September 12, 2018

One way to reduce healthcare costs is to reduce the time and resources providers and clinicians are forced to spend complying with the plethora of government healthcare regulations.  This is the stance of the American Hospital Association (AHA) and other industry groups, which assert that healthcare organizations and professionals could do a better job, more cost effectively, with relief from the enormous regulatory burden that interferes with their focus on healthcare’s mission of promoting health and managing and treating illness.

An AHA report published last year concluded that regulatory requirements cost hospitals, health systems and other providers close to $39 billion annually, $7.6 million per year for an average community hospital and $1,200 for every patient admission.  The report also found that the average hospital must dedicate 59 full-time equivalents (one-quarter of which are physicians and nurses) to regulatory compliance.  Hospitals, health systems and post-acute care facilities must comply with 629 regulatory requirements across nine domains.

As part of its Provider Statutory and Regulatory Relief Initiative, of which the report is a component, the association has been working with members of the House Ways & Means Committee, whose Subcommittee on Health launched its own initiative last year called the Medicare Red Tape Relief Project, also with the goal of reducing legislative and regulatory burdens on Medicare providers.

Based on hearings, and with input from the AHA as well as other stakeholders, the Subcommittee has since sent recommendations to the Centers for Medicare and Medicaid Services (CMS) addressing the following areas, among others:

• Streamlining and eliminating burdensome and/or outdated Conditions of Participation, the requirements that hospitals must meet to participate in Medicare and Medicaid.
• Eliminating the 25% Rule, which CMS took steps to eliminate this summer.  The 25% Rule requires that if more than one-fourth of a long-term care hospital’s patients came from a single acute-care hospital, the long-term care hospital receives a reduced Medicare reimbursement rate for patients exceeding that threshold.
• Modernizing and revising the Stark Law to align it more closely with the goals of value-based care.  CMS issued a request for information in June asking healthcare providers to describe ways the law could be changed to support the goals of value-based reimbursement and alternative payment and care delivery models.
• Revamping the Star Ratings program to create a more meaningful rating system that provides a more accurate reflection of hospital and clinician performance.
• Continuing to improve the Meaningful Measures program, a CMS initiative that applies cross-cutting criteria to every quality measure in the Quality Payment Program to guide the removal of lower value quality measures while keeping measures that create less burden and provide the most meaningful indications of quality care.

Detailed information on the AHA’s current advocacy agenda, including its efforts to promote regulatory relief, can be found here.