AIS Newsletter Details CMS’s Requirements for Provider-Based Entities, Warns of Risks of Sharing Space

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CMS has very specific requirements for provider-based entities, as the May 19 issue of Atlantic Information Services’s Report on Medicare Compliance explains.

Anxiety about compliance with CMS requirements for provider-based entities is running high, as hospitals face audits and the future of the supplemental reimbursement hangs in the balance. And some hospitals share provider-based space with a separate freestanding clinic that does not have the special CMS designation, which can be very risky, as the May 19 issue of Atlantic Information Services’s, Inc.’s Report on Medicare Compliance (RMC) explains.

Provider-based status is available for hospital-owned entities that are located outside the hospital’s four walls, but very specific CMS requirements must be met. The benefit of declaring provider-based status is financial; hospitals collect both a facility fee and a professional fee for services. While CMS doesn’t grant provider-based status in advance, hospitals can submit attestations of their compliance to CMS. They may be audited at any time, whether or not they self-attest, with recoupment a possibility if the provider-based entities are out of compliance in any way.

“It is easy to fall out of compliance because it is fairly technical,” said Debi Weatherford, executive director of internal audit at Piedmont Healthcare, a health system in Atlanta. “If CMS comes to audit, the chance of losing provider-based status is pretty high.”

One CMS regional office, for example, recovered a hospital’s Medicare payments for provider-based services back to the date it had attested its compliance with provider-based status, according to a letter obtained by RMC. A major reason for the recoupment was the hospital’s use of shared space. “A facility that shares space with a freestanding facility cannot have provider-based status as a department of a hospital,” the regional office says. Its reasons can be summed up as the whole being greater than the sum of its parts.

Visit to read the article in its entirety, which includes considerations for hospitals whose provider-based entities are part of the 340B drug discount program.

About Report on Medicare Compliance
The industry's #1 source of timely news and proven strategies on Medicare compliance, Stark and other big-dollar issues of concern to health care compliance officers, the award-winning Report on Medicare Compliance identifies and provides valuable guidance on dozens of high-risk billing and documentation problems and foreshadows the next moves of federal enforcers and their armies of RAC, ZPIC and MAC auditors. “The best information there is for hospital compliance officers,” the 8-page weekly newsletter includes insights and strategies not available anywhere else.

Since 1992, Report on Medicare Compliance has been written by Nina Youngstrom, who has a reputation for being one of the most knowledgeable journalists and incisive writers in the field. With excellent contacts at the IG's office and at CMS, and strong relationships among industry experts and compliance officers, each issue of Report on Medicare Compliance contains exclusive, inside news. Visit for more information.

About AIS
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at

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Jill Brown, Executive Editor
Atlantic Information Services
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