Proposed Changes to Medicare’s Conditions of Participation: Co-Location

In May 2019, CMS released draft guidance for hospitals addressing co-location, which is the first time CMS has formally addressed co-location issues. When separate entities share space, staff, and/or services, they may considered co-located providers. Examples of co-location include a provider that leases space from a hospital or two hospitals that share space and staff.

Certainly, this guidance may change when finalized, but the draft guidance provides valuable information regarding how surveyors will determine compliance with Medicare’s Conditions of Participation (CoPs) for hospitals. Co-located providers should take note that if deficiencies are found in one co-located provider, immediate and/or future surveys of the other provider are likely.

The draft guidance will allow co-located entities to contract for staffing and/or services from their co-located provider. However, hospitals will continue to be independently responsible for meeting the CoP requirements. Thus staff, other than members of the medical staff, must be dedicated during shifts and are prohibited from floating between providers during a single shift. The hospital’s governing body must continue to provide appropriate oversight of staffing contracts, training, scheduling, and personnel, among other requirements.

If finalized, the rule will also allow providers more ability to share non-clinical space, such as waiting rooms and hallways, but will continue to impose strict prohibitions on sharing of non-public, clinical space where patients receive care. That clinical space must remain under the control of the hospital to ensure compliance with the CoPs, and the guidance directs surveyors to review floor plans to help determine what space can and cannot be shared under the draft guidance. Elizabeth Jepson is a member of a team at Brown & Fortunato, P.C. that routinely represents hospitals and health systems on a broad spectrum of corporate, regulatory and operational issues. The team is led by Beth Anne Jackson (bjackson@bf-law.com), Elizabeth Jepson (ejepson@bf-law.com), Lisa Smith (lsmith@bf-law.com), and Allison Shelton (ashelton@bf-law.com). You can reach the Hospitals and Health Systems team at Brown & Fortunato at 806-345-6300.