Kansas hospital loses Medicare billing privileges, may be forced to close

CMS terminated Overland Park, Kan.-based Blue Valley Hospital's Medicare contract in April, and the hospital faced another setback last week when a federal judge ruled she did not have jurisdiction to hear the hospital's case against HHS and CMS challenging the Medicare termination decision, according to KCUR.

Here are six things to know:

1. Under rules enacted last September, a healthcare facility must average at least two inpatients per day and an at least two-night average length of stay to be considered an inpatient hospital for Medicare reimbursement. Facilities that fall short of these requirements may instead be considered same-day surgery centers, which have different reimbursement rates.

2. CMS said Blue Valley Hospital doesn't meet the new federal requirements for Medicare participation. A survey by state health officials in November found Blue Valley Hospital did not have any inpatients at that time, and a subsequent report showed the hospital performed about 309 outpatient surgeries, compared with 146 inpatient surgeries over a yearlong period.

3. Blue Valley Hospital officials acknowledged that the hospital fell short of the two-night average stay requirement, but they say the new federal requirements are arbitrary. "This action taken by CMS was not related to any patient safety or quality of care issue, but results from CMS' change in the definition of hospital under the Code of Federal Regulations," Blue Valley Hospital CEO D. Chris Dixon told The Kansas City Star in April.

4. The hospital sued HHS and CMS in federal court, claiming many of its patients have an expected length of stay of two nights, but they are able to go home earlier than expected due to the high-quality care they receive at the hospital. "CMS' new criteria suggests that hospitals should keep patients longer than necessary just to meet arbitrary CMS requirements, which is against public policy," the lawsuit states.

5. The hospital retained its Medicare billing privileges until last week, when a federal judge ruled she did not have jurisdiction to hear the case. Blue Valley Hospital immediately appealed the decision, according to KCUR.

6. Blue Valley Hospital is open and accepting patients. However, the hospital may be forced to shut down without Medicare funding, according to KCUR.

More articles on healthcare finance:

CHS on pace to make $500M capital investment in Indiana hospital network
Wisconsin hospital's Medicare contract in jeopardy after third CMS survey reveals deficiencies
5 hospital bankruptcies so far in 2018

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