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Officials: New CMS Rules Would Cut Red Tape, Save Billions

By Dena Bunis, CQ HealthBeat Managing Editor

October 18, 2011 -- Hospitals and health care providers could save more than $5 billion over the next five years as a result of new Medicare and Medicaid rules that would allow medical professionals to spend more time on patient care and less time on bureaucratic red tape, federal officials said Tuesday.

Health and Human Services (HHS) Secretary Kathleen Sebelius and Centers for Medicare and Medicaid (CMS) Administrator Donald M. Berwick unveiled two proposed rules and issued one final one.

One rule—the Medicare Conditions of Participation—would essentially free hospital officials to customize many of their procedures rather than follow strict federal regulations.

For example, critical access hospitals must have such services as radiology and lab work done in-house. The proposed rule would allow them to contract out that work. It also would allow one governing body to oversee multiple hospitals that are part of a single health system. Hospitals also would be allowed to have a single, interdisciplinary care plan that supports coordination of care instead of a separate plan just for nursing.

Currently, hospitals are required to have a single director of outpatient services. That requirement was fine years ago when most care in hospitals was inpatient, Sebelius said. Now, she said, more and more care is delivered on an outpatient basis. So under the proposal, hospital administrators would be free to decide their own management structure for outpatient care.

“In meeting with health care leaders, we found places where regulations were getting in the way of the best care,’’ Sebelius said during a conference call with reporters. The rules announced Tuesday, she said, “will reduce those burdens.” They were developed in response to President Obama’s charge to all federal agency heads to eliminate unnecessary regulations, she added.
Sebelius said that the proposed changes would remove many outdated billing practices, “saving hospitals and physicians time and money.’’

Under the new rules, hospitals would be free, for example, to use advanced practice nurses, physician assistants and other non-physician health care practitioners “to their greatest potential.” In many cases, Sebelius said, state laws allow greater flexibility in terms of what those professionals can do, while federal law imposes more limits. Under the proposal, hospitals would be able to credential and privilege these employees based on the more expansive state laws.

The second proposed rule—Medicare Regulatory Reform—is designed to eliminate “duplicate, 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 health care providers and suppliers regulated under medicare and Medicaid,’’ CMS said in a fact sheet.

For example, under this proposal CMS would eliminate the current Medicare requirement that automatically deactivates a provider or supplier who has not submitted a claim for 12 consecutive months, preventing providers from being barred from re-enrolling in Medicare for a certain period. CMS estimates that this provision alone would save $26.7 million a year.

CMS will take comments on the two proposed rules for the next 60 days.

Final Rule
The final rule announced Tuesday will change the requirements for notifying ambulatory surgical center patients about their rights. Currently, patients must receive this information before they come to the centers for procedures, not on the same day they are having the surgery.

The rule, which is a change from the proposal CMS published earlier this year, allows for same-day notification.

According to the final rule, there were about 7 million admissions to ambulatory surgery centers in 2009. The new regulation will reduce the number of visits a patient must make to the center before having a procedure. CMS estimates that 1.4 million visits a year can be avoided. Taking into consideration how much doctor, nurse and clerical staff time will be saved, the agency estimated that this rule will save providers $17.5 million a year.

Berwick called the regulation changes the “latest step in our movement to create a culture of patient-centered care in America.”

He also said that the savings projected from these rules would not mean staff cuts. Professionals in health care facilities as well as at CMS will be able to do more patient-centered and meaningful work, he said. Money will be saved because “time is money.”

HHS will be seeking comments on the proposed rules for 60 days.

Rich Umbdenstock, president and CEO of the American Hospital Association, welcomed proposed rules.

“The proposed new conditions of participation better recognize how care is delivered today,’ Umbdenstock said in a statement. “They eliminate unnecessary paperwork, allowing nurses more time at the bedside. In addition, the new rules allow multi-hospital systems to have one governing board that can provide comprehensive oversight across their hospitals.”

But Umbdenstock doesn’t want federal officials to think their work is done when it comes to streamlining regulations.

“While we also appreciate the changes made in the regulatory relief rule, there’s more work to be done to allow hospitals, physicians, nursing homes and others to better coordinate care for patients,’’ his statement said.

Dena Bunis can be reached at [email protected].

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