- CMS has released final guidance informing hospitals that they may "co-locate" with other hospitals and healthcare entities to share common areas on the same campus or in the same building, along with staff and services.
- The document, which follows the agency's 2019 draft guidance on co-location, addresses how CMS and state agency surveyors should evaluate a hospital's space sharing or contracted staff and service arrangements with another hospital or healthcare provider when assessing compliance with Medicare conditions of participation. The policy is effective immediately.
- The American Hospital Association, which had long pressed for clarification on CMS' co-location policies, welcomed the guidance, saying in an email to Healthcare Dive that space sharing arrangements will add value to the healthcare delivery infrastructure.
Hospitals are choosing to co-locate with other hospitals or healthcare entities as they look for ways to become more efficient and develop new care delivery models. AHA has argued that space sharing arrangements improve access to care, particularly in rural areas. Such arrangements help support visiting specialists in hospitals, for example.
Before CMS issued its draft guidance on shared space arrangements for hospitals and healthcare facilities, AHA warned the agency in a September 2017 letter that lack of clear direction on its expectations for co-location partnerships was causing concern among hospitals fearing they could be found to be non-compliant with CMS rules.
As a result, some hospitals were unwinding shared location or service arrangements, the trade group said.
Each hospital and healthcare provider sharing a space is responsible for demonstrating independent compliance with all Medicare and Medicaid program participation requirements to ensure safety and quality of care for patients, CMS reiterated in its final guidance.
The agency said it aims to provide the information hospitals need to make decisions about how to partner with other providers. State Operations Manual Appendix A will be updated to include co-location guidance as a component of the hospital survey process.
AHA praised CMS for taking a flexible approach to the partnerships, emphasizing that clarity in applying the Medicare conditions of participation in co-located arrangements is vital to hospitals and other healthcare entities.
"In its final guidance, CMS has made important revisions that will allow hospitals and health systems the flexibility to utilize co-location agreements to improve services and efficiency ultimately benefiting the patients and communities they serve," said Mark Howell, AHA's senior associate director of policy.
However, health lawyers at McDermott Will & Emery, in an analysis, said the new guidelines create ambiguity around how the requirements may be applied by CMS or state surveyors, with the potential for inconsistent results.
The final guidance appears to remove controversial aspects of the draft guidance such as restrictions on co-mingling of hospital space with space used by other care providers, "floating" nursing staff arrangements and use of staff from a co-located hospital to provide rarely needed services, the attorneys said. But a revision that states that the guidance does not apply to critical access hospitals or private physician offices creates confusion, they noted.
Generally, CMS guidance outlines how hospitals should organize shared spaces, services, personnel and emergency services to meet regulatory requirements. Hospitals should consider the risk to compliance through any shared space or service when partnering with other providers, the agency stressed.
Among the types of acceptable arrangements, a hospital may be co-located in its entirety, or only one part of a hospital such as its inpatient services or an outpatient department may be in another hospital's building or on its campus. An outpatient department may also be located in an ambulatory surgical center, a rural health clinic, federally qualified healthcare center, imaging center or other healthcare provider space.
Services such as laboratory, dietary, pharmacy, maintenance, housekeeping and security may be contracted in a co-located hospital. Contracted services also could include food preparation and delivery and utilities such as fire detection and suppression and alarm systems, according to the document.
A hospital is responsible for meeting staffing requirements in the Medicare conditions of participation whether staff are provided directly by the facility or under contract from another entity. When hospital staff are obtained from another provider, evidence that patients' needs are being met is required.