Anatomy of a Pennsylvania Hospital Relocation

January 11, 2008Newsletters Staying Well within the Law

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As seen in Staying Well within the Law, a newsletter on the current legal issues facing today's health care industry.

While new hospitals open and existing hospitals close in Pennsylvania on a fairly routine basis, it is a rare occurrence for an existing hospital to relocate into a brand new facility. Such relocation involves significant coordination with various Pennsylvania state agencies including the Department of Health, the Department of Public Welfare, the Department of Environmental Protection and the State Board of Pharmacy, as well as federal agencies such as the Centers for Medicare and Medicaid Services, the U.S. Drug Enforcement Administration, and the U.S. Occupational Health and Safety Administration.

Tackling Relocation

The first major task in tackling a hospital's relocation is to ensure that all appropriate state agencies are notified of the relocation and that all required state and local licenses, permits, and registrations are updated to reflect the location and characteristics of the new facility. The initial step in this process is to notify the Pennsylvania Department of Health of the anticipated relocation and request that the hospital's license be transferred from the old facility to the new. The Pennsylvania Health Care Facilities Act and the Pennsylvania hospital licensure regulations do not specifically address the process for transferring a hospital's license in the event of a relocation. There are only certain notification requirements that apply to certain aspects of the relocation, such as 60-days notice to add new services or increase the facility's bed complement, 30- days notice to schedule a clinical inspection for new or relocated services, and so on.

The Department of Health views the relocation of a hospital as a process involving the closure of an existing hospital facility and the simultaneous opening of a new hospital facility. All of the requirements to close the existing facility and to safely and effectively transfer patient care to the new facility must be met, while the new facility must be inspected carefully to ensure full compliance with the Pennsylvania hospital licensure regulations. Notwithstanding this process, a relocating hospital is permitted to keep its old license number, which is removed from the old facility on the date of closure and reissued with the address and bed count for the new facility on the date of reopening. While a full licensure survey by the Department of Health is not needed in connection with the relocation, a comprehensive clinical inspection of the new facility is performed by the Division of Acute and Ambulatory Care of the Department of Health. Any deficiencies from the old facility will carry over to the new facility.

Transferring the hospital's license ultimately involves a three-step process. First, the Division of Safety Inspection of the Department of Health performs an onsite survey of the construction and fire safety aspects of the new facility and grants an occupancy approval. Following receipt of the occupancy approval, the Division of Acute and Ambulatory Care of the Department of Health conducts a clinical life safety inspection of the new facility. The last step in the process involves a "close-out" survey of the old facility by the Division of Acute and Ambulatory Care of the Department of Health.

Coordination and Communication are Key

The relocation of a Pennsylvania hospital requires frequent communications and written updates to the Department of Health regarding the status of the relocation. In addition, the Department of Health requires that a relocating hospital put together a detailed "closure plan" that addresses such issues as the re-routing of patients from the old facility to the new facility, locking the doors and providing additional security at the old facility, provision of adequate nursing and staff coverage during the relocation, communications with the public, emergency service providers and various government officials, and maintaining infection control procedures, among others.

In addition to coordinating with the Department of Health, it is also important to coordinate with several other Pennsylvania state agencies. In order to update the hospital's clinical laboratory permit and CLIA certificate of accreditation, a "change in status" form must be submitted to the Department of Heath, Bureau of Laboratories. It is also necessary to request amendments to the hospital's registration for radiation-producing machines and license to posses radioactive materials from the Pennsylvania Department of Environmental Protection.

If the hospital has a pharmacy, it will be necessary to submit a new pharmacy application to the Pennsylvania State Board of Pharmacy. The Department of Agriculture may need to be contacted in connection with the opening of the hospital's new cafeteria.

In addition to handling the hospital's state licenses, permits, and registrations, it is also necessary to coordinate with PennDOT and the local municipality(ies) in which both the old facility and new facility are located in order to update the signage on adjoining state and local roads leading patients and emergency providers to the hospital.

Depending on the scope of services provided by the hospital, it may be necessary to coordinate with the Division of Nursing of the Department of Health, the Pennsylvania Department of Public Welfare, Office of Mental Health and Substance Abuse Services, and the Pennsylvania Department of Aging.

In addition to notifying the various state agencies as discussed above, it is also necessary to update a relocating hospital's licenses, permits, and certifications from various federal agencies. For instance, it is necessary to request an amendment to the hospital's radioactive materials license from the U.S. Nuclear Regulatory Commission and the hospital's blood lead analysis registration with the federal Occupational Safety and Health Administration. If the hospital participates in research studies, the hospital may also need to update its Office for Human Research Protections institutional review board and federalwide assurance registrations from the U.S. Food and Drug Administration. The hospital's licenses for wireless medical telemetry devices and microwave radio communications from the Federal Communications Commission will also need to be updated, as well as the hospital's controlled substances registration from the U.S. Drug and Enforcement Administration.

Billing, Compliance & Accreditation

A significant aspect of the relocation process involves coordination with the hospital's various government and third party payors in order to ensure a seamless transition for the hospital's billing and collections. First, a completed Medicare enrollment application on Form CMS-855A should be submitted to the hospital's fiscal intermediary in order to update the hospital's provider enrollment information on file with the Centers for Medicare and Medicaid Services. Similar enrollment application forms also should be submitted to the Pennsylvania Department of Public Welfare, Office of Medical Assistance Programs, in order to update the service locations for the hospital's Medicaid provider numbers.

Next, the hospital needs to ensure that it is in compliance with the terms and provisions of the participating provider contracts between the hospital and its third party payors. For many hospitals, this could involve notification to dozens of payors. The payors each have varying notification requirements so it is important to begin this process as soon as possible. The hospital also needs to notify its significant suppliers, vendors, and equipment lessors of the relocation.

It is necessary to coordinate with the hospital's various accreditation agencies in order to ensure compliance with their respective accreditation requirements. These agencies may include the Joint Commission, the College of American Pathologists, the American College of Radiology, the AABB, the American Osteopathic Association, the Joint Review Committee on Education in Radiologic Technology, and the Intersocietal Commission for the Accreditation of Vascular Laboratories.

The relocation of a hospital is a complex, detailed process. It is extremely important to begin the regulatory and administrative notification efforts as soon possible following the decision to relocate in order to allow sufficient time for the updating and transfer of the hospital's various licenses, permits, registrations, and accreditations.