HAP Resource Center

Comment Letter: CMS, Proposed Guidance for Hospital Co-Location

July 2, 2019

Ms. Seema Verma Administrator
Centers for Medicare & Medicaid Services Hubert H. Humphrey Building
200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201

RE: QSO–19–13 Hospital—DRAFT ONLY—Guidance for Hospital Co-Location with Other Hospitals or Health Care Facilities (May 3, 2019)

Dear Ms. Verma:

On behalf of 240 member hospitals, health systems and other health care organizations, The Hospital and Healthsystem Association of Pennsylvania (HAP) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) proposed guidance for hospital co-location with other hospitals or health care facilities.

During September 2016, our state agency, the Pennsylvania Department of Health, posted a policy guidance alerting hospitals to CMS Region 3’s interpretation of a Medicare Conditions of Participation and provider-based rule as precluding hospitals from ”sharing space” with an entity or facility that is not part of the hospital. State agency leadership communicated (via message board posts and PowerPoint presentations) that if surveyors identify co-location (i.e. shared entryways, interior hallways, bathroom facilities, treatment rooms, waiting rooms, registration areas or subleasing arrangements) during licensure, compliant, or federal validation surveys, the state agency would deny state licensure (in the case of an initial occupancy survey) or cite the currently licensed facility as violating state governance requirements pertaining to the adherence to all applicable federal level rules.

This strict interpretation of federal requirements caused confusion across the state—creating a climate of uncertainty and crippling Pennsylvania’s hospital community’s efforts to deliver more efficient and cost-effective care. Pennsylvania hospitals are investing in new care models and introducing new patient-centered service offerings. Hospitals are co-locating services with other health care providers in order to offer a comprehensive range of medical services and better meet patient needs. HAP and Pennsylvania’s hospital community have been anxiously awaiting definitive guidance about this pressing topic as the state agencies’ current, overly prescriptive interpretation of federal “co-location” rules threaten patient access and subvert broader goals to provide more coordinated, cost-effective and patient-centered care.

HAP appreciates CMS’ work to articulate the guidance by which hospitals can co-locate with other hospitals or health care facilities. We appreciate CMS’ acknowledgment that hospitals are increasingly co-locating with other hospitals or other health care entities in order to seek efficiencies and expand care delivery systems.

This draft guidance represents an important clarification that, under current Medicare Conditions of Participation (CoP), hospitals may co-locate (in their entirety; or only certain parts of the hospital-outpatient departments, remote, or satellite locations) with other health care entities. We commend CMS for seeking to clarify and standardize how CMS and state agency surveyors evaluate a hospital’s sharing of space, staff, and services when assessing the hospital’s compliance with the CoPs.

Furthermore, we appreciate that CMS is soliciting feedback to ensure that the agency is fully aware of how the guidance will impact hospitals. HAP welcomes the opportunity to engage with CMS in shaping final guidance and hope that this public comment process helps to expedite implementation. That said, we urge CMS to consider a series of revisions to account for current care delivery needs and improve care coordination.

  • Distinct vs Shared Space—The draft guidance clarified that, under the current CoPs, hospitals may co-locate with other hospitals or health care entities provided that all co-located hospitals demonstrate separate and independent compliance with the hospital CoPs. The draft guidance permits the sharing of public paths of travel such as entrances, lobbies, public corridors, and waiting rooms. The guidance precludes the use of shared clinical spaces—non-public space where clinical care occurs. In addition, the guidance clarifies that travel through the clinical space of one co-located entity to reach the other co-located entity is impermissible due to infection control, patient management, confidentiality, and other quality and safety concerns.

​HAP members expressed concern with the proposed prohibition on travel through clinical space and offer numerous examples of how travel through clinical space could improve patient experience and care coordination without jeopardizing quality, safety, or patient confidentiality. Take for example, a hospital planning to co-locate with an adjacent urgent care center. Constructing a doorway to transfer patients in need for more emergent care directly from the urgent care to the hospital’s emergency department would relieve patients of the unnecessary burden of leaving the urgent care center and walking outside to access the emergency department. There are times when a non-public path of travel could ensure patient safety, improve patient satisfaction and increase the quality of care.

  • Shared Staff—In the draft guidance, CMS clarifies that sharing staff is permissible through a contractual arrangement where there are clear lines of authority and accountability. However, contracted staff must be assigned to work solely for one entity during any given shift; staff may not “float” back and forth between entities or perform services simultaneously for two co- located entities.

While the guidance provides necessary clarification and additional flexibility to staff co-located health care entities efficiently, HAP members have raised concerns with the potential impact of the proposed provisions—namely, the prohibition of nursing, pharmacy, and laboratory directors from “floating” between co-located entities and the prohibition of other certain (“on-demand”) staff from floating between entities during a single shift. In certain circumstance, these provisions could increase cost and administrative burden without directly impacting and improving the quality of patient care. The ability for one director to serve both entities at the same time, when appropriate, is likely in the best interest of the patient and may lead to better continuity of care and care coordination.

It also is conceivable that staff who are not responsible for continuous patient care of a specific patient and instead provide “on demand services” for whichever patient needs that services (for example, phlebotomists, laboratory technicians or physical therapists) could effectively meet patient needs at two co-located entities during the same shift. We encourage CMS to narrow its non-float provision in order to give co-located hospitals the flexibility necessary to deliver efficient, coordinated care.

  • Emergency Code Teams—The draft guidance proposes that hospitals may contract with another entity for the appraisal and initial treatment of patients experiencing an emergency. The proposed draft prohibits contracted staffs from working simultaneously at another facility. HAP members are concerned that the draft requires co-located entities to each maintain a dedicated code team. We encourage CMS to allow for shared code team allocated between the main hospital and the co-located hospital, provided the entities have a policy in place to respond to simultaneous emergent situations. As much as code teams respond to emergent situations, not routine encounters, the likelihood of simultaneous situation is unlikely. The draft as currently written could increase cost without increasing patient safety.
  • Contracted Services—The draft guidance specifies that a hospital is responsible for providing all of its services in compliance with the hospital CoPs regardless of whether it contracts for services. Services that may be provided under contract or arrangement with another co- located hospital or entity are laboratory, pharmacy, dietary, food preparation and delivery, housekeeping, maintenance, security, and utilities. HAP members welcome this clarification. HAP members also would appreciate further clarification about how this guidance intersects with existing provider-based payment rules as they relate to contracted services.

Implementation Concerns and Next Steps

Given the Pennsylvania hospital community’s past experience with inconsistent interpretation and application of guidance, HAP encourages CMS to take all steps necessary to standardize implementation across survey regions. For this effort, and all future implementation efforts, HAP recommends that CMS:

  • Ensure that interpretive guidance is updated on a regular basis and encourage stakeholder engagement and review prior to release
  • Where possible, clarify definitions of key concepts (such as shift and reception area) and explicitly state that exemplary lists are inclusive, not exclusive
  • Clarify the Medicare Quality and Safety Oversight program organization, management, and structure, and ensure closer oversight of survey contractors
  • Increase training and retraining of surveyors to promote consistent application of standards

In sizing the implementation effort here in Pennsylvania, HAP urges CMS to allow sufficient time for implementation. Given our experience with inconsistent interpretation, Pennsylvania hospitals currently operate a wide range of co-location arrangements—some that are completely compliant with the proposed guidance, some that will require considerable time to bring into compliance and some, for which compliance will be cost-prohibitive, that will need time to wind down and relocate services.

HAP asks that CMS considers the diversity of the landscape and articulates an enforcement approach that includes one or more of the following:

  • Provide, at a minimum, a one-year education and non-enforcement period after the release of final guidance to give hospitals time to bring current inventory into compliance
  • Establish an extension request process, similar to that developed for addressing ligature risk, to allow discretion to provide hospitals with additional time to complete corrective actions and mitigate delays caused by competitive bidding, securing capital, hiring staff, and restructuring contracts
  • Establish a grandfather clause or waiver for those co-location projects that guard patient access to essential services but fail to compliment with interpretative guidance. We ask that CMS offer latitude to consider upon a case-by-case basis whether a co-location arrangement promotes broader agency aims

Again, we thank CMS for the opportunity to comment about this important guidance. We look forward to collaborating with CMS to continue to update federal regulations to address changing delivery needs. Thank for your consideration of HAP’s commitment towards this proposed guidance. Should you have questions please feel free to call me at (215) 575-3741.


Jennifer Jordan,
Vice President, Regulatory Advocacy



Topics: Federal Advocacy, Medicare, Regulatory Advocacy

Revision Date: 7/2/2019

Return to Previous Page

Expired Documents