CMS Final Rule Will Streamline Regulations, Save $660 Million Annually

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By Nathaniel Weixel  

May 7 — Reforms to Medicare regulations aimed at reducing regulatory burdens on providers will save nearly $660 million annually, and $3.2 billion over five years, under a final rule (RIN 0938-AR49) issued May 7 by the Centers for Medicare & Medicaid Services (79 Fed. Reg. 27,105).

The wide-ranging final rule is intended to increase the ability of health-care professionals to devote resources to improving patient care by eliminating or reducing requirements that impede quality patient care or that divert resources from providing high-quality patient care, according to the CMS.

The final rule was published in the Federal Register May 12 and will take effect July 11, the agency said. According to the CMS, the final rule supports President Barack Obama's unprecedented regulatory retrospective review—or “regulatory lookback”—initiative, where federal agencies are modifying, streamlining or eliminating excessively burdensome and unnecessary regulations for business.

The rule supports President Obama's unprecedented regulatory retrospective review—or “regulatory lookback”—initiative, where federal agencies are modifying, streamlining or eliminating excessively burdensome and unnecessary regulations for business.

It is the latest of several rules the agency said it is issuing to achieve regulatory reforms under Executive Order 13563, which calls on federal agencies to modify and streamline regulations on business.

The final rule is a continuation of efforts that began in May 2012, when the CMS issued its first final rules under the executive order. Those rules, which were also aimed at reducing burdensome or unnecessary regulations for hospitals and other providers, are saving nearly $1.1 billion across the health-care system in their first year and will save more than $5 billion over five years, the CMS said.

Hospitals, Clinics, Surgery Centers

The latest rule will help providers operate more efficiently by eliminating regulations that are out of date and streamlining health and safety standards providers must meet to participate in Medicare and Medicaid, the agency said.

For example, an important provision reduces the burden on very small critical access hospitals (CAHs), 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 on-site once every two weeks. This provision seeks to address the geographic barriers and remoteness of many rural facilities and recognize telemedicine improvements and expansions that allow physicians to provide many types of care at lower costs while maintaining high-quality care.

Another provision reduces the requirements ambulatory surgical centers (ASCs) must meet to provide radiological services they actually perform. ASCs are currently subject to the full hospital requirements for radiology services, even though they are only permitted to provide limited radiologic services integral to the performance of certain surgical procedures, the CMS said in the rule. The change will permit ASCs greater flexibility for physician supervision requirements, the CMS said.

The rule also addresses how CAHs provide services. The Medicare conditions of participation (CoP) require that a CAH develop its patient care policies with the advice of “at least one member who is not a member of the CAH staff.” The CMS in the rule said that provision is no longer necessary and the original reasons for including the requirement (for example, lack of local resources and in-house expertise) have been effectively addressed.

“Also, based on our experience with CAHs and input from the provider community, it is a challenge for facilities to comply with this requirement,” the CMS said in the rule. “These challenges include the amount of time it takes to familiarize the non-staff member with the CAH's operations, high turnover, and, in many cases, the expense of paying outside personnel.”

The rule also eliminates a redundant data submission requirement and an unnecessary survey process for transplant centers while maintaining strong federal oversight.

“By eliminating stumbling blocks and red tape we can assure that the health care that reaches patients is more timely, that it's the right treatment for the right patient, and greater efficiency improves patient care across the board,” CMS Administrator Marilyn Tavenner said in a statement.

To contact the reporter on this story: Nathaniel Weixel in Washington at

To contact the editor responsible for this story: Brian Broderick at

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