Feds release reg-killing plan
Fiscal benefits of less red tape questioned
Afederal regulatory rollback promising more than $1 billion in annual savings to hospitals— chiefly through reduced personnel costs— is meeting heavy skepticism from providers and healthcare experts.
The Obama administration completed one rule and proposed two more last week to reduce regulatory burdens on hospitals and other providers. They are part of an initiative announced in January to eliminate unnecessary and outdated rules that hinder productivity and economic growth.
The final rule would simplify the conditions for coverage for ambulatory surgical centers and save those facilities about $50 million annually in regulatory compliance. Similarly, those facilities and end-stage renal disease facilities would save another $37 million annually through a separate proposed rule to drop other rules deemed “duplicative, overlapping, outdated and conflicting,” such as mandating the purchase and upkeep of unnecessary equipment.
The bulk of the expected savings—more than $940 million annually—would come through a proposed revamp of Medicare and Medicaid’s conditions of participation, or COP, for hospitals.
Hospital advocates generally welcomed the regulatory rollback as a step in the right direction. And in some ways, they are more significant than various initiatives under the Patient Protection and Affordable Care Act because those are generally voluntary.
“The changes will have some impact on virtually every hospital in the country,” said Nancy Foster, vice president for quality and patient safety at the American Hospital Association.
But hospitals were skeptical about the financial benefits of the rule changes and expressed the most interest in one provision with little estimated savings. The provision most touted by hospital advocates was the elimination of a requirement that each hospital within a healthcare system maintain its own governing body.
Hospitals have faced increased CMS scrutiny over the board provision since enactment of the Medicare Improvement for Patients and Providers Act of 2008, said Beth Feldpush, vice president for advocacy and policy at the National Association of Public Hospitals and Health Systems. That law moved hospitals from accreditation by the Joint Commission, which allowed the use of a single board, to the CMS’ COP, which does not.
“That really challenged a lot of hospitals, and it didn’t have any benefits in terms of patient care,” Feldpush said about the requirement. But the challenge that enforcement of the governing board provision created had less to do with additional costs for hospitals than the logistical headaches it created, according to hospital experts.
“You’re requiring these hospitals to re-populate all of these boards with competent, nonconflicted and sophisticated members,” said Michael Peregrine, a partner at the law firm of McDermott Will & Emery. “That’s an enormous burden.”
The bulk of the savings from the hospital rule changes, federal officials and hospital experts agree, will likely stem from changes for personnel. What form those personnel changes will take is less clear, although both groups stressed that they do not expect them to include layoffs.
For example, when asked during an Oct. 18 call with reporters whether the reduction in regulatory burdens would allow hospitals to reduce their number of staff devoted to compliance with those rules, federal officials insisted that would not occur. “We don’t expect job losses here,” said Cass Sunstein, administrator of the Office of Information and Regulatory Affairs in
New regulations would allow hospitals to increase the duties of lower-level personnel, giving doctors more time with patients.