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Based on observations, interviews, policy review, and operating data review, the Governing Body and the Chief Executive Officer (CEO)(Refer to A057) failed to ensure that the facility functioned as a hospital as defined by the Social Security Act, in that they were not primarily engaged in providing services to inpatients. The lack of emphasis and oversight of inpatient services had the potential for the facility to be unprepared for appropriate inpatient care services. The facility census was one.

Findings included:

1. Record review of the document titled, "Social Security Act," section 1861(e)(1), showed the following definition: (e) The term "hospital " means an institution which - (1) Is primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons.

Record review of the facility's policy titled, "Inpatient Services Admission Criteria," revised 12/2015, showed the following:
- "The Inpatient Services Unit is staffed and equipped to care for up to five (5) inpatients ranging in age from infant to geriatric who:
-Require emergent or elective surgery needing routine post-operative care and/or close observation and rapid intervention to maintain their physical, psychosocial, and spiritual well- being; and/or
-Is acutely ill, including exacerbation of chronic illness needing close observation and rapid intervention to maintain their physical, psychosocial, and spiritual well-being. "

2. Observations on 03/07/16 at 1:55 PM of the Inpatient Services Unit showed five available patient rooms with one patient currently admitted. Two Registered Nurses (RN's) were present on the unit, staffing for the current patient.

3. Record review of documents totaling outpatient provider visits (any appointment made with a provider of services such as a doctor, nurse practitioner, or physician assistant) for all facilities under the provider number (identification number of the institutional provider certified by Medicare to provide services to the beneficiary), showed the following:
-Total outpatient provider visits in 2014: 92,240
-Total outpatient provider visits in 2015: 139,006
-Total outpatient provider visits from January 1, 2016 through March 8, 2016: 15,610

4. Record review of document titled, "Clinic Procedures," showed the following number of procedures (minor tasks that can be completed in the clinic by a provider such as toenail removals, joint injections, incision and drainage, and ear wax removal) performed in the outpatient clinics under the hospital provider number:
-Total outpatient clinic procedures in 2014: 1,281
-Total outpatient clinic procedures in 2015: 1,314
-Total outpatient clinic procedures from January 1, 2016 through March 8, 2016: 191

5. Record review of documents titled, "Outpatient Surgery Accounts" (a total report showing all surgical cases where the patient did not require admission to the hospital), showed the following totals for all outpatient surgeries (surgical procedures that did not require admission to the hospital once completed) performed at the facility:
-Total outpatient surgeries performed in 2014: 2,587
-Total outpatient surgeries performed in 2015: 2,595
-Total outpatient surgeries performed from January 1, 2016 through March 9, 2016: 520

6. Record review of document titled, "Inpatient Surgeries (surgical cases that require a patient to remain in the hospital for a minimum of one day after the procedure is completed)," showed the following number of patients who were admitted to the hospital post-surgery:
-Total inpatient surgeries performed in 2014: 86
-Total inpatient surgeries performed in 2015: 48
-Total inpatient surgeries performed from January 1, 2016 through March 9, 2016: 9

7. Record review of a document with the yearly totals for Emergency Department (ED) visits (any patient who presented to the Emergency Department for care) showed the following:
-Total ED visits in 2014: 16,563
-Total ED visits in 2015: 16,171
-Total ED visits from January 1, 2016 through March 7, 2016: 2,741

8. Record review of a document titled, "ED Admissions" (any patient who presented to the Emergency Department for care and was evaluated as needing admission to the hospital for further treatment), showed the following:
-Total ED admissions to the Inpatient Unit in 2014: 369
-Total ED admissions to the Inpatient Unit in 2015: 4
-Total ED admissions to the Inpatient Unit from January 1, 2016 through March 7, 2016: 31
9. Record review of a document with the daily census totals (the total number of patients on the inpatient unit for that day) for the Inpatient Unit showed the following:
-The average daily census on the Inpatient Unit for 2014: 7.3
-The average daily census on the Inpatient Unit for 2015: 0.5
-The average daily census on the Inpatient Unit from January 1, 2016 through March 9, 2016: 1.9

The review of data from the facility for the last two years, showed a significant difference in outpatient service volume versus inpatient service volume. The bulk of services continued to be outpatient.

During an interview on 03/10/16 at 10:00 AM, Staff H, sole Shareholder, CEO, Chairman of the Board (there were no other Board members) and Compliance Officer (a corporate official in charge of overseeing and managing compliance issues within an organization, ensuring, for example, that a company is complying with regulatory requirements and that the company and its employees are complying with internal policies and procedures), stated the following:
-He was aware of, and approved, all the information requested and given to the survey team.
-He believed that the survey was focused on the definition of a hospital based on the requests for specific data.
-"We satisfy the state definition of a hospital, but not the federal. I thought we had come to a reasonable accommodation on that after the previous survey."
-"If we are to be primarily engaged in inpatient services over outpatient services, then we don't do that, but I can name you 1,000 other hospitals that don't meet that definition of a hospital."

Based on interviews, policy review, and record review, the Chief Executive Officer (CEO), who also served as the Chairman of the Board (COB) (there were no other Board members) and Compliance Officer (a corporate official in charge of overseeing and managing compliance issues within an organization), failed to ensure that the facility functioned as a hospital as defined by the Social Security Act, in that they were not primarily engaged in providing services to inpatients. The lack of emphasis and oversight of inpatient services by the CEO had the potential for the facility to be unprepared for appropriate inpatient care services. The facility census was one.

Findings included:

1. Record review of the facility provided document titled, "Organization Chart" showed Staff H, as the COB, and sole member of the board, and directly below was also Staff H, as the CEO.

2. Record review of the document titled, "Social Security Act," section 1861(e)(1), showed the following definition: (e) The term "hospital " means an institution which - (1) Is primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons.

3. Record review of documents totaling outpatient provider visits (any appointment made with a provider of services such as a doctor, nurse practitioner, or physician assistant), clinic procedures (minor tasks that can be completed in the clinic by a provider such as toenail removals, joint injections, incision and drainage, and ear wax removal), outpatient surgeries (surgical procedures that did not require admission to the hospital once completed) and Emergency Department (ED) visits for all locations under the provider number (identification number of the institutional provider certified by Medicare to provide services to the beneficiary) showed the following:
Estimated total outpatient visits for 2014: 112,671
Estimated total outpatient visits for 2015: 159,086
Estimated total outpatient visits from January 1, 2016 through March 7, 2016: 19,062

4. Record review of documents totaling inpatient admissions that occurred through inpatient surgeries (surgical cases that require a patient to remain in the hospital for a minimum of one day after the procedure is completed) and ED admissions (any patient who presented to the ED for care and was evaluated as needing admission to the hospital for further treatment) showed the following:
Estimated total inpatient admissions for 2014: 455
Estimated total inpatient admissions for 2015: 52
Estimated total inpatient admissions from January 1, 2016 through March 7, 2016: 40

The review of data from the facility for the last two years, showed a significant difference in outpatient service volume versus inpatient service volume. The bulk of services continued to be outpatient.

During an interview on 03/10/16 at 10:00 AM, Staff H, sole Shareholder, CEO, COB, and Compliance Officer stated the following:
-He was always made aware of the facility operations by his staff; "you can assume I'm aware of everything."
-He was aware of, and approved, all the information requested and given to the survey team.
-He believed that the survey was focused on the definition of a hospital based on the requests for specific data.
-"We satisfy the state definition of a hospital, but not the federal. I thought we had come to a reasonable accommodation on that after the previous survey."
-"If we are to be primarily engaged in inpatient services over outpatient services, then we don't do that, but I can name you 1,000 other hospitals that don't meet that definition of a hospital."