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Based on record review, interview and observation the facility failed to be in compliance with federal laws when it failed to have sufficient evidence of complying with section 42 in the Code of the Federal Regulations (CFR), Chapter IV, section 413.65, paragraph (3)(i) on page 726 regarding outpatient services being located within a 35-mile radius of the hospital (main provider) and 75% of the patients who received treatment in the outpatient services failed to live in the same zip code as 75% of the patients served by the main provider and that at least 75% of the outpatients did not receive inpatient care by the main provider.

The facility census was 33.

Findings included:

1. Review of the Code of Federal Regulations (CFR),.42 CFR Ch. IV (10-1-10 Edition), section 413.65, paragraph (3)(i) on page 726, which determines if an outpatient facility meets the requirements to bill under the hospital's provider number, showed the following:
- "The facility or organization is located within a 35-mile radius of the hospital that is the potential main provider."
-(iv) If the facility or organization is unable to meet the criteria in paragraph(e)(3)(iii)(A) or paragraph(e)(3)(iii)(B) of this section because it was not in operation during all of the 12-month period described in paragraph) (3)(iii) of this section, the facility or organization is located in a zip code area included among those that, during all of the 12-month period described in paragraph (e)(3)(iii) of this section, accounted for at least 75 percent of the patients served by the main provider.

Review of the Program Memorandum from the Department of Health & Human Services (DHHS) Intermediaries Centers for Medicare &Medicaid Services (CMS), Transmittal A-03-030, dated: April 18, 2003, showed the following direction:
-In the April 7, 2000, Federal Register (65 FR 18504) published a final rule specifying the criteria that must be met for a determination regarding provider-based status. The regulations at existing 42 CFR ?413.65(b)(2) apply the same criteria to facilities on the main provider campus as to off-campus facilities, and state that before a main provider may bill for services of a facility as if the facility is provider-based, or before it includes costs of those services on its cost report, the facility must meet the criteria listed in the regulations. Those regulations were first effective for cost reporting periods beginning on or after January 10, 2001.
-Item #3 showed the following direction:
Location: The facility or organization is located within a 35-mile radius of the campus of the provider that is the potential main provider, except when the requirements in paragraph C.3.a, C.3.b, or C.3.c
(corresponding to ??413.65(e)(3)(i), (e)(3)(ii), and (e)(3)(iii)) are met:
(a) The facility or organization is owned and operated by a provider that has a
disproportionate share adjustment (as determined under ?412.106 of chapter IV of Title 42) greater
than 11.75 percent or is described in ?412.106(c)(2) of chapter IV of Title 42 implementing
?1886(e)(5)(F)(i)(II) of the Act and is:
(i) Owned or operated by a unit of State or local government;
(ii) A public or nonprofit corporation that is formally granted governmental powers
by a unit of State or local government; or
(iii) A private hospital that has a contract with a State or local government that
includes the operation of clinics located off the main campus of the hospital to assure access in a well-defined service area to health care services for low-income individuals who are not entitled to benefits under Medicare (or medical assistance under a Medicaid State plan).
(b) The facility or organization demonstrates a high level of integration with the main
provider by showing that it meets all of the other provider-based criteria and demonstrates that it serves the same patient population as the main provider, by submitting records showing that, during the 12-month period immediately preceding the first day of the month in which the application for provider-based status is filed with Centers for Medicare and Medicaid Services (CMS), and for each subsequent 12-month period:
(i) At least 75 percent of the patients served by the facility or organization reside in
the same zip code areas as at least 75 percent of the patients served by the main provider;
(ii) At least 75 percent of the patients served by the facility or organization who
required the type of care furnished by the main provider received that care from that provider (for example, at least 75 percent of the patients of an Rural Health Clinic (RHC) seeking provider-based status received inpatient hospital services from the hospital that is the main provider); or(iii).
-Providers may submit Excel spreadsheets or other computer files with listings of all patients treated at the hospital and at the facility within the most recent 12-month period. The listing should include the patient's name, medical record number, date(s) of visit, date(s) of discharge, address, city, and zip code. To demonstrate compliance with ?413.65(e)(3)(ii)(A), after including the total number of patients from both the facility and the provider, the provider should list each zip code, and the number of patients from that zip code that were treated at the hospital, and the number of patients from that same zip codes that were treated at the facility.

St. John's Hospital - Lebanon is operating an outpatient department located in Rolla. The services of the Rolla outpatient department are being billed under the provider number of St. John's Hospital - Lebanon, but the outpatient facility failed to show it qualified for provider-based status.

2. Review of MapQuest driving directions showed the distance from the St. John's Hospital - Lebanon, MO, to the St. John's Outpatient location in Rolla, MO, as 58 miles.

3. Record review of the organizational chart for St. John's Hospital - Lebanon showed the following organizational structure for St. John's Rolla Outpatient Services:
-Staff B, Vice President Finance, St. John's Hospital Lebanon, manages the:
A. Rolla Medical Records; and
B. Rolla Business Operations.

-Staff C, Vice President Nursing, St. John's Hospital Lebanon, manages the:
A. Rolla Outpatient Surgery Center (also known as ambulatory surgery, same-day surgery or day surgery, is surgery that does not require an overnight hospital stay);
B. Rolla Pharmacy; and
C. Rolla Oncology (The branch of medicine that deals with tumors, including study of their development, diagnosis, treatment, and prevention).

-Staff J, Vice President Operations, St. John's Hospital - Lebanon, manages the:
A) Rolla Physical Therapy Services (Physical therapy is used to improve or restore physical function); and
B) Rolla Anesthesiology (The medical specialty concerned with general or local insensibility to pain and other sensation induced by drugs to permit the performance of surgery or other painful procedures).

-Staff D, Vice President Operations, St. John's Hospital - Lebanon manages the:
A) Rolla Imaging Center which included:
1) Computerized Tomography (CT scan combines a series of X-ray views taken from many different angles to produce cross-sectional images of the bones and soft tissues inside your body) ;
2) Dual-Emission X-ray Absorptiometry (DXA, previously DEXA, measures bone mineral density);
3) Echocardiogram (An echocardiogram uses sound waves to produce images of your heart);
4) Mammography (The process of using low-energy-X-rays to examine the human breast and is used as a diagnostic and a screening tool);
5) Magnetic resonance imaging (MRI) (A test that uses a magnetic field and pulses of radio wave energy to make pictures of organs and structures inside the body);
6) Nuclear medicine (A branch of medical imaging that uses small amounts of radioactive material to diagnose and determine the severity of or treat a variety of diseases);
7) Stress Lab (Provides tests used to measure the heart's ability to respond to external stress in a controlled clinical environment);
8) Ultrasound (An imaging method that uses high-frequency sound waves to produce precise images of structures within your body);
9) X-Ray (Used in medicine as a diagnostic aid as parts of the body, such as bones);
B) Rolla Sleep Lab (A sleep lab or sleep clinic is a facility which has been designed for the purpose of studying sleep disorders)

4. Observation on 01/18/12 from approximately 1:45 PM to 3:50 PM of Outpatient Services in Rolla showed the following services:
A) Surgery Center;
B) Oncology Center that provides Infusion Services ;
C) A Pharmacy to dispense the infusion medications for the Oncology Center;
D) Imaging Center;
E) Sleep Lab; and
F) Physical Therapy Services.

5. During an interview on 01/18/12 at 1:48 PM, Staff D, Vice President, stated the Sleep Lab in Rolla is an Outpatient Service of the hospital in Lebanon and services are billed under the Lebanon Hospital's provider number.

During an interview on 01/18/12 at 1:52 PM, Staff E, Director of Physical Therapy (PT) Services in Rolla stated the PT Services are an Outpatient Service of the hospital in Lebanon and the PT Services are billed under the Lebanon Hospital's provider number.

During an interview on 01/18/12 at 1:57 PM, Staff F, Director of the Sleep Lab in Rolla, stated the Sleep Lab Services are an Outpatient Service of the hospital in Lebanon and the services are billed under the Lebanon Hospital's provider number.

During an interview on 01/18/12 at 2:09 PM, Staff G, Director of Imaging in Rolla, stated the Imaging Services are an Outpatient Service of the hospital in Lebanon and the services are billed under the Lebanon Hospital's provider number.

During an interview on 01/18/12 at 2:16 PM, Staff H, Director of Surgical Services in Rolla, stated the Surgical Services are an Outpatient Service of the hospital in Lebanon and the services are billed under the Lebanon Hospital's provider number.

During an interview on 01/18/12 at 2:30 PM, Staff C, Vice President of Nursing, stated the Pharmacy in Rolla dispenses the infusion chemotherapy medications used in Oncology Services in Rolla. Both the Pharmacy Services in Rolla and the Oncology Services in Rolla are an Outpatient Service of the hospital in Lebanon.

During an interview on 01/18/12 at 2:36 PM, Staff I, Supervisor in Oncology Infusion Services in Rolla, stated the Oncology Infusion Services in Rolla are an Outpatient Service of the hospital in Lebanon and the services are billed under the Lebanon Hospital's provider number.

St. John's Hospital - Lebanon is operating an outpatient department located in Rolla. The services of the Rolla outpatient department are being billed under the provider number of St. John's Hospital - Lebanon, but the outpatient facility failed to show it qualified for provider-based status.

During an interview on 01/18/12 at approximately 3:50 PM, Staff B, Vice President/Chief Financial Officer (CFO), stated:
A) By virtue of the fact that St. John's Hospital-Lebanon has been approved and registered for the 340B program (A Pharmacy Program) since March of 2007, which was before the Rolla facility opened, it also meets the location requirements of 413.65(e)(3)(ii);
B) The Rolla Outpatient location opened around October of 2009;
C) Documentation that demonstrates that the facility serves the same patient population as the main provider during the 12-month period immediately preceding the first day of the month in which the application for provider-based status is not available for review;
D) The application for provider-based status for Outpatient Services in Rolla is not available for review. Staff B, CFO, stated he did not work for St. John's at that time these documents would have been completed and did not have documentation for items C and D of this paragraph. Staff B, CFO, stated he thought the documentation for items C and D of this paragraph were in an off-site location, but did not know where the off-site location was;
E) The documentation showing the zip code and percent of shared zip code addresses for the dates of 2009 to 04/29/10 was not done; and
F) He did not have any further data to present to clarify the report calculations.

6. Record review of zip code and percent of shared zip code address report provided by the facility (the report failed to have a title) for 05/01/10 through 04/30/11, showed the following:
-The column heading of "St. John's Clinic's" showed the percent of patients served in the same zip code as 95.97%; and
-The column heading of "St. John's Hospital-Lebanon" showed the percent of patients served in the same zip code as 92.4%;
The report failed to include the following information:
A) The patients' names;
B) Medical record number;
C) Dates of the visits;
D) Dates of discharge; or
E) The types of services provided
-Additional review of this document showed zip codes of non-residents of Missouri were included in the calculations. This showed patients who resided in the following states:
-Pennsylvania;
-Maryland;
-Georgia;
-Florida;
-Tennessee;
-Illinois;
-Kansas;
-Louisiana;
-Arkansas; and
Texas.
-Additional review of this document showed visits used in the calculations are from patients who resided in Missouri beyond the surrounding area zip codes of Lebanon or Rolla.

7. During an interview on 01/18/12 at approximately 5:00 PM and review of a letter dated 01/19/12, in regards to the 75% calculations for the zip codes and percent report dated 05/01/10 through 04/30/11, Staff A, President, stated: "The data was segregated into two separate pools based on service code which defines the department where the service was provided. The column labeled "St. John's Clinic" on the report provided represents patient encounters at our hospital-based services provided at our Rolla location and the column labeled "St. John's Hospital - Lebanon" represents patient encounters at our Lebanon hospital in Lebanon, MO. Each pool was summarized by zip code and the matching zip codes from each pool were used to determine patient populations served by both the Rolla and Lebanon locations. The total patients from the matching zip codes were divided by the total number of patients from each pool to determine the percentage of patients residing in a zip code that was served by both locations. The outcome of this test shows that 95.97% of all patients receiving services at the Rolla location reside in the same zip code as 92.97 of the patients receiving services at the Lebanon Hospital."
Staff A stated he did not have any further data to submit to clarify the report calculations.
-Staff A also confirmed:
-The column on the report for the Rolla location is titled "St. John's Clinic's" not St. John's Outpatient Services;
-The report failed to state the services provided making it unclear if the calculations used were from physician clinic visits or Hospital Outpatient Services;
-The report calculations included zip codes from other states;
-The report calculations included zip codes from areas beyond the zip codes immediately surrounding the hospital in Lebanon and the Outpatient Services location in Rolla; and
-The report failed to include:
A) Patients' names;
B) Medical record number;
C) Dates of the visits;
D) Dates of discharge; or
E) The types of services provided.
-Additional review of the report showed the reported was done in "Visit Counts" for "St. John's Clinic's" and "St. John's Hospital-Lebanon," not the total number of patients for each shared zip code as stated by Staff A.