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On November 12, 2021, the Centers for Medicare & Medicaid Services (CMS) issued finalized guidance (“Guidance”) clarifying that hospitals can share space, services, or personnel with another hospital or health care provider so long as they demonstrate independent compliance with the Medicare Conditions of Participation (CoPs). This Guidance, which finalizes the prior draft guidance issued on May 3, 2019, explains how CMS and state agency surveyors will evaluate a hospital’s space sharing or contracted staff arrangements when assessing the hospital’s compliance with the Medicare CoPs.  The Guidance took effect immediately upon publication on November 12, 2021.

As relayed by CMS, hospitals have increasingly co-located with other hospitals or other healthcare entities as they seek efficiencies and develop different delivery systems of care. Co-location occurs when two Medicare certified hospitals or a Medicare certified hospital and another healthcare entity are located on the same campus or in the same building and share space, staff, or services.