.
1 42 U.S.C. § 1395nn(i)(3)(A), (i)(3)(E), and (i)(3)(F) (2017).
2 Id.at 1395nn(i)(3)(F).
3 Id. at 1395nn(i)(3)(B), (i)(3)(C)(ii-iii), and (i)(3)(D).
4 76 Fed. Reg. 74122, 74524 (Nov. 30, 2011); 42 C.F.R. 411.362(c)(1) (2018) (applying the “Applicable Hospital” once every two-year application restriction to “High Medicaid Facilities”); 42 C.F.R. 411.362(c)(6)(i) (applying the “Applicable Hospital” 200% of
hospital’s baseline restriction to “High Medicaid Facilities)”; and 42 C.F.R. 411.362(c)(6)(ii) (applying the “Applicable Hospital” main campus restriction to “High Medicaid Facilities”).
e-Dear Colleague version 2.0