On November 12, 2021, CMS released “final guidance” for state survey agencies regarding shared space and co-location arrangements between hospitals and other hospitals or healthcare providers. This guidance is intended to provide clarification on how hospitals may share and organize spaces, personnel and emergency services. The guidance relatedly seeks to provide clarity on how CMS and state surveyors will evaluate co-location arrangements within the Medicare Conditions of Participation (CoPs). This published guidance, which CMS states is effective immediately, is a revision to draft guidance proposed back on May 3, 2019.

At the outset, CMS clarifies that under Medicare CoPs, hospitals are permitted to share a campus or building with other hospitals and healthcare facilities, recognizing that such facilities may achieve certain efficiencies or accommodate different delivery systems of care by doing so. The stated goal of this guidance is to “allow flexibility” in shared space arrangements while “simultaneously protecting the safety and quality of care for patients.”

Both the draft and final guidance specify that participating hospitals are to be evaluated as a whole for compliance with the CoPs. However, the final guidance appears to omit specific requirements placed on co-locating facilities, and instead provides general instruction regarding how hospitals should consider how the use of shared spaces, contracted services, staffing and emergency services in co-location arrangements and how such arrangements might implicate compliance with the CoPs.

For example, the prior draft guidance expressly provides that hospitals are expected to have “defined and distinct spaces of operation” that include clinical spaces and provides description and examples of what could be permissible shared spaces. The final guidance forgoes this granularity, in favor of general guidance that the hospital should “consider whether the hospital’s spaces that are used by another co-located provider risk their compliance with” the CoPs. The final guidance specifies that some concerns that might be implicated by sharing space are patient rights such as the rights to personal privacy, confidentiality of patient records, and to receive care in a safe environment, and infection prevention and control.

CMS specifies that hospitals are each responsible for providing services in compliance with the hospital CoPs, and when those services are contracted or provided under arrangement in a co-located hospital, they must be provided under the oversight of the governing body of the hospital providing (and thus billing for) the arranged-for services and are treated and evaluated as any other service that is provided directly by the hospital. Some examples of such services given by CMS are laboratory, pharmacy, maintenance, housekeeping, security, and safety related utilities.

With respect to hospital staffing, the final guidance clarifies that whether staff are provided directly by the hospital or under arrangement or contract from another entity, including from facilities co-located with the hospital, the hospital is responsible for ensuring that hospital CoP staffing requirements are met. This final guidance removes specific prohibitions in the draft guidance against staff “floating” between two hospitals during a single shift for purposes of meeting staffing requirements.

With respect to emergency services, CMS recognizes that while hospitals should have policies and procedures to address potential emergency scenarios, that it may be appropriate in certain circumstances to transfer a patient to another provider, such as a co-located facility, for continuation of care. CMS clarifies that co-location does not change a hospital’s Emergency Medical Treatment and Labor Act (EMTALA) obligations, such that a co-located hospital being surveyed that has an emergency department or that is identified as providing emergency services must meet the requirements of EMTALA. The final guidance removes certain emergency services requirements set forth in the proposed draft guidance for a hospital co-located with another that does not have an emergency department. For example, the final guidance omits previously proposed requirements that any contracted staff for the appraisal and initial treatment of emergency patients not be working simultaneously at multiple facilities, and that hospitals without emergency departments co-located with another hospital cannot arrange to have that other hospital respond to its emergency patients.

The final guidance closes with procedures for surveyors examining co-located facilities. Again, the final guidance omits any of the substantive detail provided in the proposed draft guidance regarding what surveyors must obtain and will look for as part of the survey process. Instead, CMS now provides more general instruction that hospitals are to be evaluated for compliance with CoPs, the same as any other hospital and independent of its co-located provider. The final guidance does specify that during a survey, a deficiency might trigger a complaint for a co-located hospital. If this occurs, a complaint investigation can be performed while the surveyor is on-site but would result in two separate surveys with two separate survey reports.

A copy of the CMS’s Final Guidance for Hospital Co-location with Other Hospitals or Healthcare Facilities, Ref: QSO-19-13-Hospital as revised November 11, 2021 can be found on the CMS website here. A copy of the initial draft guidance from May 3, 2019 can also be found here.