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Update on CMS Co-Location Guidance

on Wednesday, 3 July 2019 in Health Law Advisory: Zachary J. Buxton, Editor

CMS released draft guidance regarding requirements under the Conditions of Participation (“COPs”) for hospitals co-located with other hospitals and health care providers. The draft guidance was issued by the Director of the CMS Quality, Safety and Oversight Group on May 3, 2019, and is available here. CMS requested comments regarding the guidance by July 2, 2019, and we anticipate a large number of comments were submitted.

One of the areas that did not make it into the draft guidance but which providers have been requesting formal guidance on for several years is the sharing or leasing of space within a hospital to physician entities, including for specialty clinics. In a recent presentation on the draft guidance for the American Health Lawyers Association, CMS officials seemed to indicate that timeshares and leases of hospital space would not pose issues for CMS, as long as the hospital maintained responsibility for the space as necessary for it to comply with the COPs. Hopefully, CMS’s position on this issue will be clearly addressed in the final guidance, so that providers have a clear statement of CMS’s position. CMS has cautioned, however, that its guidance relates only to compliance with the COPs, and that requirements in other areas of CMS must still be followed.

While it is unclear how long CMS will take to review comments and issue final guidance, its approach of requesting input from providers has been a welcome one.

Kimberly A. Lammers

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500