Changes to CMS’ Conditions of Participation Regulations for Providers Take Effect Nov. 29

November 12, 2019

Healthcare providers should begin finalizing plans to implement the Centers for Medicare and Medicaid Services’ Omnibus Burden Reductions (conditions of participation) final rule, which becomes effective Nov. 29, 2019. The final rule, issued Sept. 26, 2019, is intended to remove Medicare regulations, contained primarily in providers’ conditions of participation that CMS has identified as unnecessary, obsolete or excessively burdensome on healthcare providers and patients. The rule finalizes the provisions of three distinct proposed rules:

  • Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction (Omnibus Burden Reduction), published Sept. 20, 2018
  • Hospital and Critical Access Hospital Changes to Promote Innovation, Flexibility, and Improvement in Patient Care, published June 16, 2016
  • Fire Safety Requirements for Certain Dialysis Facilities, published Nov. 4, 2016

The final rule represents a continuation of CMS’ Patients Over Paperwork initiative to reduce regulatory burdens on the healthcare industry, as discussed in a July 9, 2019, McGuireWoods client alert.

CMS estimates that, within the first year of implementation, the changes made by the final rule will save providers and suppliers an estimated 4.4 million hours previously spent on paperwork and roughly $8 billion per year over the next 10 years. The final rule contains many revisions that impact a wide array of providers.

Below are key changes applicable to four specific provider types.

1) Hospitals

Upon implementation of the final rule, CMS will permit a hospital system (defined as a system consisting of two or more separately certified hospitals subject to a system governing body legally responsible for the conduct of each hospital), to elect to have a unified and integrated Quality Assurance and Performance Improvement (QAPI) program for all of its member hospitals subject to compliance with state and local laws. This change is intended to help hospitals increase efficiencies and eliminate some duplication of efforts

In the final rule, CMS also gave hospitals increased flexibility to establish a medical staff policy describing the circumstances under which such hospital can utilize a pre-surgery/pre-procedure assessment for an outpatient, instead of a comprehensive medical history and physical examination. If a hospital elects to establish such a policy, its pre-surgery/pre-procedure assessment must consider patient age, diagnoses, the type and number of surgeries and procedures scheduled to be performed, comorbidities, and the level of anesthesia required for the surgery or procedure, among other requirements. CMS believes these changes will benefit providers and patients by providing administrative and financial relief from current comprehensive pre-operative testing requirements, which are often unnecessarily performed on patients, particularly those patients undergoing only minor outpatient procedures.

2) Ambulatory Surgical Centers (ASCs)

In the final rule, CMS removed from the conditions for coverage (CfCs) requirement that ASCs either (i) have written hospital transfer agreements in place or (ii) require their medical staff physicians to have admitting privileges with a local hospital. While CMS will no longer mandate these requirements, the CfCs will still require ASCs to have an effective procedure for the immediate transfer of patients requiring emergency medical care beyond the capabilities of the ASC, to a local hospital that meets Medicare requirements for payment for emergency services.

As support for removal of the written hospital transfer agreement requirement, CMS noted the current requirement is unnecessary, obsolete and burdensome in light of the small number of patient transfers, existing requirements under the Emergency Medical Treatment and Labor Act, and the exhaustive administrative paperwork and negotiation burden that is required when a local hospital system refuses to sign the written hospital transfer agreement. Despite the removal of this requirement, CMS emphasized that it still believes it is important for ASCs and hospitals to communicate and encourages ASCs and hospitals with “functional working relationships” to maintain written transfer agreements. Further, CMS expects each ASC to periodically provide the local hospital with written notice of its operation and patient population served, including details such as hours of operation and the procedures that are performed in the ASC.

3) Transplant Centers

In response to concerns that present reporting requirements for transplant centers have resulted in fewer eligible patients receiving transplants, CMS’ final rule removed the requirement for transplant centers to submit data, clinical experience and outcome requirements for Medicare re-approval. CMS believes the removal of these requirements will lead to improved patient outcomes, increased transplantation opportunities for patients on the wait list, improved organ procurement for transplantation, greater organ utilization and reduced burden on transplant programs. CMS also noted that the removal of these requirements directly aligns with the U.S. Department of Health and Human Services’ Advancing American Kidney Health initiative, which seeks to increase access to kidney transplants, as discussed in a July 12, 2019, McGuireWoods client alert.

The rule does not make any changes to the QAPI program for transplant centers and CMS expects transplant programs to continue use their QAPI programs to monitor qualify of care, evaluate transplant activities and conduct performance improvement activities, as necessary.

4) Emergency Preparedness Requirements

Medicare and Medicaid providers and suppliers are now required to review and provide training on their emergency programs biennially, instead of annually, with the exception of long-term care facilities, which will still be required to review their emergency programs and provide training annually. Despite this change, CMS still expects facilities to update their emergency preparedness program more frequently than biennially if circumstances trigger the need for such an update — for example, if staff changes occur or lessons are learned from a real-life event or exercise. CMS believes these changes will give providers more flexibility to review and revise their plans based on their actual operational needs.

Bottom Line

The final rule offers regulatory relief to a wide array of healthcare providers. In addition to the categories discussed above, the rule includes a significant number of changes for home health agencies, hospices, comprehensive outpatient rehabilitation facilities, portable X-ray services, critical access hospitals, dialysis facilities and religious nonmedical healthcare institutions. Providers should review their existing policies and procedures to ensure they have revised them to implement the changes required under the final rule.

For more information regarding the new rule, please consult one of the authors.