CMS Proposes Rules to Reduce Regulatory Burden on Hospitals

The Centers for Medicare & Medicaid Services (CMS) proposed new rules that would reduce unnecessary, obsolete, or burdensome regulations and save hospitals and healthcare providers nearly $1.1 billion each year and over $5 billion over 5 years.  The new proposals regarding the rules for hospitals that treat Medicare and Medicaid patients were developed in response to President Obama’s call on all Federal agencies to eliminate burdensome and unnecessary regulations.

The New York Times noted that, “Many of the new proposals deal with Medicare and Medicaid rules that have not been altered in decades. In general, the proposals do not affect the large number of rules issued under the new health care law, which set detailed standards for coverage offered by insurance companies and employers.”

The administration will accept public comments on the proposals for 60 days and will review the comments before issuing final rules with the force of law.   To submit a comment, visit www.regulations.gov, enter the ID number CMS-9070-P or CMS-3244-P, and click on “Submit a Comment.”

“The President and I have challenged agencies to hunt down burdensome regulations,” said Vice President Joe Biden.  “Today’s steps will remove outdated, duplicative, unnecessary burdens on hospitals – saving money and improving care.”

“President Obama has been clear: it’s time to cut the red tape,” said HHS Secretary Kathleen Sebelius.  “Our new proposals eliminate unnecessary and obsolete standards and free up resources so hospitals and doctors can focus on treating patients.”

CMS proposed two sets of regulatory reforms, and finalized a third.  All are designed to improve transparency and help providers operate more efficiently by reducing their regulatory burden.  

One set proposes to update the rules for hospitals that treat Medicare and Medicaid patients — the Medicare Conditions of Participation.  As an example, the proposed reforms would consolidate patient care plans and eliminate outdated requirements for hospital management.  This could save hospitals over $900 million per year and perhaps grow to much more over time as hospitals increasingly use this new flexibility.

The second set of reforms address regulatory requirements for providers other than hospitals and could save up to $200 million in the first year.  The rule would identify and begin to eliminate duplicative, overlapping, outdated, and conflicting regulatory requirements for healthcare providers and suppliers such as end-stage renal disease facilities and durable medical equipment suppliers.  Examples of these reforms include updating obsolete e-prescribing technical requirements to meet current standards and eliminating other out-of-date and overly prescriptive requirements for healthcare providers.

CMS is also finalizing a third rule that reduces regulatory burden for ambulatory surgical centers (ASCs), which is expected to save ASCs $50 million per year.  This rule makes common-sense changes to the requirements ASCs must follow in order to meet Medicare and Medicaid health and safety standards.

In announcing these new rules, CMS also noted other efforts including the National Quality Strategy and the Partnership for Patients.  These initiatives aim to reform the health care delivery system and bring together both private and public sector partners to keep patients from getting injured or sicker in the health care system and to improve transitions between care settings.  CMS intends to invest up to $1 billion to help drive these changes through the Partnership for Patients initiative.  And beginning in FY 2013, for the first time, the Hospital Value-Based Purchasing program authorized by the Affordable Care Act will pay hospitals’ inpatient acute care services based partially on care quality, not just the quantity of the services they provide.

The New York Times noted that, “under the proposals … it would be easier for hospitals to use “advanced practice nurse practitioners and physician assistants in lieu of higher-paid physicians.”  This change alone “could provide immediate savings to hospitals,” the Obama administration said.

Other proposals would roll back rules for doctors’ offices, kidney dialysis centers, organ transplant programs, outpatient surgery centers and institutions for people with severe mental disabilities.

One of the new proposals would allow hospital patients to take certain drugs on their own, with the approval of hospital officials but without immediate supervision by a nurse. A hospital may allow a patient to “self-administer both hospital-issued medications and the patient’s own medications brought into the hospital,” the proposal says. In the past, hospitals have often restricted patients’ ability to give medications to themselves.

Another proposal would relax requirements for hospitals to notify the federal government immediately after the death of any patient who had been confined with certain wrist restraints like those used to prevent patients from harming themselves by pulling out intravenous tubes.

Other proposals would eliminate requirements for hospitals to keep detailed logs of infection control problems and would relieve certain organ transplant centers of the need to certify the blood type of organ donors. Hospitals would still have to investigate outbreaks of infections, and other medical experts would check on donors’ blood type.

The administration said it was proposing the second change “in an effort to reduce the administrative burden for transplant centers and the surgeons” who obtain organs for transplants.

The administration also proposed eliminating fire safety standards for certain kidney dialysis centers. The federal standards duplicate state and local standards and would require some dialysis centers to make costly structural changes, it said.

Federal officials would also eliminate a detailed list of emergency equipment that must be available in the operating rooms of outpatient surgery centers. Such clinics would have leeway to decide what equipment was needed for the procedures they performed.

Under current rules, each hospital must have its own governing body, which is legally responsible for its operations. Under the proposal, a multihospital system could have a single governing body for all its hospitals.

Not all the rules are aimed at saving money.  One proposal would discontinue use of the term “Medicaid recipients” to refer to low-income people receiving medical assistance. In the future, the government will refer to them as Medicaid beneficiaries, just as it speaks of Medicare beneficiaries.