The Stark Law generally prohibits physicians from referring Medicare and Medicaid patients to facilities in which they have an ownership interest. There used to be a “whole hospital exception” excluding entire hospitals (as contrasted to departments or parts of hospitals) from the prohibition.
The Affordable Care Act eliminated the whole hospital exception, but made an exception to the elimination for existing hospitals. They’re subject to a grandfather exception to the elimination.
But there’s an exception to the grandfather exception to the elimination; it applies to otherwise-grandfathered hospitals that expand their facilities beyond their size as of enactment of the Affordable Care Act.
But there’s also an exception to the exception to the grandfather exception to the elimination of the whole-hospital exception. It’s for hospitals that convince CMS that there’s a true community need for the exception.
Until this month only one hospital had ever been able to convince CMS that it needed the exception. But on September 11 and 16 CMS blessed two more hospitals: Harsha Behavioral Center in Terre Haute, Indiana, and Doctors Hospital at Renaissance, in Edinburg, Texas. They both qualify for the exception to the exception to the grandfather exception to the elimination of the whole hospital exception to the Stark prohibition. So they can expand their facilities.
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