Provider-Based Requirements
| Citation | 84 FR 64235 |
| Record Number | 2019-24880 |
| Published date | 21 November 2019 |
| Section | Proposed rules |
| Court | Veterans Affairs Department |
Federal Register, Volume 84 Issue 225 (Thursday, November 21, 2019)
[Federal Register Volume 84, Number 225 (Thursday, November 21, 2019)]
[Proposed Rules]
[Pages 64235-64243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24880]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 17
RIN 2900-AQ68
Provider-Based Requirements
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
regulations concerning collection and recovery by VA for medical care
and services provided to an individual at a VA medical facility for
treatment of a nonservice-connected condition. Specifically, this
rulemaking would add a regulation that establishes the requirements VA
will use to determine whether a VA medical facility has provider-based
status. Such determination affects the amount VA can recover from a
third party for the cost of the nonservice-connected care. Currently,
VA uses the requirements established by the Centers for Medicare and
Medicaid Services to determine whether the facility has provider-based
status; however, it is necessary for VA to establish its own
requirements that are tailored to VA's unique operation and structure.
DATES: Comments must be received by VA on or before January 21, 2020.
ADDRESSES: Written comments may be submitted through http://www.Regulations.gov, by mail or hand-delivery to Director, Office of
Regulation Policy and Management (00REG), Department of Veterans
Affairs, 810 Vermont Avenue NW, Room 1064, Washington, DC 20420; or by
fax to (202) 273-9026. (This is not a toll-free number.) Comments
should indicate that they are submitted in response to RIN 2900-AQ68,
Provider-Based Requirements. Copies of comments received will be
available for public inspection in the Office of Regulation Policy and
Management, Room 1064, between the hours of 8:00 a.m. and 4:30 p.m.
Monday through Friday (except holidays). Please call (202) 461-4902 for
an appointment. (This is not a toll-free number.) In addition, during
the comment period, comments may be viewed online through the Federal
Docket Management System (FDMS) at http://www.Regulations.gov.
FOR FURTHER INFORMATION CONTACT: Joseph Duran, Director of Policy and
Planning, Office of Community Care (10D), Ptarmigan at Cherry Creek
Denver, CO, 80209, [email protected] or (303) 372-4629. (This is not
a toll-free number.)
SUPPLEMENTARY INFORMATION: VA is authorized under 38 U.S.C. 1729 to
recover or collect from a third party the reasonable charges for
medical care or services VA furnishes to an individual for a non-
service connected disability, to the extent that the individual, or the
provider of care or services, would be eligible to receive payment from
the third party if the care or services had not been furnished by VA.
VA's collection or recovery under section 1729 is limited to care or
services furnished by VA for a nonservice-connected disability:
Incurred incident to the individual's employment and covered under a
worker's compensation law or plan that provides reimbursement or
indemnification for such care and services; incurred as the result of a
crime of personal violence that occurred in a State, or a political
subdivision of a State, in which a person injured as the result of such
a crime is entitled to receive health care and services at such State's
or subdivision's expense for personal injuries suffered as the result
of such crime; incurred as a result of a motor vehicle accident in a
State that requires automobile accident reparations (no-fault)
insurance; or for which the individual is entitled to care (or the
payment of expenses of care) under a health plan contract.
VA implements its authority under section 1729 through regulations
at title 38 Code of Federal Regulations (CFR) 17.101 through 17.106.
More specifically, the methodology that VA uses to determine the amount
of its collection or recovery for is established in 38 CFR 17.101. This
rulemaking would primarily seek to revise this methodology with regards
to calculating the reasonable charges for care and services VA provides
on an outpatient basis. Prior to explaining the proposed regulatory
changes for Sec. 17.101, we provide the following background on how VA
developed its current methodology for charges for outpatient
[[Page 64236]]
services. Historically, if VA had a specific item of medical care or
service provided on an outpatient basis, VA could charge a professional
charge, an outpatient facility charge, or both. These charges were
developed so as to be mutually exclusive, with the expectation that
both charges could be billed for the same occasion of service.
In April 2000, the Centers for Medicare and Medicaid Services (CMS)
published a final rule with comment period that, in pertinent part,
codified its long-standing use of provider-based status in regulation
at 42 CFR 413.65. 65 FR 18434 (April 7, 2000). In this final rule, CMS
explained that, since the Medicare program started, some providers,
referred to as main providers, had functioned as a single entity while
owning and operating additional departments, locations, and facilities.
These departments, locations, and facilities were referred to as
provider-based and were treated as part of the main provider for
Medicare purposes. In this regard, to the extent that overhead costs of
the main provider, such as administrative and general costs, were
shared by the provider-based facility, these costs were allowed to flow
to the provider-based facility through the cost allocation process in
the cost report. This was considered appropriate because these
facilities were also operationally integrated, and the provider-based
facility was sharing the overhead costs and revenue producing services
controlled by the main provider. In the April 2000 final rulemaking,
CMS defined the term provider-based status as the relationship between
a main provider and a provider-based entity or a department of a
provider, remote location of a hospital, or satellite facility, that
complies with the provisions of this section. 42 CFR 413.65(a)(2). It
also established specific requirements that must be met in order for
CMS to recognize a facility as having provider-based status. CMS
explained that specific criteria were necessary because the designation
of provider-based status could result in additional Medicare payments
for services furnished at the provider-based facility (outpatient
facility charges), and could also increase the coinsurance liability of
Medicare beneficiaries for those services. The final rule clarified
that 42 CFR 413.65 applied to providers and facilities seeking Medicare
payment. As VA does not seek Medicare payment, the requirements and
criteria established in 42 CFR 413.65 applies to VA only if VA so
establishes through its own regulations.
In December 2003, VA amended 38 CFR 17.101 to establish that VA
would use the CMS provider-based criteria in 42 CFR 413.65 to more
closely approximate industry standard charge structures and billing
practices. 68 FR 70714 (December 19, 2003). That VA rulemaking further
established two sets of charges for outpatient care consistent with
Medicare: One for use by facilities that had provider-based status and
one for facilities that did not have provider-based status. The
facilities that had provider-based status could bill both an outpatient
professional and facility charge. The facilities that did not have
provider-based status could only bill a professional charge. In
consideration of the fact that facilities that did not have provider-
based status could only bill a professional charge, the professional
charge for those facilities would be higher than the professional
charge for facilities that had provider-based status, based on
Medicare's higher non-facility practice expense relative value units
(RVUs).
Currently, VA defines the terms provider-based and non-provider-
based in 38 CFR 17.101(a)(5). Section 17.101(a)(5) defines provider-
based as the outpatient department of a VA hospital or any other VA
health care entity that meets CMS provider-based criteria. Provider-
based entities are entitled to bill outpatient facility charges. Under
Sec. 17.101(a)(5), non-provider-based is defined as a VA health care
entity (such as a small VA community-based outpatient clinic) that
functions as the equivalent of a doctor's office or for other reasons
does not meet CMS provider-based criteria, and, therefore, is not
entitled to bill outpatient facility charges. VA establishes the use of
the CMS provider-based criteria in its third-party billing through
Sec. 17.101(a)(6), which states in pertinent part that each VA health
care entity are designated as either provider-based or non-provider
based provider-based entities are entitled to bill outpatient facility
charges; non-provider-based entities are not.
For the reasons below, VA proposes to revise 38 CFR 17.101 to
remove the current regulatory requirement that VA use the CMS provider-
based criteria with regards to VA billing of third parties, and
proposes to add a new regulation at 38 CFR 17.100 that would establish
the criteria that VA would use instead to determine whether a VA
facility has provider-based status. In so doing, VA would model new
proposed 38 CFR 17.100 on a majority of the current CMS provider-based
criteria in 42 CFR 413.65, but VA's revisions would address the unique
structure of VA's health care system, versus the CMS requirements that
are more generally applicable to private health care systems.
Significantly, VA is an integrated, national health care system and,
therefore, some of the CMS requirements in 42 CFR 413.65, especially as
they pertain to proximity limitations and licensure, are not
appropriate to use for VA facilities. Those CMS requirements that are
not appropriate to use for VA facilities are further identified and
explained in more detail in the discussions below.
Additionally, to provide a scope for the proposed changes further
explained below, we note that as of June 2018, 93 percent out of the
total number of VA's facilities from which recoverable costs for care
or services are provided (VA's billable facilities) already meet the
current CMS provider-based criteria under 42 CFR 413.65(d) and (e) to
permit VA to bill both an outpatient professional charge and an
outpatient facility charge. Therefore, the proposed changes explained
below would only have a potential effect in practical billing practices
(to allow for the billing of an outpatient facility charge, in addition
to the current billing of an outpatient professional charge) for seven
percent of VA's billable facilities. More detail is provided in the
section of this rulemaking that discusses the Regulatory Flexibility
Act.
Sec. 17.100 Requirements for Provider-Based Status
We propose to add a new regulation at 38 CFR 17.100. Section 17.100
would be located under the undesignated center heading Charges,
Waivers, and Collections and would be titled Requirements for provider-
based status.
In proposed Sec. 17.100(a), we would describe a clear scope for
establishing this section, which is to provide the criteria we would
use to determine whether a VA medical facility has provider-based
status for purposes of billing for nonservice-connected and non-special
treatment authority conditions. We would also explain that while these
requirements are modeled after the requirements established in the CMS
regulation, 42 CFR 413.65, there are some differences that are designed
to address the unique operational activities of the VA health care
system.
Proposed Sec. 17.100(b) would contain the definitions that would
apply to this section. While some of these terms are based on those
definitions in the CMS regulation, most are defined in the context of
VA's unique structure and organization as indicated within the
discussions of each proposed definition below. This ensures that we use
the definitions and terminology that are
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most appropriate and applicable to VA's health care system.
Community Based Outpatient Clinic (CBOC) would be defined as a VA-
operated, VA-funded, or VA-reimbursed site of care that is not located
within a VA Medical Center. We would further explain that a CBOC can
provide primary, specialty, subspecialty, mental health, or any
combination of health care delivery services that can be appropriately
provided in an outpatient setting. A CBOC is unique to VA, and would be
consistent with other VA definitions or uses of the term.
Community Living Center (CLC) would be defined as a component of
the spectrum of long-term care that provides a skilled nursing
environment and houses a variety of specialty programs, such as respite
care, dementia care, and skilled nursing care, for persons needing
short and long stay services. We would further explain that CLCs are
typically located on or near a VA medical facility and are VA-owned and
operated, but may be free-standing in the community. This definition of
CLC would be consistent with other VA definitions or uses of the term.
Facility would be defined as a point of care where individuals can
seek health care services, to include a VA Medical Center, CBOC, Health
Care Center, CLC, and Other Outpatient Services site. This definition
would specifically reference the facilities within VA that currently
provide health care services.
Health Care Center (HCC) would be defined as a VA-owned, VA-leased,
VA-contracted, or shared clinic that is operational at least five days
per week and provides primary care, mental health care, on site
specialty services, and performs ambulatory surgery and/or invasive
procedures that may require moderate sedation or general anesthesia.
This definition would be consistent with other VA definitions or uses
of the term, and is defined to reflect VA's organization and structure.
Main Provider (or parent facility/hospital or PBH) would be defined
as a provider that either creates, or acquires ownership of, another
facility to deliver additional health care services under its name,
ownership, and financial and administrative control. This is consistent
with the CMS definition of main provider in 42 CFR 413.65(a)(2). We
note that VA generally refers to its main providers as provider-based
hospitals (PBHs). Although these facilities operate as main providers
operate in the private sector and are not subordinate facilities that
would seek provider-based status, VA has historically referred to them
as PBHs. For clarity, we will refer to these facilities as main
providers in the preamble and regulation text. We would further explain
that VAMCs and HCCs can be main providers. This definition would
reflect VA's organization and structure, and reference those facilities
within VA that are examples of main providers.
Other Outpatient Services (OOS) would be defined as a site that
provides outpatient services to veterans, but does not meet the
definition of a CBOC or HCC. This definition would be consistent with
other VA definitions or uses of the term, as well as VA's structure and
organization. Examples of OOS can include sleep centers, post-traumatic
stress disorder clinics, and a clinic without primary care or mental
health services.
Prospective Payment System (PPS) would be defined as a method of
reimbursement in which Medicare payment is made based on a
predetermined, fixed amount. The payment amount for a particular
service is derived based on the classification system of that service
(for example, Medicare Severity Diagnosis-Related Groups for inpatient
hospital services furnished by most acute care hospitals). This
definition would be consistent with the definition used by CMS.
Provider-Based Outpatient Facility (PBO) would be defined as a
provider of health care services that is either created by, or acquired
by, a main provider for the purpose of furnishing additional health
care services under the ownership, administrative, and financial
control of the main provider and meets the criteria outlined in this
section. CMS does not define the general term of provider-based
outpatient facility and instead, CMS separately defines the types of
facilities or entities that could obtain provider-based status, to
include department of a provider, provider-based entity, and remote
location of a hospital. However, for the purposes of VA, it is not
necessary to distinguish between the different types of facilities, and
therefore, VA will have one term to broadly encompass all provider-
based outpatient facilities.
Remote Location of a Hospital would be a CBOC, OOS site, or HCC
that is located offsite from the main facility. This definition would
differ from the definition provided in 42 CFR 413.65 in order to
specifically define this term within the context of VA's facilities and
reflect VA's unique organization and structure.
VA Medical Center (VAMC) would be defined as a VA facility that
provides at least two categories of care (inpatient, outpatient,
residential, or institutional extended care). This definition would be
consistent with other VA definitions or uses of the term, as well as
VA's structure and organization.
In proposed Sec. 17.100(c), we would set forth the criteria that
would be used to determine whether a facility has provider-based status
for purposes of billing for nonservice-connected and non-special
treatment authority conditions. Section 17.100(c) is largely modeled
after the requirements for all facilities or organizations in 42 CFR
413.65(d), additional requirements applicable to off-campus facilities
or organizations in 42 CFR 413.65(e), and obligations of hospital
outpatient departments and hospital-based entities in 42 CFR 413.65(g).
In proposed Sec. 17.100(c)(1), we would require that the facility
seeking provider-based status and the main provider operate under the
same license. This requirement would be consistent with the CMS
provider-based criteria located at 42 CFR 413.65(d)(1), which generally
requires a department of a provider, the remote location of a hospital,
or the satellite facility and the main provider operate under the same
license. As previously explained, VA is not distinguishing between
departments of providers, remote locations of a hospital, satellite
facilities, and other provider-based facilities. Therefore, proposed
paragraph (c)(1) would state that the facility seeking provider-based
status and the main provider operate under the same license. Because VA
is a Federal entity, VA facilities are not licensed, and are not
required to be licensed, under any State laws or other State
authorities. Therefore, we would also explain that VA facilities are
not licensed by States but are considered licensed by VA for the
purpose of collection and recovery as part of VA's national
organization structure and in accordance with VA standards, including
those recognized by VA's Office of the Medical Inspector and Inspector
General, as well as standards of major healthcare accreditation
organizations such as The Joint Commission as applicable to specific VA
facilities.
In proposed Sec. 17.100(c)(2), we would require that the clinical
services of the facility seeking provider-based status and the main
provider be integrated. We would further explain that integration is
demonstrated by several factors, which would be listed in the
regulation. These factors would include (1) the professional staff at
the facility seeking provider-based status has clinical privileges at
the main provider; (2) the main provider maintains the same
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monitoring and oversight (i.e. credentialing and privileging) of the
facility seeking provider-based status as it does for any other
department of the provider; (3) the medical director of the facility
seeking provider-based status maintains a reporting relationship with
the chief medical officer or other similar official of the main
provider that has the same frequency, intensity, and level of
accountability that exists in the relationship between the medical
director of a department of the main provider and the chief medical
officer or other similar official of the main provider, and is under
the same type of supervision and accountability as any other director,
medical or otherwise, of the main provider; (4) the medical staff
committees or other professional committees at the main provider are
responsible for medical activities in the facility seeking provider-
based status, including quality assurance, utilization review, and the
coordination and integration of services, to the extent practicable,
between the facility seeking provider-based status and the main
provider; (5) the medical records for patients treated in the facility
are integrated into a unified retrieval system (or cross reference) of
the main provider; (6) inpatient and outpatient services of the
facility seeking provider-based status and the main provider are
integrated, and patients treated at the facility who require further
care have full access to all services of the main provider and are
referred where appropriate to the corresponding inpatient or outpatient
department or service of the main provider; and (7) inpatient and
outpatient services of the facility seeking provider-based status and
the main provider are recognized under the main provider's
accreditation. The first six factors would be consistent with the CMS
criteria located at 42 CFR 413.65(d)(2). However, the seventh factor,
regarding accreditation, would be additional factor that demonstrates
integration for VA facilities. This would reflect the unique structure
and organization of VA, in which inpatient and outpatient services of
VA facilities are recognized under the main provider's accreditation.
In proposed Sec. 17.100(c)(3), we would propose to require
financial integration of the facility seeking provider-based status and
the main provider. Specifically, we would require that the financial
operations of the facility seeking provider-based status are fully
integrated within the financial system of the main provider, as
evidenced by shared income and expenses between the main provider and
the facility. We would also require that the costs of a facility that
is a hospital department be reported in a cost center of the provider,
costs of a provider-based facility other than a hospital department be
reported in the appropriate cost center or cost centers of the main
provider. This would be consistent with CMS requirements in 42 CFR
413.65(d)(3). However, we would also require that the main provider's
integrated health care system manpower and labor budget and the
financial status of any provider-based facility be incorporated and
readily identified in the main provider's integrated system reports.
This additional requirement would reflect that the main provider has
administrative and financial control of the provider-based facility,
and would be consistent with similar CMS requirements in 42 CFR
413.65(d)(3). This would reflect VA's current structure and
organization in which a main provider has such control, particularly
budgetary, over facilities.
Under proposed Sec. 17.100(c)(4), we would include a requirement
for public awareness. Specifically, we would require that the facility
seeking provider-based status be held out to the public (and other
payers) as part of the main provider. This would be exhibited by the
patients of the facility being made aware that the facility is part of
a main provider and that they will be billed accordingly. This would be
consistent with the CMS requirement for public awareness in 42 CFR
413.65(d)(4). In addition, we would also propose that all literature,
brochures, and public relations newsletters from the facility seeking
provider-based status include the relationship between the main
provider and the facility. This is current VA practice for facilities
associated or affiliated with a main provider and reflects the
relationship between the facilities.
Proposed Sec. 17.100(c)(5) would contain obligations when the
facility seeking provider-based status is a hospital outpatient
department or hospital-based entity, including (1) compliance with the
``antidumping'' rules of 42 CFR 489.20(l), (m), (q), and (r) and 42 CFR
489.24; (2) physician services must be billed with the correct site-of-
service so that appropriate physician and practitioner amounts can be
determined; (3) physicians are obligated to comply with the non-
discrimination provisions in 42 CFR 489.10; (4) the facility seeking
provider-based status must treat all Medicare patients seen on an
urgent/emergent basis as hospital outpatients; (5) in the case of a
patient admitted to the hospital as an inpatient after receiving
treatment in the hospital outpatient department or hospital-based
facility, payments for services in the hospital outpatient department
of hospital-based facility are subject to the payment window provisions
applicable to PPS hospitals and to hospitals and units excluded from
PPS set forth at 42 CFR 412.2(c)(5) and at 42 CFR 413.40(c)(2),
respectively; (6) the hospital outpatient department must meet
applicable VA policy pertaining to hospital health and safety programs;
and (7) VA must treat any facility that is located on the main hospital
campus as a department of the hospital. The criteria described in (1)-
(7) are largely consistent with CMS regulations at Sec. 413.65(d)(5)
and (g).
We note that we would not propose to include all of the criteria
located at Sec. 413.65(g), Obligations of hospital outpatient
departments and hospital-based entities, because some of the
requirements are not applicable to VA. For example, Sec. 413.65(g)(3)
(hospital outpatient departments must comply with all the terms of the
hospital's provider agreement) and Sec. 413.65(g)(7) (when a Medicare
beneficiary is treated in a hospital outpatient department that is not
located on the main provider's campus, the treatment is not required to
be provided by the ``antidumping'' rules in Sec. 489.24 of this
chapter, and the beneficiary will incur a coinsurance liability for an
outpatient visit to the hospital as well as for the physician service,
certain requirements must be met) are not included because they are not
applicable.
In proposed Sec. 17.100(c)(6), we would include the requirement
that the facility seeking provider-based status is operated under the
control of the main provider. Such control would require (1) the main
provider and the facility seeking provider-based status have the same
governing body; (2) the facility seeking provider-based status is
operated under the same organizational documents as the main provider
(e.g. the facility is subject to common bylaws and operating decisions
of the main provider's governing body); (3) the main provider has final
responsibility for administrative decisions, final approval for
contracts with outside parties, final approval for personnel actions,
final responsibility for personnel policies (such as code of conduct),
and final approval for medical staff appointments in the facility
seeking provider-based status. This is modeled after the criteria in
Sec. 413.65(e)(1) which requires operation under the ownership and
control of the main provider as an additional requirement applicable to
off-campus facilities or organizations. However, we propose to remove
the
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ownership requirements because, in the VA structure, main providers do
not own other facilities.
Proposed Sec. 17.100(c)(7) would establish the requirement for
administration and supervision of the facility seeking provider-based
status. Significantly, the reporting relationship between the facility
seeking provider-based status and the main provider must have the same
frequency, intensity, and level of accountability that exists in the
relationship between the main provider and one of its existing
departments, as evidenced by compliance with further identified
requirements. These include (1) the facility seeking provider-based
status must be under the direct supervision of the main provider, (2)
the facility seeking provider-based status must be operated under the
same monitoring and oversight by the main provider as any other
department of the provider and is operated just as any other department
of the provider with regard to supervision and accountability; and (3)
administrative functions (i.e. billing services, records, human
resources, payroll, employee benefit package, salary structure, and
purchasing services) of the facility seeking provider-based status are
integrated with those of the main provider.
We would further explain that as part of the requirement for the
same monitoring and oversight located in proposed Sec.
17.100(c)(7)(ii), the facility director or individual responsibility
for daily operations at the facility must maintain a reporting
relationship with a manager at the main provider that has the same
frequency, intensity and level of accountability that exists in the
relationship between the main provider and its existing departments,
and is accountable to the governing body of the main provider, in the
same manner as any department head of the provider. In addition, we
would explain that the requirement of integrated administrative
functions, as set forth in proposed Sec. 17.100(c)(7)(iii), includes
that either the same employees or group of employees handle the
identified administrative functions for the facility and main provider,
or those functions are contracted out under the same contract
agreement; or are handled under different contract agreements, with the
contract of the facility or organization being managed by the main
provider. The criteria under proposed Sec. 17.100(c)(7) are consistent
with those under the CMS regulations at 42 CFR 413.65(e)(2).
Lastly, under proposed Sec. 17.100(d), we would illustrate how the
criteria are applied when VA does not own the facility, but operates
under a contract, and in the situation when the employees at a VA
facility are contract employees. We would explain that, (1) a VA
facility that is seeking provider-based status that exists under
contract arrangements, where only VA patients are seen, may be
designated as provider-based as long as the provider-based requirements
in this section are met; (2) A VA facility seeking provider-based
status that exists under contract arrangements, where VA patients and
non-VA patients are seen at the same non-VA owned facility, will have
the same provider-based status as the non-VA owned facility that is
hosting the VA facility; and (3) a VA owned and operated facility
seeking provider-based status, where some or all of the staff are
contracted employees, may be designated as provider-based as long as
the provider-based requirements in this section are met. This is
because the facility is still considered VA owned and operated,
regardless of whether the staff is contracted or not.
The CMS requirements include numerous other provisions that are
applicable to private health care systems, but are not applicable to
the VA health care system. For example, in the proposed rulemaking we
are not including the information in 42 CFR 413.65(b) or (c) on what is
required to seek a determination of provider-based status from CMS and
what is required for reporting material changes in relationships to
CMS, because VA and not CMS will make the determination of whether a VA
facility has provider-based status.
In addition, this proposed rulemaking does not include the CMS
criteria at 42 CFR 413.65(e)(3) regarding location requirements. These
include, generally, that the facility is located within a 35 mile
radius of the campus of the potential main provider or that the
facility is owned and operated by a hospital that has a
disproportionate share adjustment greater than 11.75 percent and that
the facility demonstrates a high level of integration with the main
provider by showing that it serves the same patient population as the
main provider. Although in the private sector, mileage between the main
provider and the facility seeking provider-based status demonstrates a
level of integration, we believe that the same is not true for VA.
VA is a nationwide health care system that is structured to require
all facilities that are not main providers be controlled by and
financially and administratively integrated with the main provider in
its region, regardless of mileage. In this regard, each designated
region has one main provider and when VA acquires or creates a new
facility (that is not a main provider), the new facility is
automatically paired with the main provider that is in its region. The
new facility is assigned a shared station number with the main provider
that has a unique suffix and is under the main provider's control. We
emphasize that the pairing is only based on location to the extent that
the new facility is within the main provider's region; it does not
depend upon a certain mileage requirement. For example, in the State of
Maine, there is one main provider and all other facilities, regardless
of distance from the main provider, are administratively and
financially integrated with and controlled by the main provider. It
does not matter whether the facility is 20 miles away or 200 miles
away. Therefore, VA believes that the location requirement is not a
relevant criterion to determine integration within the VA system.
Moreover, the proposed rulemaking does not include the requirements
for joint ventures under 42 CFR 413.65(f), management contracts under
42 CFR 413.65(h), inappropriate treatment of a facility or organization
as provider-based under 42 CFR 413.65(j), temporary treatment as
provider-based under 42 CFR 413.65(k), correction of errors under 42
CFR 413.65(l), the status of Indian Health Service and Tribal
facilities and organizations under 42 CFR 413.65(m), FQHCs and look
alikes under 42 CFR 413.65(n), and effective date of provider-based
status under 42 CFR 413.65(o). VA believes that these provisions are
not pertinent to VA's structure as a national health care system for
veterans, and therefore, we will not include these or similarly not
relevant provisions into the proposed rulemaking.
Sec. 17.101 Collection or Recovery by VA for Medical Care or Services
Provided or Furnished to a Veteran for a Nonservice-Connected
Disability
We propose to revise Sec. 17.101(a)(5) by removing the definitions
of provider-based and non-provider-based. The term provider-based
outpatient facility will be defined in Sec. 17.100(b)(2). Therefore,
we do not believe that it needs to be defined in Sec. 17.101. We also
propose to remove the definition of non-provider-based. CMS does not
define that term in Sec. 413.65 and we do not believe it is necessary
to define. If a facility does not meet the criteria in Sec. 17.100,
the facility will simply not have provider-based status.
We propose to amend Sec. 17.101(a) by first stating that the
paragraph will cover charges related to provider-based
[[Page 64240]]
status. We would explain that facilities that have provider-based
status by meet the criteria in Sec. 17.100 would be entitled to bill
outpatient facility charges and professional charges. The professional
charges for these facilities would be produced by the methodologies set
forth in this section based on facility expense RVUs. Facilities that
do not have provider-based status because it did not meet the criteria
in Sec. 17.100 would not be permitted to bill outpatient facility
charges and could only bill a professional charge. The professional
charges for these facilities would be produced by the methodologies set
forth in this section based on non-facility practice expense RVUs.
Sec. 17.106 VA Collection Rules; Third-Party Payers
As previously discussed, under 38 U.S.C. 1729, VA has the right to
recover or collect reasonable charges for medical care or services from
a third party under four circumstances. In addition, section 1729(f)
provides that no law of any State or of any political subdivision of a
State, and no provision of any contract or other agreement, shall
operate to prevent recovery or collection by the United States under
this section or with respect to care or services furnished under
section 1784 of this title. VA has established rules for third party
payers in 38 CFR 17.106. Specifically, Sec. 17.106(f) contains the
general rules for the administration of section 1729 and this part,
with clarifying examples of when a third-party may not reduce, offset,
or request a refund for payments made to VA. Section 17.106(f)(2)
explicitly provides that the list of examples is not exclusive. We
propose to add another example to 38 CFR 17.106(f)(2) to clarify that
third parties cannot reduce or refuse payment based on VA's designation
that a facility is provider-based.
Effect of Rulemaking
The Code of Federal Regulations, as proposed to be revised by this
proposed rulemaking, would represent the exclusive legal authority on
this subject. No contrary rules or procedures would be authorized. All
VA guidance would be read to conform with this proposed rulemaking if
possible or, if not possible, such guidance would be superseded by this
rulemaking.
Paperwork Reduction Act
This rule contains no collections of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).
Regulatory Flexibility Act
The Secretary hereby certifies that this proposed rule would not
have a significant economic impact on a substantial number of small
facilities as they are defined in the Regulatory Flexibility Act, 5
U.S.C. 601-612. Over 90 per cent of VA's current billing facilities
presently engage in the practices that would be enabled by this rule
for a remaining small percentage of VA facilities. Additionally, while
the rule would allow for recognition of an additional set of billable
charges for the small percentage of VA facilities that to not already
engage in such practices, the rule would not guarantee such charges
would be paid by third parties or collected by VA. The estimated
average annual potential impact of less than $4 million would otherwise
not be significant when considered to apply to the aggregate of typical
third-party insurers or payers in the U.S. health care industry at
large. Therefore, pursuant to 5 U.S.C. 605(b), this rule is exempt from
the initial and final regulatory flexibility analysis requirements of 5
U.S.C. 603 and 604.
Executive Orders 12866, 13563, and 13771
Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, and other advantages; distributive impacts;
and equity). Executive Order 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Office of Management and Budget has examined the economic,
interagency, budgetary, legal, and policy implications of this
regulatory action and determined that it is a significant regulatory
action under Executive Order 12866, because it raises novel legal or
policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in this Executive Order. VA's
impact analysis can be found as a supporting document at http://
www.regulations.gov, usually within 48 hours after the rulemaking
document is published. Additionally, a copy of the rulemaking and its
impact analysis are available on VA's website at http://www.va.gov/orpm
by following the link for VA Regulations Published from FY 2004 through
FYTD.
This proposed rule is not subject to the requirements of E.O. 13771
because this proposed rule results in no more than de minimis costs.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. This proposed rule is not likely to have
such effect on State, local, and tribal governments, or on the private
sector.
Catalog of Federal Domestic Assistance Numbers
The Catalog of Federal Domestic Assistance numbers and titles for
the programs affected by this document are 64.008--Veterans Domiciliary
Care; 64.011--Veterans Dental Care; 64.012--Veterans Prescription
Service; 64.013--Veterans Prosthetic Appliances; 64.014--Veterans State
Domiciliary Care; 64.015--Veterans State Nursing Home Care; 64.026--
Veterans State Adult Day Health Care; 64.039--CHAMPVA; 64.040--VHA
Inpatient Medicine; 64.041--VHA Outpatient Specialty Care; 64.042--VHA
Inpatient Surgery; 64.043--VHA Mental Health Residential; 64.044--VHA
Home Care; 64.045--VHA Outpatient Ancillary Services; 64.046--VHA
Inpatient Psychiatry; 64.047--VHA Primary Care; 64.048--VHA Mental
Health clinics; 64.049--VHA Community Living Center; 64.050--VHA
Diagnostic Care.
List of Subjects in 38 CFR Part 17
Administrative practice and procedure, Alcohol abuse, Alcoholism,
Claims, Day care, Dental health, Drug abuse, Health care, Health
facilities, Health professions, Health records, Medical devices,
Medical research, Mental health programs, Nursing homes, Philippines,
Veterans.
Signing Authority
The Secretary of Veterans Affairs, or designee, approved this
document and authorized the undersigned to sign and submit the document
to the Office of the Federal Register for publication electronically as
an official document of the Department of Veterans Affairs. Robert L.
Wilkie, Secretary, Department of Veterans Affairs, approved this
[[Page 64241]]
document on May 3, 2019, for publication.
Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy &
Management, Office of the Secretary, Department of Veterans Affairs.
For the reasons set out in the preamble, VA proposes to amend 38
CFR part 17 as set forth below:
PART 17--MEDICAL
0
1. The authority citation for part 17 continues to read in part as
follows:
Authority: 38 U.S.C. 501, and as noted in specific sections.
* * * * *
0
2. Add Sec. 17.100 under the undesignated center heading ``Charges,
Waivers, and Collections'' to read as follows:
Sec. 17.100 Requirements for provider-based status.
(a) Scope. This section establishes the criteria that VA uses to
determine whether a VA medical facility is designated as provider-based
for purposes of billing for non-service-connected and non-special
treatment authority conditions.
(b) Definitions. For purposes of this section:
Community Based Outpatient Clinic (CBOC). A CBOC is a VA-operated,
VA-funded, or VA-reimbursed site of care that is not located within a
VA Medical Center. A CBOC can provide primary, specialty, subspecialty,
mental health, or any combination of health care delivery services that
can be appropriately provided in an outpatient setting.
Community Living Center (CLC). A CLC is a component of the spectrum
of long-term care that provides a skilled nursing environment and
houses a variety of specialty programs for persons needing short and
long stay services. VA CLCs are typically located on, or near a VA
medical facility and are VA-owned and operated, but may be free-
standing in the community.
Facility. A facility is a point of care where individuals can seek
VA health care services, to include a VA Medical Center, CBOC, Health
Care Center, CLC, and Other Outpatient Services site.
Health Care Center (HCC). An HCC is a VA-owned, VA-leased, VA-
contracted or shared clinic that is operational at least five days per
week and provides primary care, mental health care, on site specialty
services, and performs ambulatory surgery and/or invasive procedures
that may require moderate sedation or general anesthesia.
Main provider. A main provider (or parent facility/hospital or
provider-based hospital (PBH)) is a provider that either creates, or
acquires ownership of, another facility to deliver additional health
care services under its name, ownership, and financial and
administrative control. For example, VA Medical Centers and HCCs can be
main providers.
Other Outpatient Services (OOS). A site that provides outpatient
services to veterans, but does not meet the definition of a CBOC or HCC
per this section.
Prospective Payment System (PPS). A Prospective Payment System
(PPS) is a method of reimbursement in which Medicare payment is made
based on a predetermined, fixed amount. The payment amount for a
particular service is derived based on the classification system of
that service (for example, Medicare Severity Diagnosis-Related Groups
for inpatient hospital services furnished by most acute care
hospitals).
Provider-based outpatient facility (PBO). A provider-based
outpatient facility is a provider of health care services that is
either created by, or acquired by, a main provider for the purpose of
furnishing additional health care services under the ownership,
administrative, and financial control of the main provider, and meets
the criteria outlined in this section.
Remote location of a hospital. A remote location of a hospital is a
CBOC, OOS Site, or HCC that is located offsite from the main facility.
VA Medical Center (VAMC). A VAMC is a VA facility that provides at
least two categories of care (inpatient, outpatient, residential, or
institutional extended care).
(c) Criteria for provider-based status. In order to be designated
as a provider-based facility, the following criteria must be met:
(1) Licensure. The facility seeking provider-based status and the
main provider must operate under the same license. VA facilities are
not licensed by States but all VA facilities are considered licensed
for the purpose of collection and recovery by VA as part of VA's
national organization structure and in accordance with VA standards,
including standards established or recognized by VA's Offices of the
Medical Inspector and Inspector General and major healthcare
accreditation organizations.
(2) Clinical services. The clinical services of the facility
seeking provider-based status and the main provider must be integrated.
Integration is demonstrated by the following:
(i) The professional staff of the facility has clinical privileges
at the main provider.
(ii) The main provider maintains the same monitoring and oversight
(i.e. credentialing and privileging) of the facility seeking provider-
based status as it does for any other department of the provider.
(iii) The medical director of the facility seeking provider-based
status maintains a reporting relationship with the chief medical
officer or other similar official of the main provider that has the
same frequency, intensity, and level of accountability that exists in
the relationship between the medical director of a department of the
main provider and the chief medical officer or other similar official
of the main provider, and is under the same type of supervision and
accountability as any other director, medical or otherwise, of the main
provider.
(iv) The medical staff committees or other professional committees
at the main provider are responsible for medical activities in the
facility seeking provider-based status, including quality assurance,
utilization review, and the coordination and integration of services,
to the extent practicable, between the facility seeking provider-based
status and the main provider.
(v) Medical records for patients treated in the facility seeking
provider-based status are integrated into a unified retrieval system
(or cross reference) of the main provider.
(vi) Inpatient and outpatient services of the facility seeking
provider-based status and the main provider are integrated, and
patients treated at the facility who require further care have full
access to all services of the main provider and are referred where
appropriate to the corresponding inpatient or outpatient department or
service of the main provider.
(vii) Inpatient and outpatient services of the facility seeking
provider-based status and the main provider are recognized under the
main provider's accreditation.
(3) Financial integration. The financial operations of the facility
seeking provider-based status are fully integrated within the financial
system of the main provider, as evidenced by shared income and expenses
between the main provider and the facility. The costs of a facility
that is a hospital department are reported in a cost center of the
provider, costs of a facility other than a hospital department are
reported in the appropriate cost center or cost centers of the main
provider. The main provider's integrated health care system manpower
and labor budget and the
[[Page 64242]]
financial status of any facility seeking provider-based status is
incorporated and readily identified in the main provider's integrated
system reports.
(4) Public awareness. The facility seeking provider-based status
must be held out to the public (and other payers) as part of the main
provider. Patients of the facility must be made aware that the facility
is part of a main provider and that they will be billed accordingly.
All literature, brochures, and public relations newsletters from the
facility seeking provider-based status must provide the relationship
between the main provider and the facility.
(5) Obligations of hospital outpatient departments and hospital-
based facilities. If the facility seeking provider-based status is a
hospital outpatient department or hospital-based facility, the facility
must fulfill the obligations described in this paragraph:
(i) The hospital outpatient department must comply with the
antidumping rules of 42 CFR 489.20(l), (m), (q), and (r) and Sec.
489.24.
(ii) Physician services furnished in hospital outpatient
departments or hospital-based facilities must be billed with the
correct site-of-service so that appropriate physician and practitioner
payment amounts can be determined based on their geographical location.
(iii) Physicians who work in hospital outpatient departments or
hospital-based facilities are obligated to comply with the non-
discrimination provisions in 42 CFR 489.10(b).
(iv) Hospital outpatient departments must treat all Medicare
patients seen on an urgent/emergent basis as hospital outpatients.
(v) In the case of a patient admitted to the hospital as an
inpatient after receiving treatment in the hospital outpatient
department or hospital-based facility, payments for services in the
hospital outpatient department or hospital-based facility are subject
to the payment window provisions applicable to PPS hospitals and to
hospitals and units excluded from PPS set forth at 42 CFR 412.2(c)(5)
and at 42 CFR 413.40(c)(2), respectively.
(vi) The hospital outpatient department must meet applicable VA
policies pertaining to hospital health and safety programs.
(vii) VA must treat any facility that is located on the main
hospital campus as a department of the hospital.
(6) Operation under the control of the main provider. The facility
seeking provider-based status is operated under the control of the main
provider. Control of the main provider requires:
(i) The main provider and the facility seeking provider-based
status have the same governing body.
(ii) The facility seeking provider-based status is operated under
the same organizational documents as the main provider. For example,
the facility seeking provider-based status must be subject to common
bylaws and operating decisions of the governing body of the main
provider.
(iii) The main provider has final responsibility for administrative
decisions, final approval for contracts with outside parties, final
approval for personnel actions, final responsibility for personnel
policies (such as code of conduct), and final approval for medical
staff appointments in the facility seeking provider-based status.
(7) Administration and Supervision. The reporting relationship
between the facility seeking provider-based status and the main
provider must have the same frequency, intensity, and level of
accountability that exists in the relationship between the main
provider and one of its existing departments, as evidenced by
compliance with all of the following requirements:
(i) The facility seeking provider-based status is under the direct
supervision of the main provider.
(ii) The facility seeking provider-based status is operated under
the same monitoring and oversight by the main provider as any other
department of the provider, and is operated just as any other
department of the provider with regard to supervision and
accountability. The facility director or individual responsible for
daily operations at the facility:
(A) Maintains a reporting relationship with a manager at the main
provider that has the same frequency, intensity, and level of
accountability that exists in the relationship between the main
provider and its existing departments; and
(B) Is accountable to the governing body of the main provider, in
the same manner as any department head of the provider.
(iii) The following administrative functions of the facility
seeking provider-based status are integrated with those of the main
provider where the facility is based: billing services, records, human
resources, payroll, employee benefit package, salary structure, and
purchasing services. Either the same employees or group of employees
handle these administrative functions for the facility and the main
provider, or the administrative functions for both the facility and the
main provider are contracted out under the same contract agreement; or
are handled under different contract agreements, with the contract of
the facility or organization being managed by the main provider.
(d) Illustrations of how the criteria are applied. (1) A VA
facility that is seeking provider-based status that exists under
contract arrangements, where only VA patients are seen, may be
designated as provider-based if the provider-based requirements in this
section are met.
(2) A VA facility seeking provider-based status that exists under
contract arrangements, where VA patients and non-VA patients are seen
at the same non-VA owned facility, will have the same provider-based
status as the non-VA owned facility that is hosting the VA facility.
(3) A VA owned and operated facility seeking provider-based status,
where some or all of the staff are contracted employees, may be
designated as provider-based if the provider-based requirements in this
section are met.
0
2. Amend Sec. 17.101 by:
0
a. Revising the section heading;
0
b. Removing the definitions ``Non-provider-based'' and ``Provider-
based'' from paragraph (a)(5); and
0
c. Revising paragraph (a)(6).
The revisions read as follows:
Sec. 17.101 Collection or recovery by VA for medical care or services
provided or furnished to a veteran for a non-service connected
disability.
(a) * * *
(6) Provider-based status and charges. Facilities that have
provider-based status by meeting the criteria in Sec. 17.100 are
entitled to bill outpatient facility charges and professional charges.
The professional charges for these facilities are produced by the
methodologies set forth in this section based on facility expense RVUs.
Facilities that do not have provider-based status because they do not
meet the criteria in Sec. 17.100 are not permitted to bill outpatient
facility charges and can only bill a professional charge. The
professional charges for these facilities are produced by the
methodologies set forth in this section based on non-facility practice
expense RVUs.
* * * * *
0
3. Amend Sec. 17.106 by adding paragraph (f)(2)(viii) to read as
follows:
Sec. 17.106 VA collection rules; third-party payers.
* * * * *
(f) * * *
(2) * * *
(viii) A third party may not reduce or refuse payment if the
facility where the medical treatment was furnished is designated by VA
as provider-based, but
[[Page 64243]]
the facility does not meet the provider-based status requirements under
42 CFR 413.65 Centers.
* * * * *
[FR Doc. 2019-24880 Filed 11-20-19; 8:45 am]
BILLING CODE 8320-01-P
