Accreditation Resource Services Newsletter
June 2020


Contract Services- Part Two

By: Traci Curtis
Welcome to the second in a four part blog series on CMS' expectations for managing contract services in a hospital. In this blog, we're going to discuss CMS' expectations for written agreements with contract services.
CMS' Conditions of Participation at ยง482.12(e)(1) require that your hospital's governing body "ensure that the services performed under a contract are provided in a safe and effective manner." The governing body has the responsibility for assuring that hospital services are provided in compliance with the Medicare Conditions of Participation and according to acceptable standards of practice, irrespective of whether the services are provided directly by hospital employees or indirectly by contract.
Indirect arrangements may take into consideration services provided through formal contracts, joint ventures, informal agreements, shared services or lease arrangements. The common thread is that the relationship between your hospital and the contract service needs to be defined in writing.
Here are some tips to assure that your written agreements with contract entities will be acceptable to both CMS and accrediting organizations:
  1. A written agreement can take any form. It can be anything from a formal contract to a simple memorandum of understanding. Technically, even an email between the two parties would be compliant. Regardless of the format; the important point is that the agreement must outline the responsibilities of the contract service, and the expectations your hospital has in terms of the quality of services provided.
  2. Any written agreement must be current. If an agreement - regardless of form - has expired, it is no longer considered to be compliant. Agreements that are "evergreen" in nature do not have an exposure. Otherwise, your hospital will need to establish a mechanism to track expiration dates for various contracts to assure they are renewed in a timely manner. One idea is to include "bridge language" into a time-limited contract that allows the contract to remain in full force and effect past the stated expiration date until a new contract can be secured.
  3. Corporate agreements that cover multiple hospitals must state the specific hospitals to which the agreement applies. Remember that CMS (and accrediting organizations) certify individual hospitals - not health systems. Regulators will want to see that written agreements specifically state they apply to the hospital being surveyed.
  4. Be sure the agreements - and any amendments thereto - are fully executed. You would be surprised how many times surveyors look at written agreements only signed by one of the two parties!
  5. Written agreements need to be provided to surveyors - if requested - at the time of survey. This is not usually a problem for agreements executed at the local (hospital) level. Often times however, corporate agreements are maintained only at the corporate office. If this is the case, you will need to establish a mechanism to get a copy of those agreements to your hospital in a timely manner.
Join me in a couple of weeks for Part Three of this blog series as we discuss CMS' expectations for monitoring the quality and safety of contract services.
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