CMS Final Guidance Co-Located Hospitals- Are you ready?

CMS Final Guidance

CMS (the Centers for Medicare and Medicaid Services) provided final guidance for the long-awaited regulations related to co-located hospitals.  Regulations that would govern how co-located hospitals interacted with each other were originally proposed in QSO-19-13-Hospital by CMS on May 3, 2019.  The original publication raised many questions from providers and encouraged CMS to reconsider many of the requirements that were contained within the original draft guidance. The consulting team at Courtemanche & Associates has been following these regulations since 2019 and are pleased to provide you with the latest information. After reading this article, should you have questions, do not hesitate to reach out to our team at Courtemanche & Associates.

Why the regulatory changes?

The document released on November 12, 2021, confirms that hospitals can be co-located with other hospitals or healthcare providers. In keeping with its mission of Better Care, Healthier People and Smarter Spending, this latest rewrite provides greater flexibility, from the original draft regulations to organizations while allowing CMS to keep its commitment to strive for the highest quality of care possible. Co-location of hospitals has existed within the healthcare arena for over 25 years with the most common relationship being between acute care hospital and children’s hospitals. The changes also remind hospital leadership, that it is their responsibility to ensure their organization is independently, in full compliance with the Conditions of Participation and then during their hospital survey, will be able to demonstrate that full compliance.

What do the CMS final guidance regulations require?

The latest QSO document from CMS provides direction to state survey agencies on how to evaluate a hospital’s compliance with the CMS Hospital Conditions of Participation, commonly referred to as the “COPs” when more than one hospital exists within the same physical space. CMS specifically defines this as “located on the same campus or in the same building used by another hospital or healthcare facility. With the following appearing as examples: “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”.   The overarching expectation through the guidance is that each hospital entity, meaning each holder of a CMS CCN number must always be able to substantiate its own compliance with the Hospital Conditions of Participation. It is within this statement and the rewording of the other requirements where the flexibility exists for organizations. Contrary to the original version of QSO-19-13-Hospital, the revised guidance no longer restricts the collaboration or coordination of services between the co-located entities, but clearly states that each entity must ensure its own compliance with the COPs.

Where will the CMS final guidance focus for compliance be?

The guidance focuses on three key areas.

  1. Physical Space: In looking at the physical space guidance provided, CMS reiterates that both the hospital and the co-located healthcare provider must be able to demonstrate their compliance to protect and provide a safe environment for their patients, including but not limited to, their right to personal privacy and to receive care in a safe environment, and right to confidentiality of patient records. Organizations must keep in mind the type of co-located healthcare providers that are sharing space. For instance, a children’s hospital that is co-located in an acute care hospital and shares the same hallway and waiting room must ensure that the shared space provides a safe environment for pediatric and adult patients.
  2. Staffing: While the original guidance contained very strict requirements, the revision provides flexibility and sets forth the expectation that shared staff are managed in the same manner as other contracted staff and places the ownness on the individual entity to ensure that it has the appropriate resources as required by the Conditions of Participation. For instance, 482.28(a)(1) states, the hospital must have a full-time employee who– (1) Serves as director of the food and dietetic services; (2) Is responsible for daily management of the dietary services.  Many co-located organizations may share this resource, but how would each individual entity be able to substantiate compliance with the requirement to have a full-time employee who fulfills the defined responsibilities. Keep in mind other services that may be shared such as housekeeping, security, maintenance, and laboratory services. Ensure that a written agreement exists between the two entities, and they are managed in a manner that ensure compliance with your contracted services policy and procedure. Remember, that contracted staff must have orientation to each organization they are working within and compliance with all HR requirements must be substantiated by each organization.
  3. Emergency Services: Each entity must have policies and procedures that define how they will address potential emergency scenarios typical of the patient population they serve. Each entity then must ensure that its staffing would enable them to provide safe and adequate initial treatment of an emergency. Consider your Rapid Response Team Policy, does your team support both entities and is that appropriate? For instance, what are the requirements for emergency intubations and do both healthcare entities rely on the same resource to fulfil this obligation? Do you have one “Code Team” that covers the entire campus? If yes, you should re-evaluate your processes to ensure compliance.

Some organizations have expressed concerns over the absence of some of the original prescriptive content contained in the original QSO-19-13-Hospital document. Others believe, the absence of the prescriptive content will require a more coordinated relationship between entities and a deeper consideration of the requirements that must be met on behalf of each entity, by each entity to substantiate compliance with various Conditions of Participation or Conditions for Coverage. A relationship that historically was a real-estate transaction will now encourage these co-located entities to further collaborate, coordinate and innovate.

CMS final guidance compliance - What do I need to do?

Co-Located hospitals need to work together to ensure that the regulatory needs of each institution are met through the combined efforts of both organizations.

  • Begin with your own internal gap analysis. If you are not certain how to do that, click CMS Compliance for how we can help.
  • Once the gap analysis is completed, meet with the co-located organizations leadership team, and identify your needs and why they are important or essential to your organization.
  • Establish a communication schedule and hierarchy to ensure full transparency and timely receipt of necessary documents. Consider inviting various counterparts to participate in key sections of various meetings.
  • Last but not least, engage in shared experiences such as walk-rounds, environmental /safety rounds and/or tracer activities.

Remember, our team is always here to support you. Better Compliance…. Better Care.

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