Coming in 2018 are new value-based payment models based on hospital suggestions, along with changes to accountable care organizations, according to the CMS administrator.


Jan. 18—Hospitals will see some of their leading regulatory concerns addressed in 2018 by the Centers for Medicare & Medicaid Services (CMS), according to the agency’s leader.

Seema Verma, administrator of CMS, told the American Hospital Association (AHA) this week that the Trump administration is committed to reducing the regulatory burden on hospitals.

“I’m not sure how the healthcare system has been dealing with it over the years,” Verma said, referring to the large number of CMS rules. “But we are dedicated to trying to address that issue.”

The deregulatory commitment comes as hospitals are spending $39 billion annually to comply with federal rules, according to a 2017 AHA report. As part of that effort, the average hospital dedicated nearly 60 positions—including 15 clinicians—to regulatory compliance.

“Hospitals are constantly challenged to implement new or revised regulations all while keeping track of the old ones, and doing so as they meet and maintain their core mission of providing high-quality service,” said Rick Pollack, president and CEO of AHA.

Pollack said hospitals are increasingly frustrated with the time and resources being devoted to “pushing paper” that has little to do with improving the quality of care or access to services.

CMS’s Plans

Verma, who said a recent report on the growth in national health expenditures keeps her up at night, noted that regulations also increase healthcare costs. Her agency issues more than 11,000 pages of regulations every year, she said.

One area that CMS plans to address is conditions of participation (CoPs), which are requirements that hospitals and other providers must meet to participate in Medicare and Medicaid. Compliance with CoPs costs the average hospital more than $3 million each year, according to AHA.

“You will see changes in the conditions of participation,” said Verma, adding that CMS plans new “deregulatory” rules on streamlining CoPs.

Such changes were among the rule reductions most sought by hospitals that responded last year to a CMS request for information on ways to address the regulatory burden. Among the changes sought by AHA was that CoPs be evidence-based, aligned with other laws and industry standards, and flexible to support different patient populations and communities.

As part of revising CoPs, Verma has told CMS staff to visit hospital facilities to see for themselves ways that they can improve implementation of regulations.

Separately, the annual Medicare payment rules this year will include reductions in the quality measures that hospitals are required to report to CMS, Verma said.

Verma highlighted the case of one Ohio hospital that had to hire 18 staff members to extract the CMS-required quality measures from their electronic health record (EHR).

Verma has told her staff to examine every quality measure across CMS and ask whether it is needed, why it is important, whether it has “topped out,” and whether it is really achieving quality and value.

She also promised changes in the meaningful use requirements of the EHR Incentive Program, concerns with which are among the top issues she hears about from hospitals. The average hospital spends $760,000 just to comply with EHR requirements, according to AHA.

Already, CMS has replaced a full-year reporting requirement for the meaningful use program with a 90-day reporting period for FY18, and made compliance with Stage 3 of meaningful use optional.

Specific concerns that Verma has heard from providers regarding meaningful use include practice costs, the need to streamline requirements, and the need to promote greater interoperability—without holding providers responsible for the actions of others.

“You’re going to hear a lot more from us on that issue,” Verma said, referring to interoperability.

Verma said telehealth policy changes also are a priority. Although federal law has placed strict limitations on how telehealth is defined, CMS is trying to increase its use within those legal strictures.

“We recognize the potential of technology to improve the quality of care,” Verma said.

Another key regulatory burden that Verma has heard about from hospitals is the rules implementing the Stark Law and the Anti-Kickback Statute. Such rules present significant barriers to the implementation of some new innovative care-delivery models, Pollack said. AHA has urged CMS and the Office of Inspector General (OIG) to make the waiver program available outside of demonstration projects and models, and allow existing waivers to apply to similar arrangements with Medicaid or commercial payers.

Verma said the federal government must go beyond the anticompetitive-rules waivers that it has given to providers in accountable care organizations (ACOs). To identify ways to ease requirements, CMS plans to put together an interagency group—OIG and the Department of Justice also enforce such laws—to identify changes. She also acknowledged substantive changes may require federal legislation.

Value-Based Payment

Verma said CMS plans to aggressively move to value-based payment. Some industry watchers questioned that commitment after CMS scrapped two mandatory bundled payment models in 2017 and made another one optional for participants in some markets.

“We’re committed to moving away from a FFS [fee-for-service] system and moving toward a system that favors value and outcomes, Verma said.

Two issues that CMS plans to address are quality-reporting requirements in value-based models and the design of ACOs.

“You will hear more from us on accountable care organizations and how we are going to be looking at that program in a different way,” Verma said. “That’s coming soon.”

CMS also plans to look to submissions it received from industry stakeholders to another request for information regarding the design of new payment reform models. Among the recommendations from AHA was a dedicated model that tests coverage and payment changes that would lead to more effective and widespread adoption of virtual care strategies, according to a letter responding to the RFI.

“Over this coming year, we are taking that input and hope to put out some new models for folks to look at that are based on the input that we have been getting from the front lines,” Verma said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, January 18, 2018