BY Elizabeth Jepson and Allison Shelton
On May 3, 2019, the Centers for Medicare and Medicaid Services (CMS) released draft guidance for hospitals and other healthcare providers addressing co-location. This guidance is CMS’ first formal policy on co-location and provides insight into how CMS will evaluate co-locating providers’ compliance with Medicare’s conditions of participation (“CoPs”).
Co-location refers to the sharing of space, staff, and services between separate entities, such as two hospitals or a health care provider that leases space from a hospital. Past regulatory agency guidance took a very restrictive view on co-location issues, but under this draft guidance, CMS explicitly allows co-location and defines how co-located space, staff, and services can be used and shared.
The guidance draws a sharp distinction between acceptable space sharing and unacceptable space sharing by creating a division between clinical and non-clinical spaces. If adopted, CMS’ guidance will broaden the extent to which co-located facilities can share non-clinical space, common areas, and public paths of travel, such as waiting rooms, restrooms, elevators, and hallways through non-clinical areas. On the other hand, CMS will continue to prohibit sharing of clinical space, which is defined as any non-public space where the primary purpose is patient care, such as nursing units, outpatient clinics, emergency departments, operating rooms, and post-anesthesia care units.
CMS requires providers to maintain complete control over their clinical space at all times to demonstrate compliance with CoPs, including those CoPs related to infection control, patient management, privacy, and confidentiality. If this draft guidance is finalized, co-located providers will each be individually responsible to ensure that all non-clinical, shared space is in compliance with applicable CoPs, as well as all clinical space under the provider’s direct control.
CMS’ draft guidance states that surveyors are to review floor plans with focus on the delineation between the co-located entities’ areas of operation. The floor plans should be easily interpreted—a surveyor should be able to review and clearly tell which spaces are shared and which are dedicated to each provider. In anticipation of the issuance of final guidance, co-located providers should start collecting and maintaining floor plans that clearly distinguish hospital space, the co-located entity’s space, and the allowable shared space.
A co-located hospital is required to independently meet all requirements of the CoPs, including those related to staffing and services. The draft guidance allows for services to be provided under contract between co-located entities. However, if the draft guidance is adopted, CMS will continue to enforce a restrictive view on sharing of staff—staff must be dedicated to one provider during a shift and cannot “float” between co-located providers during a single shift. Nothing in the guidance will prohibit staff from working for both co-located providers, as long as that work is distinguished and is scheduled for different shifts. Note that this restriction will not apply to members of medical staff, as medical staff members are not considered part of a hospital’s workforce. Provided such physicians and other allied health professionals are appropriately credentialed at the co-located providers, they may float between the two providers during the same shift.
If the hospital contracts for staffing from a co-located provider, compliance with the CoPs will require that the governing body ensures that the staffing contract or agreement clearly defines management control or oversight over said staff. Under the draft guidance, surveyors are instructed to evaluate the compliance with CoPs by reviewing documentation, including the following: (1) documentation regarding the incorporation of contracted services into the hospital’s quality assurance and performance improvement program, including monitoring and evaluation of contracted services for compliance, (2) staffing contracts, (3) staffing schedules demonstrating that staffers are immediately available when scheduled and are not shared with another hospital or healthcare entity during a shift, and (4) personnel files documenting appropriate training for contracted staff.
If, following adoption of final guidance, a survey identifies deficiencies with a co-located provider, the surveyor may be required to file a complaint regarding the other provider and seek authorization to immediately conduct a survey of the other provider. For example, under the draft guidance, if during a survey of a hospital, the surveyor identifies a deficiency in the contracted services provided by the co-located provider to the hospital, the surveyor will not only cite the hospital for violations of the CoPs but also file a complaint regarding the co-located provider’s services. Additionally, the surveyor may conduct or request a separate survey of the co-located provider to address the deficiencies identified in the services that the co-located provider furnished to the hospital.
If this draft guidance is finalized, providers will have increased flexibility to co-locate and clear standards on what is and is not permissible with respect to CoPs. All healthcare entities should watch for the issuance of final guidance from CMS, but should remember that accreditation and licensing issues must also be considered when providers co-locate. Co-located providers are advised to review and revise policies and procedures, floor plans, and other documentation that may be requested during a survey to ensure compliance.