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CMS Releases Guidance on Shared Space Arrangements

Doctors and Patients TalkingLast year, the Centers for Medicare and Medicaid Services (“CMS”) issued long-anticipated draft guidance concerning shared space and co-location arrangements between hospitals and other providers. The guidance is meant to clarify 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 Conditions of Participation (CoPs).

Summary of Draft Guidance

Hospitals co-locate with other hospitals or health care entities to achieve efficiencies and develop different delivery systems of care. Co-location occurs where two hospitals or a hospital and another health care entity are located on the same campus or in the same building and share space, staff, or services.

In the guidance, CMS makes clear that hospitals are permitted to co-locate with other hospitals or health care entities. However, it clarifies that all co-located hospitals “must demonstrate separate and independent compliance with the hospital CoPs.” Further, CMS explains that any noncompliance that is identified in one entity’s space may be deemed to be noncompliance for the co-located party.

Distinct Space and Shared Space

The draft guidance distinguishes between “distinct” and “shared” spaces, and emphasizes that distinct clinical space—which cannot be shared with another provider—is necessary to protect patients’ rights and privacy. Shared public spaces are permissible so long as both entities are individually responsible for compliance with the CoPs in those spaces. Examples of permissible “shared space” set forth in the guidance include:

  • Public lobbies, waiting rooms, or reception areas (provided there are separate patient “check-in” areas and clear signage);
  • Public restrooms;
  • Staff lounges;
  • Elevators;
  • Main building entrances; and
  • Public corridors through non-clinical areas.

The guidance further states that travel between separate entities utilizing a path through clinical spaces of a hospital by another entity co-located in the same building would not be acceptable, as it could create patient privacy, security, and infection control concerns. According to CMS, examples of such unacceptable non-public paths of travel include a hallway, corridor, or path of travel through an inpatient nursing unit, or a hallway, corridor, or path of travel through a clinical hospital department.

Finally, the guidance instructs state surveyors to request floor plans that identify which hospital(s) use what spaces in order to distinguish between “distinct” and “shared” spaces. To the extent that both providers use a shared space, then any noncompliance found within the shared space can be considered noncompliance for both entities.

Shared Staff and Services Arrangements

The CMS guidance clarifies that co-located entities may share certain contracted services, such as laboratory, dietary, pharmacy, maintenance, housekeeping, security services, food preparation and delivery services. In addition, co-located entities may share utilities such as fire detection and suppression, medical gases, suction, compressed air, and alarm systems such as oxygen alarms.

While hospitals and other co-located hospitals or health care entities may share staff members that are under contract, the guidance provides that staff may not simultaneously serve two entities. For example, staff must work for one entity during a shift, and cannot "float" between two entities during the same shift. Shared staffing provided under contract should ensure adequate oversight, training and education, and accountability of the contracted staff. The guidance also indicates that medical staff approved by both governing bodies, and appropriately credentialed and privileged by each entity, may “float” between the co-located hospitals.

Emergency Services

The guidance also addresses CMS’ requirements for emergency care policies and procedures for hospitals without emergency departments, clarifying that these policies and procedures should do the following: (1) identify when a patient is in distress, (2) explain how to initiate an emergency response, (3) clarify how to initiate treatment, and (4) recognize when the patient must be transferred to another facility to receive appropriate treatment. Policies and procedures must be tailored to the types of scenarios typical of a hospital’s patient population.

CMS would allow a hospital to contract for emergency services with a co-located hospital or entity so long as the contracted staff members are not working simultaneously at another health care provider while on call for the hospital’s emergency services. However, a hospital without an emergency department would not generally be permitted to have another co-located hospital respond to its emergencies by evaluating patients and providing initial emergency treatment. The guidance does acknowledge that transfer from a hospital, such as an inpatient rehabilitation hospital, to a co-located hospital may be appropriate if the hospital cannot provide care beyond initial emergency treatment. CMS notes that hospitals without emergency departments that contract for emergency services from a co-located hospital must meet Emergency Medical Treatment and Labor Act (EMTALA) requirements.

Public Comments

Public comments regarding the draft rules were due on July 2, 2019. The American Hospital Association ("AHA") submitted a comment that proposed revisions to the draft rules, and sought clarification regarding certain key provisions. For example, the AHA requested that CMS remove or revise the language that prohibits hospital staff from "floating" between co-located hospitals during a shift.

Specifically, the AHA Letter requests that CMS distinguish between (1) staff members who have specific responsibility for the continuous care of a defined group of patients in a specific unit (such as nurses assigned to a specific inpatient unit); and (2) other staff members who are not assigned to a specific unit, but provide specialized services to patients throughout the hospital (such as laboratory technicians and MRI technicians). The AHA letter urges CMS to permit contracts between co-located facilities to allow the latter group to float between co-located facilities on an as-needed basis in order to promote efficiency and care coordination.


If you have any questions about shared space arrangements, please contact Jennifer Van Regenmorter at (616) 796-2502 or Julie Hamlet at (616) 796-2515.

Categories: Compliance, Health Care Reform, Hospitals, Medicare/Medicaid

 has particular expertise in health law and she represents providers with emphasis in the areas of physicians, hospice, home care and long term care, including one of the country’s largest long-term care organizations. She has a vast array of experience in teaming with providers in the areas of regulatory compliance and contracts. 

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