HHS to Scrap Outdated Medicare Regulations

In a new move towards assisting the healthcare industry, the White House recently announced its intention to work with the Department of Health and Human Services (HHS) to focus on and eliminate certain regulations for Medicare and Medicaid that are now considered to be obsolete.  This is expected to significantly impact Medicare-Medicaid Reimbursement over time, particularly for the elderly patients that will be affected the most by these changes.  In a press release from the Department, Secretary Kathleen Sebelius noted that, “We are committed to cutting the red tape for health care facilities, including rural providers.  By eliminating outdated or overly burdensome requirements, hospitals and healthcare professionals can focus on treating patients.”

Proposed Deregulation

The primary emphasis of the plan advanced by the White House is a deregulation of certain elements of the healthcare industry, particularly on the administrative and oversight side of things.  While hospitals can continue to expect to provide documentation to Medicare according to current regulations, some hospital staff members will have reduced or eliminated requirements for performing their jobs.  Some professionals, such as dieticians, will be able to give patients a care plan without going through a primary care provider, while certain hospital nuclear technicians will be permitted to prepare medicine without specific oversight on the part of physicians.

Some other location requirements, including when certain physicians are required to be in a particular area, have also been put forward for modification or outright elimination.

Cost Savings

Recent actions by the administration, such as the 2.3% Medical Device Excise Tax, have been noted as placing significant financial burdens on manufacturers and hospitals.  The proposed scrapping of certain regulations reverses this trend, with the changes in Medicare-Medicaid Reimbursement and other modifications expected to save approximately $3.4 billion dollars throughout the industry over five years, or an estimated average of $676 million dollars annually.  The work hours and money expected to be saved by these measures could be placed directly into patient care or used to help offset recent tax increases, providing a small measure of relief for the industry.

Industry Reactions

Reaction by hospitals and manufacturers to the proposed changes have been primarily positive, with sources noting that removing outdated and ineffective regulations will allow hospitals to focus more attention on providing patient care and less time working under burdensome restrictions at a time when the healthcare industry as a whole is shifting towards patient satisfaction and overall level of care as a more primary measure for delivering Medicare-Medicaid Reimbursement.

However, despite the positive reactions, some groups and organizations feel that the proposed changes do not go far enough in eliminating outdated requirements.  As quoted by Reuters, the American Hospital Association has expressed disapproval of some remaining restrictions on the ways that hospitals can use their personnel and organize their staff structures.

Despite occasional reservations by some groups and individuals, most of those who have examined the proposals believe they are an overall improvement for the industry.

Further Opportunity

By allowing for some obsolete regulations to be removed from the healthcare industry, the Obama Administration has made it clear that changes will be permitted.  This offers an opportunity for the healthcare industry to focus on its current issues and provide the administration with a detailed explanation of other suggested changes and why the industry believes they would be appropriate to implement at this time.  If done effectively, the healthcare industry may have the opportunity to make the implementation of new regulations easier and less likely to create conflict with other regulations, with potential savings being significantly in excess of the amount already expected.

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