Innovative Hospitals = Micro-Hospitals in Pennsylvania

On August 5, 2019, the Pennsylvania Department of Health (“DOH”) issued a memo entitled “Guidance for innovative hospital models.” This guidance is in response to many license applicants who are looking to create a new form of hospital in Pennsylvania, one that exists in many other states, namely a “micro-hospital.” The Pennsylvania DOH has been hesitant to license a facility with less than the standard amount of hospital services, fearing issues related to patient safety, quality of care and/or patient access.

With the caveat that the facility will need to meet CMS guidelines and requirements to obtain Medicare certification as a “hospital,” the DOH has agreed to consider “innovative hospital models.” The DOH states that it “does not want to prevent innovative ways to provide patient care in a changing health care environment.”

Of course, the license applicant first needs to obtain approval of its plans with the Division of Safety Inspection and needs to file an application for licensure with the Division of Acute and Ambulatory Care. And, the applicant needs to meet all of the requirements of 28 Pa. Code Chapter 101.31. That being said, the DOH has noted some areas of departure or wiggle room. For example, if an applicant doesn’t plan to offer all of the medical services typically available in a hospital, it would need to document how those missing services will be provided (e.g., through transfer agreements with facilities located within a reasonable distance from the applicant). In the emergency department of an innovative hospital, without 24/7 surgical services, the facility needs to publically post a list of its bed complement, its treatment room capacity, its behavioral health capabilities in the emergency room, and its onsite imaging services.  Finally, the innovative hospital must comply with EMTALA.

Most interesting, the DOH guidance provides for some minimum requirements: a hospital needs to have a minimum of 10 inpatient beds, with one room to be a room to meet airborne infection isolation standards. It needs at least 10 treatment rooms in the emergency department including a pediatric room, a large treatment room and a trauma room. Further, a hospital must have a room dedicated to psychiatric care, as well as imaging services including general radiography, CT and MRI.

The DOH cautions that an innovative hospital must meet Medicare certification requirements, which means that the hospital must meet all of the statutory requirements of a “hospital” listed in Section 1861(e) of the Social Security Act (“SSA”), including the Medicare Conditions of Participation requirements (“CoPs”), in order to qualify as a hospital pursuant to a Medicare or Medicaid provider agreement. Section 1861(e)(1) defines a “hospital” as an institution that “is primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons.” (See 42 U.S.C. 1395x(e)(1)). The CoPs do not provide a definition of “primarily engaged.”

CMS issued guidance (on September 6, 2017) clarifying the “primarily engaged” standard. Among other things, CMS has noted that: a micro-hospital should have a minimum average daily census of two inpatients over a 12-month period and that its average daily census must not drop to zero over weekends; its average length of stay should be at least two midnights measured over a 12-month period; and the hospital should ensure that its number of inpatient beds can support its outpatient services (including for example inpatient beds v. emergency department bays and inpatient v. outpatient surgeries).

So, Pennsylvania might just be working toward more flexibility in its licensing of micro-hospitals, albeit CMS rules and requirements will still apply.