Hospitals to HHS: Ease Up on Regulatory Burdens

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By Mike Stankiewicz

The Trump administration should take specific steps to reduce the regulatory burden on hospitals, an industry group said in a May 17 letter to Health and Human Services Secretary Tom Price.

The Federation of American Hospitals, which represents investor-owned hospitals, called for changes in numerous areas, including suspending the hospital quality ratings system and readjusting bundled payment programs.

When health-care regulations ”start hindering care instead of helping people—we have a problem,” FAH President and CEO Chip Kahn said in a statement May 17. “Caregiver focus should be on the patient, not outdated or ineffective bureaucratic mandates.”

Problems With Ratings System

Other hospital groups, the American Hospital Association (AHA) and the Association of American Medical Colleges (AAMC), have asked the administration for similar actions in recent months.

Ivy Baer, senior director and regulatory counsel at the AAMC, agreed with the FAH’s recommendation for a new hospital ratings system. Under the current system, hospitals are given between one and five stars depending on well they scored on dozens of quality measures, such as emergency room waiting times.

“The info in the current rating system doesn’t give patients the best knowledge to make the best decisions,” Baer told Bloomberg BNA May 18. “There is a lot of work that still needs to be done.”

The AAMC sent its own list of recommendations to Centers for Medicare & Medicaid Services Administrator Seema Verma on March 14.

In December 2016, after the election but before President Donald Trump took office, the AHA asked for regulatory relief for hospitals in numerous areas.

“We have long advocated for reducing the substantial and unsustainable regulatory burdens facing our members, " Joanna Kim, vice president of payment policy and analysis at AHA, told Bloomberg BNA May 18.

One of the AHA recommendations, Kim said, was making the future bundled payment programs voluntary.

“Hospitals should not be forced to bear the expense of participation in these complicated programs if they do not believe they will benefit patients, Kim said.” Bundled payment programs are intended to improve coordination between hospitals and post-acute care providers to avoid complications and prevent readmissions.

And the FAH, in its letter, called for an end to certain mandatory payment models, such as the Episode Payment Model (EPM) or the Comprehensive Care for Joint Replacement (CJR) models.

The industry group said it doesn’t believe federal law authorizes the Centers for Medicare & Medicaid Services to mandate providers’ participation in such models. “As such, CMS should make them voluntary,” the hospital group said.

Separately, the government delayed until January 2018 some aspects of these EPM and CJR payment models, in a notice set for May 19 Federal Register publication.

Regulatory Executive Order

The FAH’s letter cited the Feb. 24 executive order by Trump, ordering a reduction in “unnecessary regulatory burdens placed on the American people.”

Kahn praised the Trump administration’s regulatory reform efforts. “This executive order has started a critically important dialogue that we hope will ultimately improve the quality of care for patients,” he said.

“The administration had been very open and receptive,” Lisa Tofil, an attorney at Holland & Knight in Washington, told Bloomberg BNA May 18. “It seems they really welcome people’s ideas on how to improve efficiency and reduce costs. Any regulatory relief that could be provided would be helpful, especially from the provider side.”

Home Health Demos, RACs

The FAH recommended the CMS permanently end the controversial home-health demonstration, a program intended to reduce home-health fraud in states that have historically seen high levels of fraud. The FAH said the demonstration is riddled with problems, such as delayed claims and extended wait times in submitting the pre-claims for approval, which affected hospital workflow and negatively affected outcomes for beneficiaries.

William Dombi, vice president for law at the National Association for Home Care and Hospice, told Bloomberg BNA May 18 that ending the home-health pre-claim “would save Medicare a few hundred million dollars.” Dombi is a Bloomberg BNA advisory board member.

The AHA also supported ending the program.

“We support the Administration’s current pause on the onerous home health pre-claim review demonstration,” Kim said. “We urge CMS to instead consider more targeted policies, such as education and other interventions that only focus on agencies and/or claims with high payment error rates.”

Also on the list of issues highlighted by the FAH in its letter was the Recovery Audit Contractor program, under which the RAC contractors receive payment based on their denials of Medicare claims. Industry said this has led to “overzealous denials, delayed payments to health care providers for appropriate services, and a years-long backlog of appeals.”

To contact the reporter on this story: Mike Stankiewicz in Washington at

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

For More Information

The FAH's letter is at

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