Monthly Archives: October 2011

New and Proposed CMS Rules Promise to Cut Costs

The Federal Register recently published a final rule and two proposed rules which eliminate certain regulatory burdens on health care providers and are expected to save health care providers more than $1.1 billion annually. These final and proposed regulations are part of the Obama Administration’s initiative to reduce “unnecessary and outdated” CMS rules which serve only to hinder productive work in private companies and limit growth in the economy.

The finalized rule, CMS-3217-F, revises the conditions for coverage (CfC) for ambulatory surgical centers (ASCs) to allow patient rights information to be provided to the patient, the patient’s representative, or the patient’s surrogate just prior to the start of a surgical procedure (as opposed to the earlier CfC requiring the ASC to provide notice of the patient’s rights in advance of the date of procedure). This change helps those ASCs which provide same-day surgical services and eliminates the added time and expense of providing a detailed list of patient rights during a separate office visit before the date of the surgical procedure. The rollback of this and other minor safety requirements in the rule are purported to save ambulatory surgery centers $50 million annually. Two other proposed rules are expected to continue this trend in accordance with the President’s Executive Order 13563.

The first proposed rule, CMS-3244-P, updates the Medicare Conditions of Participation (CoPs) required of hospitals and critical access hospitals to participate in the Medicare and Medicaid programs. This new proposal is expected to increase patient-centered care in hospitals and enhance care coordination.

One administrative-cost cutting change proposed is the elimination of a requirement that hospital systems create governing bodies for each individual hospital. Specifically, the rule proposes to revise 42 CFR 482.12 to state that “There must be an effective governing body that is legally responsible for the conduct of the hospital.” This provision would allow multi-hospital systems having more than one CMS Certification Number (CCN) to have just one governing board to provide comprehensive oversight across their hospitals.
Other proposed changes in CMS-3244-P include:
• Removing the requirement for a single director of outpatient services;
• Allowing critical access hospitals (which serve rural areas) to contract with other entities for laboratory and radiology services;
• Easing the reporting requirements for hospitals when the circumstances of a patient’s death involve only the use of soft two-point wrist restraints and no use of seclusion;
• Eliminating the requirement that a physician or non-physician (i.e., ARPN) be a member of a hospital’s medical staff in order for its governing body to grant practice privileges; and
• Expand the list of practitioners, to whom hospitals may assign certain management responsibilities over medical staff, to also include doctors of podiatric medicine (DPMs); and
• Revision of certain nursing service requirements to ease burden of developing two care plans and, also, allowing certain “standing orders” for drugs and biologicals.

The second proposed rule, CMS-9070-P, seeks to cut costs by cutting the list of emergency equipment that ASCs are currently required to keep on hand and eliminate some of the costly Federal Life Safety Code (LSC) requirements on certain structures. The savings to non-hospital providers and health care equipment suppliers is anticipated to save $200 million per year. Similarly, the rule proposes eliminated duplicative requirements pertaining to infection-control plans within 42 CFR 416.51 and 42 CFR 416.44.

Significantly, the rule proposes to remove a list of emergency equipment contained in 416.44(c) – which may be outdated or unnecessary – and, instead, require that ASCs develop their own policies and procedures specifying the types of emergency equipment that would be appropriate for the facility’s patient population, and make the items immediately available at the ASC to handle inter- or post-operative emergencies. The belief is that these proposed changes would enable ASCs to better meet current demands, while also giving them the flexibility necessary to respond to emergency needs and incorporate the use of modern equipment more suitable for their needs.

The rule also proposes to eliminate the automatic 1-year bar to re-enroll in the Medicare program in certain situations where the providers and suppliers have not timely responded to requests for revalidation of enrollment or other requests for information initiated by CMS. This change is based, in part, on the belief that the automatic bar is an unnecessarily harsh consequence in circumstances where a provider may not be aware of the CMS request due to misrouted mail or a clerical mistake. The rule proposes a less restrictive regulatory remedy available for addressing a failure to respond timely to a revalidation request. Additionally, the rule proposes to ease the deactivation and re-enrollment requirements if a provider does not submit a Medicare claim within a 12-month period.

The rule also proposes to ease many of the Federal LSCs covering End-Stage Renal Disease (ESRD) Facilities after finding many of them were duplicative of already existing state and local fire safety codes.

CMS will be accepting public comments on the proposed rules until December 16, 2011. If you have questions regarding any provisions contained in the proposed or final rules, or if you would like more information, one of the attorneys at Smith & Associates will be happy to assist you.