CHICAGO – The American Hospital Association and four other national hospital associations have expressed concern over the definitions given to "hospital" and "hospital-based physician" as they pertain to eligibility for ARRA incentives.

The National Association of Public Hospitals and Health Systems (NAPH), the National Association of Children's Hospitals (NACH), the Federal of American Hospitals and the Association of American Medical Colleges (AAMC) joined the AHA in sending a letter to the U.S. Department of Health and Human Services on Dec. 11.

Hospitals eligibile for incentives under ARRA's "meaningful use" criteria are defined as Medicare subsection hospitals, which are general, acute care, short-term facilities. This approach relies exclusively on hospital identifiers, such as National Provider Identifiers (NPIs) or Medicare provider numbers.

The associations urge CMS "not to use an NPI or Medicare provider number as the sole criterion to define a hospital." Instead, they ask CMS "to use a multi-pronged approach that allows a 'hospital' to be defined in a way that acknowledge the varied organizational structure of multi-hospital systems, including by a distinct Medicare provider number, a distinct emergency department or a distinct state hospital license."

The associations said this would allow each distinct hospital to be eligible to qualify separately for incentives and suggest that CMS could use the hospital cost report, with "certain modifications" to collect data necessary to determine incentives.

In the current ARRA definition of a "hospital-based physician," all hospital-based professionals - those who furnish substantially all of their services in a hospital setting (whether inpatient or outpatient) - are excluded from receiving incentive payments. The hospital associations said the "broad regulatory interpretation of this hospital-based physician definition may inappropriately exclude physicians practicing in outpatient centers and provider-based clinics merely because their office or clinic is located in a facility owned by the hospital."

The definition for a hospital-based eligible professional should take existing Medicare policies into account, the groups said. For example, in Medicare regulations with respect to graduate medical education (GME), hospitals are able to receive GME funding for resident training programs in a non-hospital setting if they incur "all or substantially all of the costs for the training program," defined as at least 90 percent of these costs.

The associations recommend CMS define "substantially all" as at least 90 percent, with regard to meaningful use incentives.

According to current Medicare policies on physician e-prescribing services that are provided in outpatient centers and clinics, even if these services are provided in a facility owned by the hospital, they are excluded from the definition of a "hospital setting."

The associations recommend CMS "not consider services billed with the e-prescribing codes as services furnished in a hospital setting."