CMS Says Proposed Rule Will Save $676 Million Annually

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Reprinted in partnership with The American Health Lawyers Association 

March 2013—The Centers for Medicare & Medicaid Services (CMS) issued February 4 a proposed rule it said would reduce unnecessary, obsolete, and burdensome regulations on hospitals and healthcare providers, saving nearly $676 million annually, and $3.4 billion over five years.

In January 2011, President Obama issued Executive Order No. 13563 calling on all federal agencies to achieve a more robust and effective regulatory framework. The proposed rule is part of that initiative, according to a CMS press release, as were two final rules issued by the agency in May 2012.

“We are committed to cutting the red tape for health care facilities, including rural providers,” said Department of Health and Human Services Secretary Kathleen Sebelius. “By eliminating outdated or overly burdensome requirements, hospitals and health care professionals can focus on treating patients.”

To help improve efficiency, the proposed rules would streamline Medicare and Medicaid participation standards for providers.

For example, the release explained, the proposed rule would eliminate the requirement that physicians be onsite once every two weeks at small critical access hospitals, as well as rural health clinics and federally qualified health centers. “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,” the press release said.

Another provision would reduce the requirements Ambulatory Surgical Centers (ASCs) must meet to provide radiological services. ASCs currently must meet hospital requirements for radiology services even though they are only permitted to provide a limited set of services integral to performing certain surgical procedures.

The proposed rule also would include qualified dietitians as practitioners who may be privileged to order patient diets under the hospital conditions of participation (CoPs).

The proposed rule would allow trained nuclear medicine technicians in hospitals to prepare radiopharmaceuticals for nuclear medicine without the presence of a supervising physician or pharmacist.

In addition, the proposed rule would eliminate redundant data submission requirements and the automatic, three-year review and survey process for transplant centers.

With respect to an impending August 13, 2013 sprinkler requirement for long term care facilities, CMS is proposing to allow such facilities to apply for a deadline extension up to two years if certain conditions apply. CMS also would leave open the potential for an additional one-year extension depending on the circumstances. CMS said the proposed extension is based on recent public feedback that some facilities will be unable to meet the 2013 deadline.

In the May 2012 rules, CMS amended the CoP regarding governing bodies to allow multi-hospital systems to have one governing body that included “a member, or members, of the hospital’s medical staff.”

But following objections to this requirement, CMS subsequently indicated it would undertake further review of the issue and instructed surveyors not to cite hospitals for not having a member of its medical staff on the governing body until further notice.

CMS is now proposing to remove the requirement for a medical staff member to be on a hospital’s governing body. Instead, the proposed rule would add a new requirement that a hospital’s governing body directly consult at least periodically throughout the year with the individual responsible for the organized medical staff of the hospital, or his or her designee.

“For a multi-hospital system using a single governing body to oversee multiple hospitals within its system, this provision would require the single governing body to consult directly with the individual responsible for the organized medical staff (or his or her designee) of each hospital within its system,” the proposed rule said.

CMS also is proposing to revise the hospital CoPs to require that each hospital have an organized and individual medical staff, distinct to that individual hospital, that operates under bylaws approved by the governing body, and that is responsible for the quality of medical care provided to patients by that individual hospital.

In addition, the proposed rule would revise the outpatient services CoP to allow practitioners who are not on a hospital’s medical staff to order hospital outpatient services for their patients when authorized by the medical staff and allowed by state law.

The proposed rule was published in the February 7 Federal Register (78 Fed. Reg. 9216) with comments due April 8.

This article appeared in the Health Lawyers Weekly, February 8, 2013, and is reprinted here with permission.  Copyright American Health Lawyers Association (AHLA) 2013.  No further distribution of the article is allowed without express permission of AHLA.  Please visit their website at for more information about this topic.

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