Trump Administration Signals More Medicare Deregulation This Year

By Mike Stankiewicz

The White House appears to be signaling greater Medicare regulatory relief this year, much to hospitals’ delight.

However, not everyone is jumping for joy.

The Centers for Medicare & Medicaid Services submitted a proposed rule (RIN:0938-AT23) to the Office of Management and Budget Feb. 2 that aims to reduce Medicare regulations that the agency describes as “unnecessary, obsolete, or excessively burdensome.” The main change would be to health-care providers’ conditions of participation and conditions for coverage. However, a full proposal from the agency has not been released, and no details are available on specific regulatory changes to the terms of conditions. Regardless, hospitals are looking forward to reduced compliance requirements.

Nancy Foster, vice president of quality and patient safety policy at the American Hospital Association, said most regulations are necessary, but many are costly and time-consuming, and end up doing more harm than good.

“It turns out the conditions of participation is one of the heaviest lifts for hospitals in terms of needing resources for compliance and recertification,” she told Bloomberg Law Feb. 5. “Staff, including doctors, nurses, and even hospital engineers, need to be involved in making sure compliance is met, and that takes a lot of effort.”

The proposed rule could be released as early as this spring.

‘Whose Interests Are Being Served?’

The submission to the OMB follows regulatory relief actions taken by the administration last year, including changes to performance scoring for hospitals in natural disaster areas and cancellation of mandatory bundled payment models.

Michael Abrams, co-founder and managing partner at Numerof & Associates, a health-care consulting firm based in St. Louis, said the move is consistent with the agency’s stance on regulatory priorities and reducing the burden of compliance.

“The recertification process in particular is very laborious, with lots of forms and procedures that take time to handle,” he told Bloomberg Law Feb. 5. “If providers are not in compliance within the time designated, they could be hit with heavy fees.” He added that while reducing the demands of the recertification process is a good thing for hospitals, the trade-off would be a decline in protections for patients.

“Once the rule is made public and details are announced, the question will be whose interests are being served,” he said.

HCA Healthcare, one of the largest hospital companies, didn’t respond to Bloomberg Law’s request for comment.

Nervousness

Not everyone is looking forward to the proposed rule. David A. Lipschutz, senior policy attorney for the Center for Medicare Advocacy, said he is concerned about further deregulation within Medicare based on requests for information from the agency.

“We’ve seen a lot of requests for information and feedback over the past year that have included a lot of open-ended questions on how to reduce burden,” he told Bloomberg Law Feb. 5. “It seems like a fishing expedition.”

He added that he fears Medicare patients may be hurt by pulling back consumer protections. “Conditions of participation are important to consumer protections,” he said. “We think this administration is focused more on cutting what they see as red tape, and less so about protecting consumers.”

Lipschutz also cited the agency’s attempts last year to rescind a ban on predispute arbitration agreements and rollbacks of guardrails for Medicare managed care plans as possible harbingers of what’s to come.

“Based on what we saw last year, I’m pretty nervous,” he said.

To contact the reporter on this story: Mike Stankiewicz in Washington at mstankiewicz@bloomberglaw.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bloomberglaw.com

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