Provider-based status is the Medicare relationship between a main provider and a department, remote location or satellite facility that complies with 42 CFR 413.65. From January 1, 2028, a federal statute conditions Medicare payment under the OPPS for an off-campus outpatient department on the department billing under its own NPI and the main provider having submitted the required attestations. Integral Healthcare Solutions (IHS) builds the criteria checklist, policy set, evidence file and calendar that a hospital needs to prepare for it.
Last reviewed: November 6, 2026. Government pages opened November 6, 2026. CMS's final rule, CMS-1850-FC, was published in the Federal Register on November 6, 2026 (91 FR 70284) and takes effect January 1, 2027. We read the published rule.
What is provider-based status?
It is the relationship between a main provider and a department of a provider, remote location of a hospital or satellite facility that complies with 42 CFR 413.65. Section 413.65(b)(1) says a facility "is not entitled to be treated as provider-based simply because it or the main provider believe it is provider-based."
The section defines a department of a provider as "a facility or organization that is either created by, or acquired by, a main provider for the purpose of furnishing health care services of the same type as those furnished by the main provider under the name, ownership, and financial and administrative control of the main provider, in accordance with the provisions of this section." It defines the campus as "the physical area immediately adjacent to the provider's main buildings, other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings, and any other areas determined on an individual case basis, by the CMS regional office, to be part of the provider's campus" (413.65(a)(2)).
What do the criteria require?
Every facility must meet paragraph (d): licensure under the same license as the main provider (except where the State requires a separate license or does not permit a single license), integrated clinical services, financial integration, public awareness, and, for a hospital department, the obligations in paragraph (g). An off-campus facility must also meet paragraph (e): 100 percent ownership by the main provider, the same governing body, supervision and administration like any other department, and a location test. The location test can be met by a location within a 35-mile radius of the hospital campus, by a 75 percent patient-population test over 12 months, or by the special cases the paragraph lists. In every case the facility and main provider must be in the same State or, when consistent with the laws of both States, adjacent States (413.65(e)(3)).
What changed on January 1, 2028?
Section 6225 of the Consolidated Appropriations Act, 2026 (Public Law 119-75, enacted February 3, 2026) added paragraph (23) to section 1833(t) of the Social Security Act. CMS-1850-FC describes it this way: no payment may be made under the OPPS (or an applicable payment system under section 1833(t)(21)) "for items and services furnished on or after January 1, 2028, by an off-campus outpatient department of a provider unless that department has obtained, and the items and services are billed under, an NPI that is separate from the NPI of the main provider; the main provider has submitted to the Secretary, during the 2-year period ending on the date such items and services are furnished, an initial provider-based status attestation that the off-campus outpatient department is compliant with the requirements described in section § 413.65 (or a successor regulation); and the main provider has submitted a subsequent attestation within the timeframe specified by the Secretary." The payment condition is statute; the final rule sets the steps for meeting it.
What did CMS finalize for the process?
In CMS-1850-FC, CMS codified the statute at new 42 CFR 419.23 and added 413.65(b)(6). As of January 1, 2028, a provider must submit an initial attestation for each off-campus outpatient department within the 2-year period before it furnishes services, and a subsequent attestation within a period not to exceed 5 years thereafter. The preamble says departments providing services on or before January 1, 2028 must submit initial attestations between January 1, 2026 and December 31, 2027, and that a timely attestation counts even if CMS has not yet made a determination (419.23(c)).
Before attesting, the main provider must obtain an NPI for each provider-based department and update its enrollment record, currently PECOS. For this purpose a department is all hospital operations at one physical address listed in PECOS. CMS adopted a standardized form and a centralized electronic system to replace the MAC-specific templates, with operating instructions to come in subregulatory guidance; until both are finalized, providers may keep using the current process, including existing 413.65(b)(3). Effective January 1, 2027, the new off-campus definition and revised 413.65(e) exclude departments within 250 yards of a remote location of a hospital. Section 413.65(b)(6) does not apply to Critical Access Hospitals or to the entities in 413.65(m) and (n).
Who needs it and what triggers it
- A hospital that acquires or opens an off-campus clinic and plans to bill it as a hospital department.
- A hospital with existing off-campus departments that must file initial attestations by December 31, 2027, even those CMS already found provider-based, and have each NPI in place for services furnished on or after January 1, 2028.
- A hospital with a department treated as provider-based that was never checked against paragraphs (d) and (e).
If a provider treats a facility as provider-based without requesting a determination and CMS finds the requirements were not met, 413.65(j)(1)(ii) provides for recovering the difference between what was paid and what CMS estimates should have been paid, for cost reporting periods subject to reopening, subject to the exceptions in (b)(2), (b)(5) and (j)(2). The HHS Office of Inspector General found in report OEI-04-12-00380 (June 2016) that half of hospitals owned at least one provider-based facility. The report dates from 2016.
How IHS helps
IHS has three practice lines: accreditation consulting, compliance services and program development. This work is compliance services. Thomas G. Goddard, JD, PhD, who founded IHS in 2002 and served as URAC's Chief Operating Officer and General Counsel, leads it.
- A department inventory: each site, created or acquired, and its position against the campus definition.
- A criteria checklist built from 413.65(d), (e), (g) and (h), with the evidence that supports each line.
- Operating policies for each department, including the written notice before services that 413.65(g)(7) requires when a beneficiary is treated in a department off the main campus, the treatment is not required by the antidumping rules in 489.24, and the beneficiary will owe coinsurance for both the outpatient visit and the physician service.
- An evidence file with a dated record behind each criterion.
- A calendar of NPI, PECOS and attestation steps, updated as CMS issues guidance.
What you supply: leaders and reimbursement staff who make the status determinations; counsel; licensure, ownership, bylaws, ledger and cost report records; and the NPI and PECOS updates.
The real limit: IHS does not decide status, does not sign or file attestations, and does not communicate with CMS or a MAC. Your hospital does. Counsel and your reimbursement staff decide whether a department qualifies.
What to have ready
- A list of every outpatient site billed as a hospital department, with the date each was created or acquired, matching the "department of a provider" definition.
- For each site, the measured distance to the main buildings and any CMS regional office statement on campus status.
- The license covering each department, or the State rule requiring a separate one.
- Medical staff privileges, medical director reporting lines and a unified medical record path (413.65(d)(2)), plus signage and patient materials that identify the department as part of the hospital (413.65(d)(4)).
- The trial balance and cost report location showing each department's costs and revenue in the hospital's financial system (413.65(d)(3)).
- For off-campus sites: ownership records, bylaws, an organizational chart and proof of the location test you rely on (413.65(e)).
- The beneficiary notice and the site-of-service billing setup for physician claims (413.65(g)(2), (g)(7)).
- The NPI and PECOS record for each off-campus department, the authorized official who will sign, and the street address, with suite or floor, that PECOS lists for each department.
To see where your file stands, start with the introductory call.
How it compares
Section 413.65(a)(2) defines a free-standing facility as an entity that furnishes health care services to Medicare beneficiaries and is not integrated with any other entity as a main provider, a department of a provider, remote location of a hospital, satellite facility, or a provider-based entity. An off-campus site used for physician office services is presumed free-standing unless CMS determines it is provider-based (413.65(b)(4)). The OIG report above states that payments in provider-based facilities are often more than 50 percent higher than for the same services in free-standing settings.
What it costs
The pages we reviewed state no government fee for a provider-based determination or attestation. IHS scopes each engagement after a free introductory call.
What this is not
- It is not legal advice or a reimbursement opinion; IHS is a consulting firm, not a law firm.
- It is not a summary of the whole final rule; it covers the provider-based provisions.
- It is not a determination of provider-based status; your hospital and counsel make that call.
Frequently asked questions
What is provider-based status?
It is the Medicare relationship between a main provider and a department, remote location or satellite facility that meets the requirements of 42 CFR 413.65. A facility is not provider-based because the hospital says so; the status depends on meeting the section's requirements (eCFR, 42 CFR 413.65).
What is the 250-yard campus rule?
Section 413.65(a)(2) defines a hospital's campus to include areas within 250 yards of the main buildings, plus any other areas the CMS regional office determines case by case. A site outside the campus is off-campus and faces the additional requirements in 413.65(e) (42 CFR 413.65).
What does the 2026 law change for off-campus departments?
Section 6225 of the Consolidated Appropriations Act, 2026 (Public Law 119-75) adds paragraph (23) to section 1833(t) of the Social Security Act. From January 1, 2028, OPPS payment for an off-campus outpatient department requires a separate NPI and the main provider's attestations, and CMS codified that at 42 CFR 419.23 in CMS-1850-FC.
When does the payment condition start?
January 1, 2028, for items and services furnished on or after that date. The initial attestation must be submitted in the 2-year period ending on the date the services are furnished; for departments providing services on or before January 1, 2028, CMS set the window at January 1, 2026 through December 31, 2027 (CMS-1850-FC).
Does each department need its own NPI?
Yes, each off-campus outpatient department does. For this purpose a department is all hospital operations at one physical address listed in PECOS, and the main provider obtains the NPI and updates PECOS before it attests (CMS-1850-FC).
What is an attestation?
Under 413.65(b)(3)(ii), an off-campus facility's attestation states that it meets paragraphs (d) and (e), plus (h) if a management contract operates it. The current text has the provider supply documentation of its basis with the attestation; from January 1, 2027 the final rule has it maintain that documentation and furnish it on request (42 CFR 413.65; CMS-1850-FC).
Is the standardized attestation form final?
Not yet final. CMS-1850-FC adopts a standardized form and a centralized electronic system, but providers may keep using the current process until both are finalized, and the attestation format on its page is still labeled proposed.
What should a hospital do when it acquires a clinic?
Test the site against 413.65 before it bills as a hospital department: campus status, created or acquired, license, integration, public awareness, and for an off-campus site ownership, administration and location. Then build the evidence file and the attestation and NPI calendar. IHS drafts those; your staff and counsel decide and file.