House Reps Ask HHS to Clarify Critical Access Hospital Payment Rule

July 26, 2022 - A bipartisan group of 25 House members has asked HHS to clarify its plans regarding the enforcement of Medicare’s 96-hour payment rule for critical access hospitals (CAHs) following the end of the COVID-19 public health emergency (PHE).

In a letter to HHS Secretary Xavier Becerra, the members expressed concern about the consequences CAHs may face if HHS does not continue waiving the 96-hour rule after the PHE.

The rule, established through the Balanced Budget Act of 1997, requires CAHs to ensure that inpatients will be discharged or transferred to another hospital within 96 hours of admission. CAHs must comply with this rule in order to receive payment.

A related Medicare condition of participation states that CAH inpatient stays must remain below 96 hours on an annual average basis.

HHS reduced its enforcement of the payment condition in 2018 before the COVID-19 pandemic hit because of the financial burden it created for CAHs. In 2020, the department waived the requirement as part of the PHE regulatory flexibilities.

The PHE is still in place until at least October 13, 2022. However, healthcare stakeholders must prepare for what the industry will look like once the PHE and its accompanying waivers and flexibilities end.

In the past, enforcement of the 96-hour rule led CAHs to refuse care to patients, forgo payments, or unnecessarily transfer a patient to a larger facility, according to the letter.

If HHS had enforced the rule during the pandemic, it would have been essentially impossible for CAHs to treat COVID-19 patients due to the extended length of stays, the House members wrote.

“Even after the PHE formally ends, COVID and other respiratory diseases are likely to cause some patients to need hospitalizations lasting longer than 96 hours,” the letter stated. “These and other patients who can safely and effectively be treated in their local hospital deserve the option of receiving care closer to their homes, families, and usual doctors.”

CAHs are an essential source of care in many rural communities. Reinstating the 96-hour payment rule could reduce access to care and impact physicians’ ability to make decisions about patient care.

The representatives raised concern that HHS will begin prioritizing the enforcement of the 96-hour rule again once the PHE ends. They asked HHS to clarify its enforcement plans for the future.

Specifically, the letter included five questions for HHS to answer in writing by September 9, 2022:

• Upon termination of the COVID-19 PHE, do you intend to reinstate enforcement of the 96-hour conditions of participation or payment?
• What rationale was employed in determining whether the condition(s) would be enforced following the PHE?
• If either condition will be enforced after the end of the PHE, will there be a grace or phase-in period before penalties will be applied to CAHs that fail to meet the condition(s)?
• What impact do you believe enforcement would have on the outcomes of patients hospitalized for treatment of COVID-19, pneumonia, and other acute respiratory infections?
• Do you support legislative efforts to repeal either or both of the 96-hour conditions?

In addition to the impact on patient care, reinstating the 96-hour rule could limit CAH reimbursement and lead to financial consequences.

A report from the Bipartisan Policy Center found that, due to the pandemic, many CAHs and rural hospitals are facing financial risk factors putting them at risk of closure.

As seen by the decision to reduce enforcement of the policy in 2018, the 96-hour rule was controversial even before the pandemic.

In 2019, the American Hospital Association (AHA) suggested to CMS that eliminating the rule would help reduce the burden of medical billing.