Monday, October 24, 2011

CMS Proposes Regulatory Reduction Rules

On October 18, the Centers for Medicare & Medicaid Services (CMS) took steps to reduce unnecessary, obsolete, or burdensome regulations on American hospitals and healthcare providers. These steps would help achieve the key goal of President Obama’s regulatory reform initiative to reduce unnecessary burdens on business and would save nearly $1.1 billion across the health care system in the first year for a total of over $5 billion over 5 years.

CMS proposed two sets of regulatory reforms and finalized a third. All are designed to improve transparency and help providers operate more efficiently by reducing their regulatory burden. One set proposes updates to the Medicare Conditions of Participation (CoPs) for hospitals and critical access hospitals (CAHs). The second set addresses regulatory requirements for a broader range of health care providers and suppliers who are regulated under Medicare and Medicaid. CMS also finalized a third rule reducing regulatory burden for ambulatory surgical centers (ASCs).

CMS estimates that annual savings to hospitals from the proposed revisions to the Conditions of Participation could exceed $900 million in its first year as hospitals increasingly use this new flexibility. The Medicare Regulatory Reform rule could save up to $200 million in the first year. The final rule for ASCs could generate an extra $50 million in savings per year.

Taken together, these three rules would reduce hospital and other healthcare provider costs by nearly $1.1 billion the first year. These cost savings would come directly from reduced regulatory burdens, and are not accompanied by reimbursement reductions. As such, all of these savings would be available to help providers improve the quality of care they provide to Medicare beneficiaries and all Americans.

Click here to view the news release.

Source: CMS News Release

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