On November 12, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released final guidance confirming that hospitals can be co-located with other hospitals or healthcare providers.
CMS’ aim for the guidance is to balance flexibility in service provision for providers with ensuring patient confidence in CMS’ quality of care oversight functions.
The final guidance provides direction to state surveyors in the evaluation of a hospital’s compliance with the Medicare Conditions of Participation (“CoPs”) when it is sharing space or contracted staff through service arrangements with another co-located hospital or healthcare provider. CMS also reiterated a key tenet of co-location arrangements: that each provider must independently meet its applicable CoPs, but, overall, the final guidance is less prescriptive than the draft guidance CMS released in May 2019, and in its wake raises new questions for providers.
