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November 12, 2021

CMS Revises Co-Location Guidance Adding Flexibilities for Hospitals

The Centers for Medicare & Medicaid Services (CMS) has released long-awaited guidance increasing flexibility for hospitals to enter into co-location arrangements. Historically, CMS disapproved of co-location arrangements, contending that they rendered hospitals unable to independently satisfy the Medicare conditions of participation (COPs). More recently, CMS’ views have shifted, and the agency has indicated, including in draft guidance released in May 2019, that certain co-location arrangements are permissible. Whereas the 2019 draft guidance included numerous bright-line examples, the final 2021 guidance adopts broader principles that, while potentially more flexible, also increase uncertainty for providers (the guidance has been trimmed in half, from 8 to 4 pages). Providers and surveyors will need to assess how co-location arrangements impact each entity’s compliance with the Medicare CoPs “as a whole.”