On October 18, the Centers for Medicare & Medicaid Services (CMS) took steps to reduce unnecessary, obsolete, or burdensome regulations on American hospitals and healthcare providers. These steps would help achieve the key goal of President Obama’s regulatory reform initiative to reduce unnecessary burdens on business and would save nearly $1.1 billion across the health care system in the first year for a total of over $5 billion over 5 years 
.
CMS proposed two sets of regulatory reforms today, and finalized a third. All are designed to improve transparency and help providers operate more efficiently by reducing their regulatory burden. One set proposes updates to the Medicare Conditions of Participation (CoPs) for hospitals and critical access hospitals (CAHs). The second set addresses regulatory requirements for a broader range of health care providers and suppliers who are regulated under Medicare and Medicaid. CMS also finalized a third rule reducing regulatory burden for ambulatory surgical centers (ASCs).
CMS estimates that annual savings to hospitals from the proposed revisions to the Conditions of Participation could exceed $900 million in its first year as hospitals increasingly use this new flexibility. The Medicare Regulatory Reform rule could save up to $200 million in the first year. The final rule for ASCs could generate an extra $50 million in savings per year.
Taken together, these three rules would reduce hospital and other healthcare provider costs by nearly $1.1 billion the first year. These cost savings would come directly from reduced regulatory burdens, and are not accompanied by reimbursement reductions. As such, all of these savings would be available to help providers improve the quality of care they provide to Medicare beneficiaries and all Americans.
Background
The proposed rules were developed through a retrospective review of existing regulations called for by President Obama’s January 18, 2011 Executive Order 13563, to “modify, streamline, or repeal” regulations which impose unnecessary burdens, including on hospitals and other providers that must comply with requirements under Medicare.
The rules take into consideration numerous burden reduction recommendations from hospitals, critical access hospitals, and patient advocates, among others.
Medicare Conditions of Participation
The Conditions of Participation are federal health and safety requirements ensuring high quality care for all patients. Hospitals and critical access hospitals must meet these conditions to participate in the Medicare and Medicaid programs. The proposed rule is designed to reduce the regulatory burden on hospitals by the following:
· Eliminating burdensome requirements that do not permit hospital patients or their caregivers/support persons to administer certain medications.
· Allowing hospitals to determine the best ways to oversee and manage outpatients by removing the unnecessary requirement for a single Director of Outpatient Services.
· Increasing flexibility for hospitals by allowing one governing body to oversee multiple hospitals in a single health system.
· Enabling hospitals to have a single, interdisciplinary care plan that supports coordination of care instead of requiring a separate stand-alone nursing care plan.
· Allowing CAHs to provide certain services, including laboratory and radiology services, under arrangement.
Medicare Regulatory Reform
The Medicare Regulatory Reform rule would identify and begin to eliminate duplicative, overlapping, outdated, and conflicting regulatory requirements for health care providers and suppliers, including hospitals, ambulatory surgical centers, end-stage renal disease facilities, durable medical equipment suppliers, and a host of other healthcare providers and suppliers regulated under Medicare and Medicaid. The goal of this proposed rule is to both reduce regulatory burdens and help providers improve care for patients.
This rule would help reduce unnecessary burdens on health care providers, allowing them to dedicate more resources to improving patient care. Some of the more than two dozen proposed regulatory changes include:
· Eliminating obsolete regulations, including expired OMB paperwork control numbers; outmoded infection control instructions for Ambulatory Surgical Centers; outdated Medicaid qualification standards for physical and occupational therapists; and duplicative requirements for governing bodies of Organ Procurement Organizations.
· Clarifying which higher risk End Stage Renal Disease (ESRD) facilities are required to comply with the full federal Life Safety Code requirements. CMS estimates that this burden reduction could save an estimated $108.7 million for the ESRD program.
· Eliminating the current Medicare requirement that automatically deactivates a provider or supplier who has not submitted a claim for 12 consecutive months, keeping providers from inadvertently being barred from re-enrolling in Medicare for a certain period. Savings from this regulatory reform are projected to be $26.7 million annually.
· Eliminating the specific list of emergency equipment Ambulatory Surgical Centers must have on hand, and allowing facilities, in conjunction with medical staff and their governing bodies, to develop policies and procedures that specify emergency equipment appropriate to the services they provide.
· Replacing inflexible time-limited agreements which govern Intermediate Care Facilities for the Mentally Retarded participation in Medicaid, with open-ended agreements and reducing states’ paperwork burden by requiring inspection of these facilities once a year. The regulation also takes up a recommendation from stakeholders to replace the term “mental retardation” with the term “intellectual disability,” which has gained wide public acceptance in recent years.
· Updating e-prescribing technical requirements so Medicare Prescription Drug Plans meet current standards.
Regulatory Reform for Ambulatory Surgical Centers
Today’s announcement also includes a final rule from CMS that would update the conditions for coverage regulations for Ambulatory Surgical Centers (ASCs), based on a proposed rule CMS issued in April 2010.
This new final rule simplifies requirements that ASCs must follow in notifying patients about their rights. Specifically, the final rule will allow ASCs to provide the patient, the patient’s representative, or the patient’s surrogate with patient rights information prior to the start of the surgical procedure. Before today’s final rule, ASCs were required to notify patients in advance of the date of the procedure. This caused particular logistical problems and inconveniences for patients who needed ASC services on the same day they received a physician referral.
For More Information
To view the proposed rules, please visit www.ofr.gov/inspection.aspx. 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.”
For additional information on hospital and critical access hospital Conditions of Participation, visit http://www.cms.gov/CFCsAndCoPs/06_Hospitals.asp
The proposed rule also invites public comment on a broad range of recommendations to improve patient safety and hospital quality of care beyond those specified in the Conditions of Participation.
CMS’ final rule on Ambulatory Surgery Centers will be effective on Tuesday, October 18, 2011. More information about ASCs is online at http://www.cms.gov/CFCsAndCoPs/16_ASC.asp.
The Department of Health and Human Services also has launched the Partnership for Patients initiative, a national collaboration with hospitals, employers, physicians, nurses, patient advocates, and State governments to protect patient safety, provide better care, and reduce costs. For more about the Partnership for Patients, go to: http://www.healthcare.gov/center/programs/partnership/index.html