Sole Community Hospital (SCH)
Background:
Under the acute care hospital inpatient prospective payment system, special payment protections are provided to a SCH. Section 1886 (d)(5)(D)(iii) of the Act defines a SCH as a hospital that is the sole source of inpatient hospital services reasonable available to Medicare beneficiaries. The regulations (42 CFR 412.91) set forth the criteria a hospital must meet to be classified as a SCH.
Criteria for classification as a sole community hospital:
CMS classifies a hospital as a sole community hospital if it is located more that 35 miles from other like hospitals, or it is located in a rural area (as defined in 412.64) and meets one of the following conditions.
- No more than 25 percent of residents who become hospital inpatients or no more that 25 percent of the Medicare beneficiaries who become hospital inpatients in the hospital’s service area are admitted to other like hospitals located within a 35-mile radius of the hospital, or, if larger within its service area.
- The hospital has fewer than 50 beds and intermediary certifies that the hospital would have met the criteria in paragraph (a)(I)(i) of this section were it not for the fact that some beneficiaries or residents were forced to seek care outside the service area due to the unavailability of necessary specially services at the hospital are inaccessible for at least 30 days in each 2 out of 3 years.
1. Request for SCH STATUS
The hospital must make its request to its fiscal intermediary.
If the hospital is seeking sole community hospital classification based upon (1)(i) or (1)(ii) from the criteria above, the hospital must include the following information with its request:
The hospital must provide patient origin data (for example, the number of patients from each zip code from which the hospital draws inpatients) for all inpatient discharges to document the boundaries of its service area.
The hospital must provide patient origin data from all other hospitals located within a 35 mile radius of it or, if larger, within its service area, to document that no more than 25 percent of either all of the population or the Medicare beneficiaries residing in the hospital’s service area and hospitalized for inpatient care were admitted to other like hospitals for care.
Distance to each “like” hospital must be supported. Ensure all “like” hospitals have been identified by the provider. Verify the mileage between hospitals by using the most direct route using improved roads. The August 2, 2001 FR. [age 39875 states the distances between the hospitals will be checked using electronic geographic mapping services (such as Yahoo or MapQuest) or by physically driving the distance involved.
The MAC reviews the request and sends the request, with its recommendation to the appropriate CMS Regional Office. CMS reviews the request and the MAC’s recommendation and forwards is approval or disapproval back to the MAC.
2. Effective dates of classification:
Sole Community Hospital status is effective 30 days after the date of CMS’s written notification of approval. When a court order or a determination by the PRRB reverses an CMS denial of SCH status and no further appeal is made, the SCH status is effective as follows:
If the hospital’s application was submitted prior to October 1, 1983, its status as SCH is effective at the start of the cost-reporting period for which it sought exemption from the cost limits. If the hospital’s application for SCH status was filed on or after October 1, 1983, the effective date is 30 days after the date of CMS’s original written notification of denial.
When a hospital is granted retroactive approval of SCH status by a court order or a PRRB decision and the hospital wishes its SCH status terminated before the date of the court order or PRRB determination, it must submit written notice to the CMS regional office within 90 days of the court order or PRRB decision.
A written request received after the 90-day period is effective no later than 30 days after the request is submitted.
A hospital classified as a SCH who qualified for a payment adjustment receives the payment adjustment effective with the discharges occurring on or after 30 days after the date of CMS’s approval of the classification.
3. How long can you stay as a SCH:
An approved classification as a SCH remains in effect without need for re-approval unless there is a change in the circumstances under which the classification was approved. An approved SCH must notify the MAC if any change that is specified occurs. This notification will be reviewed by the applicable Reimbursement unit of the MAC, and a recommendation of cancellation will be submitted to CMS. If CMS determines that a SCH failed to comply with this requirement, CMS will cancel the hospital’s classification as a SCH effective with the date that the hospital no longer met the criteria for such classification.
A SCH must report the following tot the MAC within 30 days of the event:
- The opening of a new hospital in its service area
- The opening of a new road between itself and a like provider within 35 miles.
- An increase in the number of beds to more than 50.
- Its geographic classification changes.
- Any changes to the driving conditions that results in a decrease in the amount of travel time between itself and a like provider.
If CMS determines that a SCH has failed to comply with these requirements, CMS will cancel the hospital’s classification as a SCH effective with the date the hospital became aware of the event that resulted in the SCH no longer meeting the criteria for the classification.
4. Termination of SCH STATUS.
A hospital may at any time request cancellation of its classification as a SCH.
The cancellations become effective no later than 30 days after the date the hospital submits its request.
If a hospital request that its SCH classification be cancelled, it may not be reclassified as a SCH unless it meets the following conditions:
- At least one full year has passed since the effective date of its cancellations.
- The hospital meets the qualifying criteria that are in effect at the time it reapplies.
Please submit requests to: j15.reimbursement@cgsadmin.com
Reviewed: 12.02.22
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