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CMS Releases Draft Guidance on Hospital Co-Location with Other Healthcare Entities

If finalized this could affect the sub-regulatory guidance for ASCs in State Operations Manual Appendix L

BY KARA NEWBURY | MAY 2019

On May 3, 2019, the Centers for Medicare & Medicaid Services (CMS) released draft hospital co-location interpretive guidance. This guidance is interesting for a couple of reasons. First, CMS is being more transparent when working on sub-regulatory guidance and providing a comment period before finalizing. In the past, the agency would send confidential drafts to various stakeholders—including ASCA—and ask for feedback but not open them for public comments, like you would have with a change to the Code of Federal Regulations. Second, the guidance would provide more flexibility for hospitals and other healthcare entities, including ASCs, to share the same physical space. Here is information from the draft guidance:

“This guidance clarifies how a hospital can be co-located with another healthcare provider to and demonstrate independent compliance with the Medicare Conditions of Participation for hospitals (CoPs) for shared spaces, services, personnel and emergency services. Please note prior subregulatory interpretations prohibited co-location of hospitals with other healthcare entities. This guidance changes that to ensure safety and accountability without being overly prescriptive. Hospitals can be co-located with other hospitals or other healthcare entities. These hospitals may be located on the same campus of or in the same building used by another hospital or healthcare facility.” Common examples of co-location instances include:

• One hospital entirely located on another hospital’s campus or in the same building as another hospital
• Part of one hospital’s inpatient services (e.g., at a remote location or satellite) is in another hospital’s building or on another hospital’s campus
• Outpatient department of one hospital is located on the same campus of or in the same building as another hospital or a separately Medicare-certified provider/supplier such as an ambulatory surgical center (ASC), rural health clinic (RHC), federally-qualified healthcare center (FQHC), an imaging center, etc.”

If the language above were to be finalized, ASCA anticipates that the sub-regulatory guidance for ASCs, found in State Operations Manual Appendix L, would most likely also be changed. It currently states:

“However, an ASC and a hospital or CAH outpatient surgery department, including a provider-based department that is either on or off the hospital’s or CAH’s main campus, may not share the same physical space, since the regulations at 42 CFR 413.65(d)(4) require that the provider-based department be held out to the public as a part of the main hospital, and that patients entering the provider-based facility are aware that they are entering the hospital.”

Please write Kara Newbury with any questions or feedback on this draft guidance.