Problems with localized nonhomogeneous material properties arise frequently in many applications and are a well-known source of difficulty in numerical simulations. In certain applications (including additive manufacturing), the physics of the problem may be considerably more complicated in relatively small portions of the domain, requiring a significantly finer local mesh compared to elsewhere in the domain. This can make the use of a uniform mesh numerically unfeasible. While nonuniform meshes can be employed, they may be challenging to generate (particularly for regions with complex boundaries) and more difficult to precondition. The problem becomes even more prohibitive when the region requiring a finer-level mesh changes in time, requiring the introduction of refinement and derefinement techniques. To address the aforementioned challenges, we employ a technique related to the Fat boundary method as a possible alternative. We analyze the proposed methodology, from a mathematical point of view and validate our findings on two-dimensional numerical tests.