WHA Comments on CMS Draft Co-location Guidance

Disappointed in lack of guidance for CAHs

July 09, 2019

On July 2, WHA submitted comments regarding draft guidance the Centers for Medicare & Medicaid Services (CMS) has proposed to clarify co-location arrangements between hospitals and other health care entities.

While WHA offered its appreciation for CMS taking a step in the right direction by proposing new clarification on how CMS views these arrangements, WHA expressed concern and disappointment that the draft guidance appears to not address key critical access hospital (CAH) co-location issues involving visiting specialists.

In 2016, WHA convened meetings with our local members and regional CMS representatives to address concerns about CMS taking action to revoke the provider-based status of a critical access hospital’s clinic operations solely because the hospital had a space leasing agreement with visiting specialists. Those concerns were raised in meetings with CMS, as well as in a letter from Wisconsin’s Congressional Delegation to CMS spearheaded by WHA.

Based on discussions and CMS’ intent to provide new clarification, it appeared this announced draft guidance would resolve these concerns; however, the memo appears to be silent on these types of arrangements.

Further, since the draft guidance memo was released, CMS has subsequently stated it does not intend for this memo to be applied to critical access hospitals because CAHs cannot co-locate with other hospitals due to the 35-mile requirement. WHA wrote in its comment letter that the non-applicability of the guidance to critical access hospitals misunderstands the question posed by CAHs:

“Is a CAH’s [provider-based] status at risk because it enters into an agreement with a visiting physician or other health care professional—not another hospital or facility—to temporarily utilize the hospital’s provider-based clinic space when such physician or other health care professional will independently bill Medicare for services provided as non-hospital-based services? Such an arrangement would actually result in a lower cost to Medicare, yet our members have heard that CMS has revoked provider-based status of critical access hospital clinic operations solely because the hospital had a space leasing agreement with visiting providers.”

WHA urged CMS to work quickly to correct this lack of clarity as part of CMS’ efforts to remove regulatory uncertainty and provide flexibility in hospital partnerships with other providers.

Despite this missed opportunity, other parts of the memo do appear to be a step in the right direction. WHA offered support for CMS’ proposal to allow hospitals to share certain nonclinical spaces, such as waiting rooms or hallways. It also commented in support of allowing physicians to float between two entities, when appropriate.

However, WHA urged CMS to provide further flexibility by allowing certain clinical spaces to be shared in circumstances where infection control could be coordinated and patient privacy could remain protected. It also recommended clarifying that advanced practice providers should be able to float between two entities, and that certain managerial staff such as nurse manager and pharmacy or lab directors be allowed to float as well.

For more information, contact WHA Director of Federal and State Relations Jon Hoelter or WHA General Counsel Matthew Stanford.

This story originally appeared in the July 09, 2019 edition of WHA Newsletter