In a November 12, 2021 revision of its prior draft guidelines for hospital co-location compliance with Medicare conditions of participation (COP) for hospitals (QSO-19-13), CMS has apparently softened its approach to co-location. The modified guidance is less prescriptive and appears more practical and supportive of co-location where appropriate. In July 2019, CNS issued draft QSO-19-13 that purported to ease its earlier flat prohibition on co-location that it had adopted through sub-regulatory guidance. Although the 2019 version of QSO-19-13 allowed the sharing of non-clinical spaces, CMS noted that “due to infection control, patient management, confidentiality, and other quality and safety concerns, the use of shared clinical space would be limited.” In the recent revision, CMS no longer includes the admonition against sharing clinical space and merely states, “when hospitals choose to co-locate, they should consider the risk of compliance through any shared space or shared services arrangements.” Further, the prior requirement that hospitals have “distinct” clinical space is replaced with an admonition that “hospitals have spaces of operation that meet the [COP],” considering, among others, the conditions regarding patient rights, infection prevention and control, governing body and the physical environment. The modified guidance seems to support co-location where each provider can separately establish that it meets the COP applicable to it, and as such is an important liberalization at a time when hospitals are desperate for operational efficiencies.

Photo of Edward S. Kornreich Edward S. Kornreich

Past long-standing chair of Proskauer’s Health Care Department, Ed Kornreich is a recognized authority on the legal, regulatory and business issues related to health care services.

Ed works primarily on health care transactions, regulatory compliance, health care payment and governance issues for varied…

Past long-standing chair of Proskauer’s Health Care Department, Ed Kornreich is a recognized authority on the legal, regulatory and business issues related to health care services.

Ed works primarily on health care transactions, regulatory compliance, health care payment and governance issues for varied providers (both for-profit and not-for-profit), vendors, GPOs, distributors and entrepreneurs. His approach combines sensitivity to meeting regulatory business goals with a comprehensive and realistic assessment of the health care environment, and he is particularly experienced in dealing with the complex issues related to integrated health care systems.

After working for the Legal Aid Society, Ed entered private practice, where he helped represent a major public hospital corporation in a series of reimbursement disputes with the state and federal governments, and counseled New York area hospitals and nursing homes on reimbursement and operational issues. Thereafter, Ed served as General Counsel of St. Luke’s-Roosevelt Hospital Center, one of the largest teaching hospitals in New York. After leaving St. Luke’s-Roosevelt Hospital Center, Ed joined Proskauer as a Partner in 1990.

Ed frequently writes and lectures on Medicare and Medicaid reimbursement, health care integration, not-for-profit law and corporate governance issues, and the application of federal and state anti-kickback and “Stark” laws to health care transactions.