It is generally accepted that the Constitution of the United States is known as a “living document” because its authors intended it to be adapted by future generations. In the past 200 years, the Constitution has been amended 27 times. Additional amendments may be needed in the future. For example, advances in technology may change the way we communicate. Someday, we may be able to vote from our own homes.
The federal regulations that govern the Medicare program can be similarly ascribed as a living document. The regulations themselves don’t change very often, but The Department of Health and Human Services, as well as the Centers for Medicare and Medicaid Services are always interpreting the regulations and issuing guidance in how they apply to health care providers.
Unfortunately, there is no crystal ball to see the future in health care. Therefore, it is often up to the individual hospital to understand and interpret the rules. This is especially true in the evaluation of new services and programs a hospital may choose to offer to its community.
In reviewing a new service, a hospital should use the regulations to provide a framework in deciding whether the new cost center is allowable or non-reimbursable.
Costs of items or services that bear no relationship to care of hospital patients should be disclosed as non-reimbursable cost centers (Pub. 15-1, section 2328)
Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website:
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