CMS Seeks to Establish Regulations Limiting Critical Access Hospital Location Requirement - McDermott Will & Emery

CMS Seeks to Establish Regulations Limiting Critical Access Hospital Location Requirement


Tucked into the recent proposed rule establishing Rural Emergency Hospital Conditions of Participation (CoPs) is a proposal to change the CoPs for critical access hospitals (CAHs). The Centers for Medicare & Medicaid Services (CMS) proposes to codify in regulation its long-standing definition of “primary road” used to determine whether a facility meets the CAH location requirement, and to conduct routine analyses of the location of all CAHs to determine if they continue to meet requirements related to the distance from other hospitals and CAHs. CMS also proposes to revise CoPs related to medical staff, infection control and quality.

In Depth

Comments to the proposed rule can be submitted to CMS electronically or by mail no later than August 29, 2022, with reference to file code CMS-3419-P.

CAHs must be located more than a 35-mile drive, or a 15-mile drive in mountainous terrain or in an area with only secondary roads available, from any other hospital or CAH (or must have been designated by their state as a “necessary provider” exempt from the mileage requirement). Prior to this proposed rule, no regulatory language referenced “primary road” (the opposite of “secondary road”) or defined the term. Instead, CMS had set forth the definition in Medicare Manual guidance. In response to a 2013 Office of Inspector General report related to CAH location requirements, CMS now (almost 10 years later) proposes to define “primary road” in regulation. CMS believes that this will provide clarity and consistency regarding distance requirements and will allow it to implement routine data-based monitoring of CAH location compliance.

The proposed definition of “primary road” clarifies that the location distance requirement for a CAH is that the CAH be more than a 35-mile drive on primary roads, or a 15-mile drive on roads in mountainous terrain or in an area with only secondary roads available, from a hospital or CAH. CMS further defined “primary road” to include either of the following:

  • A numbered federal highway (including interstates, intrastates, expressways or any other numbered federal highway)
  • A numbered state highway with two or more lanes each way.

The proposed regulatory definition removes roads that are shown on a map prepared in accordance with the US Geological Survey’s Federal Geographic Data Committee Digital Cartographic Standard for Geologic Map Symbolization as a “primary highway, divided by median strip.”

CMS specifically solicits comments regarding the description of a numbered federal highway in the proposed definition above and is interested in feedback on whether the definition of primary road should include numbered federal highways with two or more lanes, similar to the description of numbered state highway, and exclude numbered federal highways with only one lane in each direction.

Under the proposed rule, CMS would also review all hospitals and CAHs within a 50-mile radius of a CAH during review for initial eligibility and would re-review each CAH on a continuous three-year cycle. Each three-year review would initially focus on expanded healthcare capacity and access to care within the 35-mile radius of the CAH rather than roadway designations used to make the initial determination. Where there are no new hospitals within a 50-mile radius, the CAH would be immediately recertified. Where there are new hospitals within a 50-mile radius, an additional review would be conducted based on the distance and definitions for primary roads and mountainous terrain. Any CAH that did not meet the regulatory distance and location requirement at the time of any subsequent three-year review would be identified as non-compliant and could be subject to enforcement actions.

Unrelated to the proposed CAH location rule changes, CMS would also revise CAH CoPs related to medical staff, infection control/antibiotic stewardship and quality assessment performance improvement programs (QAPI) of a multi-hospital system. Under these proposed rules, CAHs would be able to operate with a system-level unified and integrated medical staff, and to establish and implement infection control, antibiotic stewardship and QAPI programs at the system level.

Practical Implications

If finalized as proposed, the location rule would generally maintain the status quo regarding how to measure distance between a CAH and another hospital or CAH. CMS estimates that three or four CAHs that do not meet current mileage definitions would retain CAH eligibility. However, if the alternative approach to exclude federal highways with only one lane in each direction is adopted, it could open opportunities for new CAHs.

The routine monitoring and removal of CAHs that do not meet the distance requirements is likely to result in de-designation. CMS does not provide an estimate of the number of potentially impacted CAHs. Although CAHs are required to ensure that they continue to meet distance requirements and report any changes to CMS, CMS has not consistently enforced this requirement and some CAHs may be unaware that they do not meet the criteria because of new hospitals or CAHs established within the distance limits.

The CoP changes for CAHs that operate as part of multi-facility systems would reduce administrative burden and duplication currently required under the CAH CoPs, but not under the hospital CoPs.

CAHs that currently rely on the mileage requirement for CAH eligibility should review their compliance with the current definition of primary road to determine the potential effect of the proposed rule, and should provide feedback to CMS if the rule would benefit or harm the CAH. CAHs that may lose eligibility under the proposed re-review process may need to conduct additional review of current compliance obligations and risks, as well as advocacy beyond preparing comments. CAHs that are part of a multi-facility system would benefit from the proposed rules and should communicate support to CMS, but should also evaluate compliance with the current CoPs in the event that the proposed rule is not finalized.