What is a "micro-hospital"?

Micro-hospitals are small-scale inpatient facilities that offer a wide range of medical services in a small, neighborhood setting. They run 24/7, all year long, and commonly have between eight and 10 beds where patients can be observed or admitted for a short stay. Micro-hospitals must be primarily engaged in providing inpatient care. 

In making a determination of whether or not a facility is “primarily engaged” in providing inpatient services, CMS will now consider these specific factors:

  • Average daily census; 
  • Average length of stay;
  • Number of off-campus provider-based emergency departments: Higher numbers of off-campus emergency departments indicates a hospital may not be “primarily engaged”;
  • Number of inpatient beds in relation to the size of the facility and the services offered;
  • Volume of outpatient surgical procedures to inpatient surgical procedures;
  • Volume of outpatient procedures for a “specialty” hospital (i.e., emergency or surgery); 
  • Patterns and trends in the ADC by the day of the week: For example, if the ADC consistently drops to zero on Saturdays and Sundays, this may show that the hospital may not be consistently providing inpatient care;
  • Staffing patterns: Staffing schedules should reflect support of 24/7 inpatient care versus patterns more appropriate for outpatient services; and
  • How the facility advertises itself to the community: CMS will look closely at how a hospital is holding itself out to the public – for example, whether the terms “specialty” hospital, “emergency” hospital, “clinic” or “center” are used.



Micro-hospitals can be a remote location of a hospital if the following requirements are met.  

42 CRF § 413.65 Requirements for a determination that a facility or an organization has provider-based status


(2) Definitions

Remote Location of a Hospital - A remote location of a hospital is defined as a facility or an organization that is either created by, or acquired by, a hospital that is a main provider for the purpose of furnishing inpatient hospital services under the name, ownership, and financial and administrative control of the main provider.

As long as approved as a remote location and the outpatient services are within the four walls of the hospital, this location will not be subject to the reduction in OPPS reimbursement. 


Hospital-outpatient services in buildings outside the main hospital but within 250 yards of the main hospital buildings are considered on campus and not subject to the reduction in OPPS reimbursement.


Hospital-outpatient services in buildings further than 250 yards of the main hospital buildings but within 35 miles (straight-line) of the main hospital can be approved as Provider-Based locations but will be subject to the reduction in OPPS reimbursement.  See  42 CFR § 413.65 for detailed requirements for Off-Campus Provider-Based locations.  

Was this article helpful?