There have been a number of definitional or technical changes to the physician recruitment exception.

·        The definition of the hospital’s geographic service area, which was previously the area composed of these contiguous zip codes from which the hospital drew 75% of its inpatients, has been tweaked to exclude from that definition any zip code from which the hospital draws no inpatients so long as that zip code is totally surrounded by zip codes from which the hospital does draw patients.

·        If the hospital does not draw 75% of its patients from contiguous zip codes, then the service area will be composed of the contiguous zip codes from which the hospital does draw its patients, meaning that zip codes that are not contiguous but from which the hospital draws its patients will be available as relocation areas for recruited physicians.

·        There is also an optional definition for rural hospitals to allow them to use the contiguous zip codes from which they draw at least 90% of their patients, and to allow the hospital to include non-contiguous zip codes to their service area in decreasing order of the percentage of patients within those zip codes to be added.

·        The definition of physician as been defined to exclude residents and physicians who have been in practice for less than a year as long as those physicians establish a practice within the hospital service area. I assume the term residents will be interpreted broadly enough to include fellows.

·        The definition of allowable incremental costs that can be passed through in situations in which physicians have been recruited and are joining an existing rural practice has been broadened to include costs that are either the lower of actual, per capital, or 20% of the total costs.

·        Finally, hospitals may recruit physicians to prohibited rural areas with the approval of the Secretary.