Inpatient Facility Coding & Compliance Alert

Question: How can we apply for a reclassification of our facility from urban to rural?

Minnesota Subscriber

Answer: CMS has laid down specific criteria for a reclassification, for all Inpatient Prospective Payment System (IPPS) hospitals that come under Medicare Fee-For-Service-Program.

For a hospital located in an urban area to be reclassified as rural, it must meet one of the following criteria:

• It must be located in a rural census tract of a Metropolitan Statistical Area (MSA) as per the latest version of the Goldsmith Modification, Rural-Urban Commuting Area (RUCA) codes.
• There must be at least one state law or regulation that deems your facility to be a rural hospital or located in a rural area.
• The facility would meet all requirements of a Rural Referral Center (RRC) or a Sole Community Hospital (SCH) if it was located in that area. 

You can send your request to the CMS regional office, and the office shall decide on your application within 60 days.

If this reclassification takes effect, you may not apply for another classification. If you wish to cancel the rural reclassification at a certain point of time, it shall only be effective beginning with the next full cost reporting period.

As for the RRCs, they must retain their rural status for one complete cost reporting cycle, and the cancellation, if any; takes effect only in the beginning of the next federal fiscal year.