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Low Volume and Medicare Dependent Hospital Provisions Extended

December 16, 2016

On April 16, 2015, the Medicare Access and CHIP Reauthorization Act of 2015 was signed into law. One of the provisions of this law, Section 204, extends the Medicare Inpatient hospital low-volume payment adjustment for discharges occurring on or after April 1, 2015, through FY 2017 (that is, for discharges occurring on or before September 30, 2017), for hospitals under the inpatient prospective payment system.  

This adjustment allows hospitals 15 miles or greater from the nearest "subsection (d)" (section 1886(d) of the Act) hospital (IPPS hospital) as defined in 412.92 (c)(1) and have less than 1,600 Medicare discharges as specified in 412.101 to receive additional Medicare payments.

To receive the Low Volume payment, hospitals must provide notification to their Medicare Administrative Contractor that they continue to meet the mileage requirements post April 1, 2015.

On May 22, 2015, CMS published official notice through CMS Transmittal 3263 Change Request 9197 that states:

"The MACs shall notify hospitals that had a FY2015 low-volume hospital status determination on March 31, 2015, that their status has been reinstated for the remainder of FY 2015 provided that the hospital continues to meet the mileage criterion (that is, it continues to be located more than 15 road miles from any other IPPS hospital). In other words, the hospital will continue to have low-volume hospital status for the last half of FY 2015 provided there have not been any changes in the hospital's proximity to another IPPS hospital subsequent to the hospital's notification to its MAC that it met the low-volume hospital criteria for the first half of FY 2015."

Providers impacted by this provision should be looking for notification from their MAC and respond to the MAC's request for mileage confirmation as quickly as possible to avoid payment delays.

Another provision of this law, Section 205, extends the Medicare Dependent Hospital (MDH) program, through September 30, 2017. Consistent with previous extensions of the MDH program, providers that were classified as MDHs as of the date of expiration of the MDH provision will be reinstated as MDHs effective April 1, 2015, with no need to reapply for MDH classification with two exceptions:

  • MDHs that classified as SCHs on or after April 1, 2015
  • MDHs that requested a cancellation of their rural classification under §412.103(b)


Any provider that falls within either of the two exceptions listed above will not have its MDH status automatically reinstated retroactively to April 1, 2015. All other former MDHs will be automatically reinstated as MDHs effective April 1, 2015. Providers that fall within either of the two exceptions will have to reapply for MDH classification in accordance with regulations at 42 CFR 412.108(b) and meet the classification criteria at 42 CFR 412.108(a).

If you have questions about the low volume payment adjustment and MDH status, or need assistance making these requests, please contact Steve Rader or your Eide Bailly representative.