Facility managers are facing an uphill battle. Hospitals and healthcare facilities are adding more systems, more equipment, and more compliance requirements, yet staffing levels and budgets rarely keep pace. In many cases, they’re going backward. Facility leaders are being asked to do more with less, and increasingly, doing less, with less has become the new reality.

In this environment, every resource counts. That’s where Alternative Equipment Maintenance (AEM) comes in. AEM isn’t just a compliance allowance, it’s a strategic opportunity to improve operational efficiency, direct resources where they’re needed most, and strengthen patient safety. But too many facilities still haven’t adopted it, leaving time and money on the table.

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The CMS Perspective

The Centers for Medicare & Medicaid Services (CMS) issued S&C Letter 14-07 to clarify hospital equipment maintenance requirements. Under 42 CFR 482.41(c), hospitals must maintain facilities, supplies, and equipment to ensure an acceptable level of safety and quality. While CMS expects facilities to follow manufacturer recommendations, they also recognize that a risk-based, evidence-driven approach can be more effective.

“A hospital may adjust its maintenance, inspection, and testing frequency and activities for facility and medical equipment from what is recommended by the manufacturer, based on a risk-based assessment by qualified personnel.” (CMS S&C 14-07)

That’s the core of AEM. If you have the data, the expertise, and the documentation, you can tailor maintenance schedules and activities to fit your equipment, your environment, and your resources — while staying fully compliant.

However, there are limits:

• Imaging and radiologic equipment must follow manufacturer recommendations.
• Medical laser devices are excluded.
• New equipment with insufficient performance history cannot be placed in an AEM program.
• Fire protection and other code-driven systems (e.g., fire alarms, emergency generators) must be maintained per NFPA requirements.

If your AEM strategy covers eligible equipment and follows CMS guidance, it’s not just permissible — it’s encouraged.

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Types of Equipment Maintenance

Understanding where AEM fits requires knowing the four primary strategies for equipment maintenance:

• Preventive Maintenance (PM) – Scheduled activities performed at fixed intervals to reduce equipment failure.
• Predictive Maintenance – Uses monitoring data to anticipate failures and schedule maintenance just before performance declines.
• Reactive Maintenance – Repairs or replacements performed after equipment fails, used for low-cost, low-risk items.
• Reliability-Centered Maintenance (RCM) – A holistic approach that optimizes maintenance based on reliability, risk, and operational context.

AEM is not a replacement for these strategies — it’s the framework that lets facilities decide when to use each one. It gives facility leaders the flexibility to align maintenance schedules and activities with actual risk and resource availability.

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Why AEM Matters Now

Healthcare facilities are under pressure. Advanced HVAC systems, integrated nurse call systems, automated transport solutions, and specialized medical devices add to the equipment inventory, adding maintenance responsibilities to already stretched facility teams .

This creates an unsustainable dynamic:

• More equipment, fewer staff.
• Increasing compliance requirements, shrinking budgets.
• Rising expectations, fewer resources.

That’s why AEM is more than a compliance strategy — it’s a survival strategy.

A well-designed AEM program allows facility teams to:

• Prioritize maintenance on high-risk, high-impact equipment.
• Reduce unnecessary maintenance on low-risk items.
• Optimize technician workload.
• Improve safety and reliability by focusing resources where they matter most.

In other words, it helps facility managers meet the challenge of doing less, with less — without compromising compliance or patient care.

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Exhaust Fans: A Practical Example

Here’s a real-world example from one hospital’s AEM strategy.

Before AEM, every exhaust fan in the facility received the same maintenance schedule: quarterly inspections, greasing, and belt replacements. It didn’t matter if the fan served an operating room or an administrative storage closet — everything was treated equally.

The result?

• Dozens of unnecessary maintenance tasks every quarter.
• Wasted technician time and limited resources.
• Rushed work on critical systems.

With AEM, the facility conducted a risk-based assessment:

• Critical exhaust fans (e.g., those serving isolation rooms, soiled utility rooms, and sterile processing) stayed on a strict PM schedule per manufacturer recommendations.
• Non-critical exhaust fans (e.g., administrative areas) were moved to semi-annual inspections or even reactive maintenance only.

The results were immediate:

• More time for high-risk equipment.
• Fewer unnecessary belt replacements.
• Reduced supply costs.
• Improved reliability where it mattered most.

This example illustrates the value proposition of AEM: Better outcomes through smarter prioritization.

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How to Get Started with AEM

Launching an AEM program doesn’t require reinventing your maintenance process — but it does require a structured, documented approach. Here are four foundational steps:

1. Identify Eligible Equipment

Not every system belongs in an AEM program. Exclude:

• Imaging and radiologic devices.
• Medical lasers.
• Code-driven fire protection systems.
• Newly acquired equipment without sufficient maintenance history.

Focus instead on equipment where performance data and risk assessments support flexibility.

2. Perform a Risk Assessment

Risk drives the entire AEM strategy. Consider:

• How critical is the equipment to patient care and safety?
• What are the consequences of failure?
• How likely is failure based on history, environment, and usage?

Document your findings and classify equipment into categories — for example:

• Category 1: Critical systems where failure could cause patient harm or significant operational disruption.
• Category 2: Non-critical systems where failure has limited impact.

3. Document Your Strategy

CMS requires clear documentation to support every AEM decision, including:

• Variance from manufacturer recommendations.
• Risk factors considered.
• Maintenance activities and frequencies.
• Equipment failures and corrective actions.

Pro tip: Integrate your AEM strategy into your Utility Systems Management Plan or make it a stand-alone policy.

4. Monitor and Evaluate Performance

AEM isn’t a “set it and forget it” program. Review and update your strategy regularly:

• Track failure rates.
• Analyze performance trends.
• Adjust maintenance intervals when data supports it.

Performance data should flow into your Safety Committee or QAPI reporting. If equipment reliability decreases, revisit the plan.

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Qualified Personnel Are Key

CMS is clear that only qualified personnel can make decisions about AEM participation and schedules.

Depending on the system, this may include:

• Certified Healthcare Facility Managers (CHFM).
• Biomedical Equipment Technicians (BMET).
• Clinical or biomedical engineers.
• Experienced facility managers and directors.

Highly specialized equipment may require additional expertise or vendor input. Document qualifications and ensure contractors meet the same standards.

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Tying AEM Back to CMS Compliance

An AEM program isn’t just a good idea — it’s a CMS-recognized approach backed by regulatory guidance. According to S&C 14-07:

“Hospitals electing to adjust facility or medical equipment maintenance must develop policies and procedures and maintain documentation supporting their Alternate Equipment Management (AEM) program. They must adhere strictly to the AEM activities and/or frequencies they establish.”

In other words, if it’s not documented, it didn’t happen. Your ability to demonstrate risk assessments, qualified decision-making, and performance monitoring will determine whether surveyors view your AEM program as compliant.

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Final Thoughts

Alternative Equipment Maintenance isn’t just about cutting costs or checking compliance boxes, it’s about working smarter in an environment where resources are limited, risks are real, and patient safety is non-negotiable.

By:

• Using risk-based assessments,
• Prioritizing critical systems,
• Optimizing technician time,
• And leveraging CMS-approved flexibility,

…facility managers can meet today’s growing demands while doing less, with less — and still deliver safe, reliable care environments.

The takeaway is simple: If you’re not using AEM, you’re missing an opportunity — one that CMS supports, one that improves operations, and one your facility can’t afford to ignore.

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For more information, review the CMS Memorandum S&C 14-07: Hospital Equipment Maintenance Requirements.

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