CMS Extends Deadline for Low-Volume Hospitals and the Medicare-Dependent Hospital Program

by King & Spalding

On March 14, 2014, CMS released an interim final rule implementing a six-month extension of the low-volume payment adjustment and Medicare-Dependent Hospital (MDH) program under the inpatient prospective payment system (IPPS) rule for fiscal year 2014.  These changes were made in accordance with sections 1105 and 1106 of the Pathway for SGR Reform Act of 2013, a December 2013 law (Pub. L. No. 113-67) that made continuing appropriations for FY 2014.

For the applicable low-volume percentage increase to be applied to payments for discharges on or after October 1, 2013 (the beginning of FY 2014) and on or before March 31, 2014, a hospital must:

  • have fewer than 1,600 Medicare discharges annually;
  • be located 15 road miles or more from the nearest subsection (d) hospital (i.e., IPPS); and
  • make its request for low-volume hospital status in writing to its Medicare Administrative Contractor by March 31, 2014, and provide documentation that it meets the 15-mile mileage criterion; CMS will accept the use of a web-based mapping tool, such as MapQuest, as part of acceptable documentation related to the mileage requirement.

CMS generally will permit hospitals that qualified for the low-volume payment adjustment in FY 2013 to continue to receive a low-volume payment adjustment in FY 2014 (effective October 1, 2013) without reapplying, so long as they have not been reclassified as a sole community hospital (SCH), or have not requested a cancellation of their rural classification.  If, however, a former MDH requested cancellation of its rural classification, or if it was classified as a SCH on or after October 1, 2013, it would need to reapply for MDH status—which would be effective prospectively only (i.e.,effective on the date the hospital receives notice that it again meets the requirements for MDH status).  Hospitals falling within the exceptions stand to lose several months of MDH status, and the more favorable reimbursement associated with it, simply because they acted to limit the negative reimbursement impact from what appeared to be the end of the MDH program. 

If a hospital reclassified to SCH status or cancelled its rural status effective on a date after October 1, 2013, CMS instructs that “MDH status will be reinstated effective from October 1, 2013 but will end on the date on which the provider changed its status to an SCH or cancelled its rural status.”  Hospitals falling within this category may reapply for MDH status, which status will be effective 30 days from the date the hospital is notified of the determination, consistent with 42 C.F.R. § 412.108(b)(4).  

Starting on April 1, 2014, the 6-month extension of the temporary changes to the low-volume hospital payment adjustment policy will expire and the low-volume hospital definition and payment methodology will revert back to the statutory requirements that were in effect prior to the amendments made by the Affordable Care Act.

CMS projects a $227 million increase to small rural hospitals and providers, as well as other classes of hospitals and providers.  The interim final rule is available here and is set for publication in the March 18, 2014 Federal Register (with a 60-day comment period from the date of publication). 

Reporter, Juliet M. McBride, Houston, + 1 713 276 7448,

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.