CMS recently issued an advance copy of guidance to state survey agency directors that outlines how to determine whether a hospital seeking Medicare certification, or going through a continuing certification survey, is “primarily engaged in providing inpatient services” under the Social Security Act. That definition is key to compliance.

The new guidance amends Appendix A of the State Operations Manual used by survey agencies when conducting the hospital survey and certification process, highlighting two key factors that surveyors should consider: average length of stay (ALOS), and average daily census (ADC).

CMS explains that “generally, a patient is considered an inpatient if formally admitted as an inpatient with the expectation that he or she will require hospital care that is expected to span at least two midnights,” so surveyors should use an ALOS of two as one of the benchmarks considered for hospital certification. Because the Social Security Act refers to the provision of care to “inpatients,” the CMS guidance says that “hospitals must have at least two inpatients at the time of the survey in order for surveyors to conduct the survey.”

If a hospital does not have at least two inpatients at the time of a survey, the surveyors will review data for the past 12 months. If the hospital does not have a minimum ADC of two inpatients and an ALOS of two over the preceding 12 months, “the facility is most likely not primarily engaged in providing care to inpatients and the CMS Regional Office must look at other factors to determine whether a second survey should be attempted.” If the data show the hospital met the minimum at some point in the prior year, the surveyors will schedule a survey for another date.

CMS also advises surveyors on determining whether to conduct a second survey, recommend denial of an initial applicant, or terminate a current provider agreement. Surveyors should consider the number of provider-based off-campus EDs, as an unusually large number may suggest that a facility is not primarily engaged in inpatient care, according to the guidance.

Surveyors also should consider the number of inpatient beds in relation to the size of the facility and services offered, the guidance says, along with the volume of outpatient surgical procedures compared to inpatient surgical procedures.

The guidance also lists these points to consider:

• If the facility considers itself to be a “surgical” hospital, are procedures mostly outpatient? Does the information indicate that surgeries are routinely scheduled early in the week, and does it appear this admission pattern results in all or most patients being discharged prior to the weekend? For example, does the facility routinely operate in a manner that its designated “inpatient beds” are not in use on weekends?
• Patterns and trends in the ADC by the day of the week. For example, does the ADC consistently drop to zero on Saturdays and Sundays, thereby suggesting that the facility is not consistently and primarily engaged in providing care to inpatients?
• A review of staffing schedules should demonstrate that nurses, pharmacists, physicians, etc., are scheduled to work to support 24/7 inpatient care versus staffing patterns for the support of outpatient operations.
• How does the facility advertise itself to the community? Is it advertised as a “specialty” hospital or “emergency” hospital? Does the name of the facility include terms like “clinic” or “center” as opposed to “hospital”?

The full CMS guidance is available online at: http://go.cms.gov/2x017UK.