CMS releases draft guidance on hospital co-location

Category: Centers for Medicare & Medicaid Services, CMS, hospital, co-location, Medicare

CMS releases draft guidance on hospital co-location


The Centers for Medicare & Medicaid Services (CMS) recently released draft interpretive guidance regarding hospital co-location in order to provide clarity as to how CMS and state survey agencies review a hospital’s space sharing and/or contracted staff arrangements with another hospital or healthcare entity.

As part of the broader deregulation efforts of the Department of Health and Human Services, the purported purpose of the proposed rule is to allow flexibility in space sharing and contracted staff arrangements while simultaneously ensuring patient safety and quality of care.

Prior to the release of the proposed rule, at a American Health Lawyers Association conference in Baltimore, a CMS representative, David Wright, said that this guidance was intended to promote uniformity of survey agency review throughout the United States and give general guideposts to providers, while allowing providers to “fill in the blanks” in terms of implementing the guidance.

A co-located hospital occurs when two hospitals or one hospital and another healthcare entity (such as a physician practice group) share space, staff, or services and are located on the same campus or in the same building. The co-located providers must independently demonstrate compliance with Medicare’s conditions of participation, as applicable.  The failure to fully correct any deficiencies found in a survey could result in a hospital’s loss of Medicare certification or provider-based status for outpatient locations, which could expose the provider to termination of their provider agreement, liability under the False Claims Act, and/or recoupment of outpatient prospective payment system reimbursement for non-compliant outpatient locations. 

Below are the key elements of the draft guidance:

  • Sharing public areas such as entrances, corridors through non-clinical areas and waiting rooms may be allowed
  • The guidance appears to allow shared spaces such as public lobbies, staff lounges, elevators, corridors through non-clinical areas, restrooms, and main entrances.
  • Waiting rooms and reception areas can be shared as long as the areas are separate and clearly defined, meaning each provider has its own reception desks and the signage clearly notes the provider.
  • Wright indicated that CMS and the state survey agencies proposed this guidance with the hopes of taking a step back from architectural review of locations. He also noted that signage identifying the separate entities must be placed on both the inside and outside of the building.
  • Sharing of clinical space should be avoided 
  • According to CMS, co-mingling of patients in any location where the patient is receiving care would pose risks due to each hospital having different policies and infection control plans, and could expose patients to increased personal privacy and medical record confidentiality risks.
  • Similarly, the draft guidance states that travel between separate entities through clinical spaces would be unacceptable due to the above risks.
  • During his presentation, Wright emphasized that there still needs to be an inability for one hospital to access the records of the co-located hospital or healthcare entity unless access is needed for care.
  • Sharing of staff may be permissible
  • Based upon the draft guidance and comments from Wright, contracted services must be distinct at the time the services are provided. In other words, a contractor needs to be contracted with hospital A on the day he/she provides the service to hospital A, and needs to be contracted with hospital/health care entity B on the day he/she provides the service to hospital B. In other words, the contracted provider cannot “float” between hospital A and hospital B on the same day or be “on-call” at both locations at the same time.
  • It is worth noting that governing body approved medical staff may be shared or “float” between the co-located hospitals if the providers are privileged and credentialed at both hospitals and the hospitals are part of a multiple hospital system.

With regard to on-site surveys, the draft guidance requires that surveyors request a copy of a floor plan, showing the spaces that are exclusive to the hospital being surveyed and spaces that are shared with another health care entity. A deficiency related to a shared space would be considered non-compliance for both entities that share the space. In other words, a surveyor conducting a survey of one hospital may initiate a complaint against the co-located hospital or health care entity for non-compliance in a shared space even though that entity was not the focus of the survey. Although the draft guidance does not specifically address how this complaint would be handled, presumably there would be an ability to cure through a plan of correction, as is currently the case for most deficiencies.

Hospitals without emergency departments are required to have appropriate policies and procedures in place for the 24/7 provision of patients’ emergency care needs. If a hospital does not have an emergency department, and is co-located with another hospital, it may not arrange for that other hospital to respond to its emergencies to assess and provide initial emergency treatment to the patient. However, the hospital may, after assessing and providing initial treatment to the patient, transfer the patient to the co-located hospital for continuation of care.

Unusual for interpretive guidance publications, CMS is soliciting public comment regarding the draft policies in order to become fully informed of how its guidance “will impact hospital providers.”

Comments are due to CMS by July 2, 2019. 

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