Presidential Order Aims to Cut Down on Regulations, But What Will it Really Mean?
The healthcare industry is optimistic that the “one-in, two-out” executive order will relieve them of some onerous regulations — but remains uncertain about the end results.
On January 30, President Donald Trump signed Executive Order 13422, specifying that when any federal department or agency issues a new regulation, it has to identify two that will be eliminated and offset the cost of the new regulation.
“We all wish we knew what the rule will mean for healthcare,” says Deborah K. Hale, CCS, CCDS, president of Administrative Consultant Services, a Shawnee, OK, healthcare consulting firm. “Hospitals must comply with numerous regulations that are time-consuming and don’t have much value when it comes to patient rights or quality of care,” she adds.
Rick Pollack, president and chief executive officer of the American Hospital Association, expressed support for the executive order as a way to allow providers to spend more time on patients, not paperwork. He pointed out that in 2016, the federal government added 23,531 pages to the regulations that affect hospitals and health systems.
“Excessive red tape not only stands as a barrier to care, but as a key driver of cost. Reducing the burden would not only provide relief, but would also provide an opportunity to make care more patient-centered than ever before,” he says.
The idea is very appealing, considering the massive regulatory burden the healthcare industry works under, says Elizabeth Lamkin, MHA, chief executive officer and partner in PACE Healthcare Consulting, LLC, based in Beaufort County, SC. But, she adds, “the devil is in the details.”
She points out that multiple agencies publish rules that affect healthcare. These include the Office of Inspector General, CMS, the Office of Civil Rights, and the Department of Health and Human Services, among others.
In addition, when one agency eliminates regulations or issues new ones, there can be a downstream effect on other organizations, she points out. For instance, if an insurance industry regulation is overturned, it may have an effect on hospitals, she says.
“This executive order has not been fully vetted and understood. The White House issued interim guidance Feb. 7, but says that it is subject to change,” says Steven Greenspan, JD, LL.M, vice president of regulatory affairs for Optum Executive Health Resources in Newtown Square, PA.
The executive order specifies that regulations that are discontinued must offset the cost of the new regulation, until fiscal year 2017 ends on Sept. 30. Beginning Oct. 1, 2017, the cost of the new regulation versus the two being eliminated has to be less than zero. In addition to regulations that are in effect, regulations that were proposed but not implemented before noon on Jan. 20, 2017, may also be eliminated as part of the two-for-one swap, Greenspan says.
The new executive order specifies that the regulations that apply to the requirement must be “significant.” The order does not define “significant” but refers to a previous order, Executive Order 12866, signed by President Bill Clinton in 1993. The earlier order defines “significant” as any rule that “may have an annual effect on the economy of $100 million or more,” Greenspan points out.
Interim guidance states that all the requirements under Executive Order 12866 are still applicable. The interim guidance called for an eight-day comment period, but the comments have not been made public.
“One big question is what this will mean for Medicare, but nobody is sure yet,” Greenspan says. “Everything I’ve heard or read indicates that Medicare regulations may be spared,” he adds.
The White House guidance states that, “in general, Federal spending rules that primarily causes income transfers from taxpayers to program beneficiaries (eg. rules associated with Pell grants and Medicare spending) are considered ‘transfer rules’ and are not covered.”
“Statements by the government say that it also will be very difficult to eliminate regulations mandated by law or statute,” Greenspan says. He adds that the Recovery Audit program was authorized by the Medicare Modernization Act of 2003. However, he points out that Tom Price, the new HHS secretary, may consider rolling back some regulations on his own even without enacting a new regulation.
The Affordable Care Act is also primarily payment-related and it may not qualify to be included under the executive order, Greenspan says.
Even if Medicare regulations are eligible for elimination under the “one-in, two-out” rule, it may be difficult to identify individual rules that result in $100 million in costs per year, Greenspan says.
The yearly Inpatient Prospective Payment System (IPPS) rule might qualify, he points out. “But it doesn’t make much sense for the Centers for Medicare & Medicaid Services to do away with the IPPS unless they are going to replace it with a different method of reimbursement,” he adds.
Not much is likely to happen affecting Medicare until CMS has its new administration in place and the staff starts to look at new regulations, Greenspan says.
Lamkin expresses hope that the industry as a whole can work together to develop a roadmap to follow. “Hospitals, physicians, vendors, insurance, government, and the public need some agreement on what regulatory changes will be made and understand the implications for all stakeholders,” she says.
“This is, perhaps, an historic opportunity for the healthcare industry to work with the government to reach the goals everyone wants — lower cost with better outcomes for all Americans. But it will take a massive effort with all the parties at the table and with no sacred cows,” Lamkin says.
The healthcare industry is optimistic that the “one-in, two-out” executive order will relieve them of some onerous regulations — but remains uncertain about the end results.
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