§1395uu Payments to Promote Closing or Conversion of Underutilized Hospital Facilities

Summary

Hospitals can ask the Secretary for a transitional payment when they close or change an underused hospital facility. They must apply in the form the Secretary requires. The Secretary can also set up a way to decide eligibility before the closure or change actually happens. To qualify, the closing or change must have been started after September 30, 1981, must be expected to help the program by cutting extra bed space, stopping a service that people can get elsewhere, or replacing a low-use service with one the area needs, and must agree with the local health planning agency and any State plan to reduce hospital beds. If the whole hospital is closing, it must be a private nonprofit or local government hospital and not a replacement. If the Secretary approves, the transitional payment can be counted as an allowable cost. The payment must match how the facility was used before or will be used. For conversions or partial closures, nonprofits and local government hospitals can get a share of capital costs already considered for payment, and any hospital can get extra operating costs that go beyond normal reimbursements. For a full closure, the payment can cover the unpaid part of recognized debts minus salvage value. The Secretary can set the payment period up to 20 years, or may give one lump sum for a full closure if that is more efficient. Payments start no earlier than the date the closure or change is finished. These transitional payments do not count toward certain cost limits or affect whether costs are higher than usual charges for payment rules. A hospital that disagrees can ask for an informal or formal hearing, and the Secretary must make a final decision within 30 days after the hearing ends.