Revised Condition Of Participation For Hospital Governance Permits Single Governing Body For Multiple Hospitals

Hospital and health care systems should note that the Centers for Medicare and Medicaid Services has finalized the proposed provision that would permit a multi-hospital system to have a single governing body. The final rule also proposed to augment the proposed rule through the addition of a requirement that a hospital/health system governing body include at least one member of the hospital's medical staff (or a medical staff member of one hospital, if for a health system).

In a final rule published May 16, 2012, the Centers for Medicare and Medicaid Services (CMS) finalized the proposed provision that would permit a multi-hospital system to have a single governing body. In addition, the final rule proposed to augment the proposed rule through the addition of a requirement that a hospital/health system governing body include at least one member of the hospital's medical staff (or a medical staff member of one hospital, if for a health system).

In the preamble to the final rule, CMS explained that the changes related to the governing body are intended to provide hospital systems with increased flexibility to determine the appropriate governing structure for their systems. Under CMS rules, a health care system may choose to continue to operate under separate governing bodies for each component hospital, or to create a structure that has a single governing body with oversight for multiple facilities within the system. Note that the CMS rule does not preempt any state or local laws/regulations or other rules that may presume or require that each facility have a separate governing body.

Regarding the proposed requirement that a medical staff member serve on the governing body, CMS expressed the belief that having such an individual serve on the governing body would "build an important element of continuity and ensure regular communication between a hospital's governing body and its medical staff(s) . . . ." CMS also clarified that in the case of multi-hospital systems with a single governing body, CMS would not require that the...

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