By Ronald Hirsch, MD, FACP, CHRI

In 2019 the Centers for Medicare & Medicaid Services (CMS) adopted significant changes to the hospital discharge planning conditions of participation. As most know, the conditions of participation are rules by which a medical provider must abide to be able to provide care to Medicare and Medicaid patients and any other federally funded health care programs. The hospital conditions of participation can be found in Title 42, part 482 of the Federal Regulations and includes 25 subparts, encompassing everything from the medical staff and nursing services to food and dietetic services to infection prevention to fire safety, and of course discharge planning.

These discharge planning conditions were rewritten partially in response to the IMPACT Act, a law passed in 2014 that is intended to change and improve Medicare's post-acute care services and how they are reported. The law required CMS to develop standardized methods of reporting patient assessment data, quality measures, and resource use data. The result of that law was the development of the CMS website Care Compare, now called CMS Compare, which collects such data and presents it in a consumer-friendly way.

There were several significant requirements in the revamped conditions of participation that led to process change within hospitals. First, CMS requires that patients be offered the choice of any post-acute provider that can provide the necessary care and serve the geographic area where the patient wishes to receive care. In the past, hospitals would find an available post-acute provider and refer the patient there, without any input from the patient. They now must produce a list of all qualified providers including, at a minimum, the CMS Compare data on quality of care and resource use for each provider.

This raised the first question for which we now have clarification. If the patient required services from a post-acute provider, was the hospital permitted to limit the list to those providers who were able to accommodate the patient at that time? As the rule read, it sounded like the list must include every provider, regardless of their capacity. But CMS has now clarified that if, for instance, a skilled nursing facility does not have an open bed, that facility may be omitted from the list provided to the patient.

This clarification comes at great relief to many. In many communities, the highest-rated post-acute providers often had no capacity to accept a new patient and having to list that provider on the patient’s choice list created an adversarial situation where the patient would choose that facility and demand to remain in the hospital until they were able to be accommodated.  

The other clarification from CMS addresses the designation of post-acute providers as “preferred.” The practice of medicine has evolved with many attempts to reward providers who provide high-quality care rather than simply paying for the volume of care provided. This has led to many models of “value-based care” such as Accountable Care Organizations. With these models, hospitals partner with physicians, nursing facilities, home care agencies, outpatient therapists, and so on to create a network where care is closely monitored and the quality of care, not necessarily the quantity of care, leads to higher reimbursement.

It is in these organization’s best interests that their patients receive their care from these partners. But with the requirement that patients be given a choice of providers, were those partners allowed to be designated on the list presented to patients? In the 2019 regulation, CMS stated “Hospitals must not develop preferred lists of providers.” That seemed to most that hospitals were not permitted to designate their partners on the choice list in any way.

We now have clarification that hospitals can indeed designate their partners as “preferred” on the choice list. Rather, what CMS forbids is presenting the patient a list with only the preferred providers, or providing a list that includes all providers, including preferred partners, but does not include quality and resource use data, perhaps to hide the poorer performance of the preferred partner providers.

What is the bottom line? The lists that hospitals provide to patients when choosing a post-acute provider must be a living document and not a Xeroxed list that gets passed around. The list should include only the providers who can provide the care needed by the patient and have the capacity to accept the patient that day. The list should indicate which providers are contracted with the patient’s insurance company, although this is not a requirement.

The list must include at the minimum the CMS Compare data on quality and resource use, but you can include any other data you may have, such as readmission rates or outcomes based on diagnosis. And you are free to designate which facilities are participating in any value-based initiatives by designating them as preferred and/or sorting the list to show those providers at the top. And CMS continues to require a notation of any facilities where the hospital has ownership.

Look at your process and be sure you are not only meeting the requirements of the discharge planning conditions of participation but also providing the patient the individualized information to assist them in making the best choice for their next step in their health care journey.

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Bio: Dr. Ronald Hirsch is a Vice President of the Regulations and Education Group at R1 RCM Inc. Dr. Hirsch was a general internist and HIV specialist and practiced at Signature Medical Associates, a multispecialty practice located in Elgin, IL. He was Medical Director of Case Management at Sherman Hospital in Elgin, IL from 2006 to 2012, where he was Chairman of the Medical Records Committee from 1995 to 2012, and also served on the Medical Executive Committee. Dr. Hirsch is certified in Health Care Quality and Management by the American Board of Quality Assurance and Utilization Review Physicians, certified in Revenue Integrity by the National Association of Healthcare Revenue Integrity, and on the Advisory Board of the American College of Physician Advisors. He is on the editorial board of He is the co-author of The Hospital Guide to Contemporary Utilization Review, with the third edition published in 2021.