Knowledge Base Article

“Typically, repainting needs to occur every few years and before you repaint, you need to strip out the layers of paint from underneath. Otherwise it looks messy! Unfortunately, CMS has been applying new layers of paint without applying this essential step.”  

• Seema Verma, the Administrator of the Centers for Medicare and Medicaid Services speaking at the Health Care Payment Learning and Action Network Fall Summit, October 30, 2017

The American Hospital Association (AHA) published the report Assessing the Regulatory Burden on Health Systems, Hospitals and Post-Acute Care Providers to determine the impact of regulatory burden” on hospitals, health systems and post-acute care (PAC) facilities. The purpose of the report is twofold. First, inform policymakers, lawmakers and the public about the administrative impact federal regulatory requirements have on the ability to furnish high-quality patient care. Secondarily, this report seeks to offer a starting point for discussions on implementing meaningful regulatory reform.

The AHA approached this endeavor with a thorough review of the Federal Register and the U.S. Code of Federal Regulations for regulations impacting hospitals and PACs across the following nine domains:

• Quality Reporting,
• New Models of Care/Value-Based Payment (VBP) Models,
• Meaningful Use (MU) of Electronic Health Records (EHRs),
• Hospital Conditions of Participation (CoPs),
• Program Integrity,
• Fraud and Abuse,
• Privacy and Security,
• Post-Acute Care, and
• Billing and Coverage Verification Requirements.

The four agencies described by the AHA as being “the primary drivers of federal regulations impacting these providers” are the Centers for Medicare and Medicaid Services (CMS), the Office of Inspector General (OIG), the Office of Civil Rights (OCR) and the Office of the National Coordinator for Health Information Technology (ONC).  

Report Findings by the Numbers

• 629 – The number of mandatory regulatory requirements in effect as of March 2017.
• 341 – The number of hospital related requirements.
• 288 – The number of PAC related requirements.
• $38.6 Billion – The national cost of administrative activities related to regulatory compliance across the 9 domains.
• 59 – The number of FTEs an average-sized hospital (161 beds) dedicates to regulatory compliance. PAC regulations require an additional 8.1 FTEs.
• 4.6 – The number of FTEs an average-sized hospital devotes to quality reporting requirements.
• $706,000 – The annual amount spent by an average-sized hospitals on administrative aspects of quality reporting.
• $760,000 – The annual amount spent by an average-sized hospital to meet Meaningful Use (MU) administrative requirements.
• 63% - The report found that over 63% of compliance costs are dedicated to compliance with documenting CoP adherence and billing and coverage verification processes.

AHA Recommends Immediate Actions

The report lists twelve immediate activities that should be taken by Congress and the Administration to “reduce regulatory burden and enhance care coordination, without negatively impacting patient care.”

Among the recommendations, two specific recommendations would definitely relieve regulatory burden for Hospital Case Managers.

• Modify Medicare CoP to allow hospitals to recommend post-acute care providers, and
• Remove the mandatory free-text field from the Medicare Outpatient Observation Notice (MOON) and eliminate the confusing Second Important Message from Medicare.

In keeping with the purpose to inform policymakers and lawmakers, all of the recommendations were provided by AHA in letters to President Trump, CMS and Congress.

The report ends by noting that regulations are needed to support the safe delivery of care. “However, the outsized growth of staff and resources devoted to regulatory and compliance-related functions illustrates that a step back is needed: federal agencies should review and streamline requirements to reduce overhead cost of health care and allow providers to focus on their mission of caring for patients.”

At MMP, we understand the regulatory burden our clients are faced with daily. This is why we publish our weekly e-newsletter and why our mission is Making Health Care Make Sense.