Could a Recent CMS Deregulation Regulation Save Health Care Providers $8 Billion?

As part of President Obama’s regulatory lookback initiative, the Centers for Medicare and Medicaid Services (CMS) issued a final rule last week (the “Rule”) that overhauled numerous staffing regulations affecting hospitals and clinics, extended deadlines for nursing homes to improve fire safety and removed certain data reporting requirements for organ transplant centers. CMS estimates that the changes will save health care providers $660 million annually and roughly $8 billion over five years.  

Together with another rule finalized in 2012, the Rule represents the second round of changes in response to Executive Order 13563 issued in 2011, which sets out principles and requirements designed to promote federal agencies to modify, streamline or eliminate excessively burdensome and unnecessary regulations on business. Specifically, the Executive Order directed federal agencies to develop a Preliminary Plan on the Retrospective Review of Existing Regulations, which outlined the agency’s approach for periodically reviewing regulations to determine whether any rules should be modified, streamlined, expanded, or repealed to make the agency’s regulatory program more effective or less burdensome in achieving the regulatory objectives.

The Rule responds to the Executive Order by attempting to relieve health care providers of inefficiency by eliminating regulations that are out of date or no longer necessary. Many of the Rule’s provisions streamline health and safety standards required in order to participate in Medicare and Medicaid. Some of the key provisions of the Rule include:

• Elimination of requirements that ambulatory centers must meet in order to provide radiological services that are an integral part of their surgical procedures, permitting them greater flexibility for physician supervision requirements.
• Permitting trained nuclear medicine technicians in hospitals to prepare radiopharmaceuticals for nuclear medicine without the supervising physician or pharmacists constantly being present, which will help speed services to patients, particularly during off hours.
• Eliminating a redundant data submission requirement and an unnecessary survey process for transplant centers while maintaining strong federal oversight.

Some of the most significant new policies of the Rule include provisions:

• Stating that governing boards of hospitals no longer need to include a member of the medical staff and instead only have to consult directly from time to time with a staff representative;
• Reducing the burden on very small critical access hospitals, as well as rural health clinics and federally qualified health centers, by eliminating the requirement that a physician be held to a prescriptive schedule for being onsite; and
• Permitting registered dietitians and qualified nutritionists to order patient diets directly without requiring the preapproval of a physician or other practitioner.