Emergency Justification (signed)

DEPARTMENT OF HEALTH & HUMAN SERVICES
200 Independence Avenue. SW
Washington, DC 20201

CENTERS FOR MEDICARE & MEDICAID SERVIC~

OFFICE OF THE ADMINISTRATOR

Date:

April 28, 20 16

To:

Howard Shelanski
Adm inistrator, OIRA

From:

Andy Slavitt
Acting Administrator

Subject:

Request for Emergency Clearance Under the Papenvork Reduction Act Temporary Reclassification for Grandfathered L TCH HwHs for
Qualification for Temporary Exception from the Site Neutral Payment Rate
for Certain Discharges (CMS-10619; OMB 0938-New)

'Gv( ~

Justification
Section 231 of the Consol idated Appropriations Act of 2016 provides for a temporary exception
from the lower site neutral payment rate under the Long Term Care Hospital (LTCH)
Prospective Payment System (PPS) for certain hospital d ischarges from grandfathered Hospital
Within Hospitals (HWHs) "treated as being located [in a rural area] pursuant to subsection
(d)(8)(E)" of the Social Security Act. By law, this temporary exception expi res on December 3 L
20 16. Determining if a grandfathered HWH may be treated as being located in a rural area
requires information collectio n from those hos pita ls and this information collection may be
subject to the Paperwo rk Reduction Act depending on the number of quali fying HWHs. We are
implementing this information collection at CFR § 4 12.522(b)(2)(ii )(B)(2). The Centers for
Medicare & Medicaid Serv ices (CMS) requests approval of this information collection under the
5 CFR l 320. l 3(a)(2)(i) emergency clearance process in order to implement Section 231 of the
Consolidated Appropriations Act of2016 as expeditiously as possible. Public harm is
reasonably likely to ensue if the normal clearance procedures are fo ll owed si nce the approva l of
this information co llection process is essential to ensuring that qualifying grandfathered HWHs
are not unduly delayed in obtaining the temporary exception authorized by the law before its
expiration on December 3 1, 20 16. Entities would be paid the (lower) site neutral rate until the
information is co llected. Without the information, we would not treat an entity as rural which
would res ult in site neutral payment. Applications for reclassification are effective the date or
the application, which means a delay in PRA approval results in a shorter period of relief for
LTCHs that would otherwise benefit from the provision before its expiration.

INFORMATION NOT RELEASABLE TO THE PlJBLIC UNLESS AUTHORIZED BY LAW :
!"his inrormation has not been puhlicly disclosed and may he privileged and confidential. It is for internal governmc11t use only
amt must not be diss.:mi11ated. distributed. or copied lo persons not authoriz.:d to rec.:ive th..: information. Unauthorized
disclosure may result in prosecution lo the lidl extent or the law.

Background
Section 231 of the Consolidated Appropriations Act of 20 16 provides for a temporary
exception from the s ite neutral payment rate under the LTCI-I-PPS for certain discharges for
grandfathered LTCHs "treated as being located [in a rural area] pursuant to subsection (d)(8)(E)"
of the Social Security Act. The phrase "treated as being so located pursuant to subsection
(d)(8)(E)" is internall y inconsistent given the unique nature of LTCHs as a category of Med icare
provider. There is currenlly no mechanism which an LTCH may use to be treated as rural
pursuant to section I 886(d)(8)(E) of the Act because that section only applies to subsection (d)
hospitals, and LTCHs, by definition at section 1886(b)(1) of the Act are not subsection (d)
hospital s.
For urban subsection (d) hospitals, and now temporaril y L TCHs, we implemented the
rural reclassificat ion provision in the regulations at§ 4 12 .103. In general, the provisions of§
41 2 .103 provides that a hospital that is located in an urban area may be reclassified as a rural
hospital if it submits an application in accordance with our established criteria and meets certain
conditions, which include the hospital being located in a rural census tract of a MSA as
determined under the mos t recent version of the Go ldsm ith Mod ificat ion, the Rural Urban
Commuting Area codes, as determined by the Office of Rural Health Policy (ORI-IP) of the
Health Resources and Services Administration, or that the hospital is located in an area
designated by any law or regulation of the state in w hich it is located as a rural area, or the
hospital is designated as a rural hospital by state Jaw or regulation. Paragraph (b) of§ 412.103
sets forth application requirements for a hospital seeking reclassification as rural under that
section, which includes a written application mailed to the Center for Medicare and Medicaid
Services (CMS) regional nftice (RO) that contains an explanation of how the hospital meets the
condition that constitutes the request for reclassification, including data and documentation
necessary to support the request. As provided in paragraphs (c) and (d) of§ 412 .1 03, the RO
reviews the application and notifies the hospital of its approval or disapproval of the request
wi thin 60 days of the filing date (that is, the date the CMS RO rece ives the application), and a
hospital (that satisfies any of the criteria set forth § 412.103(a) is considered as being located in
the rural area of the state in which the hospital is located as of that filing date (meaning that the
hospital would be treated as rural for the purposes of exclusion from the s ite neutral payment rate
for severe wound discharges as of the filin g date).
For the purposes of implementing subparagraph (E) of section J 886(111)(6) of the Act as
provided by the Consolidated Appropriations Act, 2016, we are revising our regulations at
§412.522(b)(2)(ii)(B)(2) to utilize the same administrative mechani sms used in the existing rural
reclassi ft cation process for urban subsection (d) hospitals under § 412.103 and allow
grandfathered LTCH HwHs (previously defined in this [FC) to apply to their RO for treatment as
being located in a rural area for the sole purpose of qualifying for this temporary exclusion from
the application o f the site neutral payment rate. We note that this policy would on ly allow
grandfathered LTC H HwHs to apply for this reclassification, and the rural treatment would o nl y
extend to this temporary exception for certain wound care discharges from the s ite neutral
payment rate (meaning a grandfathered HwH LTCH will not be treated as rural for any other
reason including, but not limited to, the 25 percent po licy and wage index). We also note that
the any rural treatment under§ 41 2 .103 for a grandfathered HwH LTCH will expire al the same
lime as !his temporary pr0vision (that is, December 31, 2016).
INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORI ZED BY LAW:
This info rmati on has not hcen puhlidy disclosed and may be privileged and co nlidenlial. It is for int e rnal gove rnme nt use o nly
and 111us1 no t he di sseminated. d is tributed. or copied lo persons not authori,.ed to reccivc the information. Unauthori,.cd
disclosure may result in prosccution to the lull extent of thc law.

Submi ssion Schedule
Date
04/01/2016
04/05/2016
04/08/2016
04/15/2016 or
04/17/2016

04/2 1/2016
04/28/20 16
05/05/2016

Activity
Submit request to OMB
Request OMB approval of emergency process
Receive OMB comments for fina l version of emergency in format ion
co llection request.
• Interim Final Rule to display at Office of the Federal Register
(OFR)
• Emergency information collection request (ICR) will be
submitted upon confirmation of OFR display
• Interim Final Rule publishes in the Federal Register
• Seven day public comment period begins
• Seven day public comment period ends
Requested OMB approval date

INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW:
This inl"ormation has not been publicly disclosed a nd may be privileged and conlidcntial. It is !'or internal government use only
and mus t not be disseminated. distributed. o r copied to persons not autho ri,.ed to rccl!ivc the information. Unauthori1.cd
di sclosure may result in prosecution to the l"ull ex tent of the law.