CLIENT ADVISORY: CMS Regulatory Reduction Proposal for Hospitals and Other Providers

This advisory provides a brief overview of proposed revisions to current CMS regulations and their potential effect on various practices and procedure if adopted. The proposed changes would eliminate Medicare regulations identified as unnecessary, obsolete, or excessively burdensome on health care providers and suppliers. The full text for the proposed revisions can be found here.

The proposed regulatory changes of interest to hospitals and related outpatient providers include the following:

Emergency Preparedness for All Medicaid & Medicare Suppliers & Providers

  1. Annual Review and Training

    CMS proposes to implement a required biennial review of emergency preparedness plans and policies, rather than the current annual requirement. Facilities will be required to conduct emergency preparedness training biennially, rather than annually, following the initial training on emergency preparedness.

  2. Documentation of Cooperation Efforts Requirements

    Under this proposal, facilities are not required to document efforts to contact local, tribal, regional, State and Federal emergency preparedness officials in collaborative and cooperative planning efforts. However, facilities must implement a process to cooperate with emergency preparedness officials to ensure an “integrated response” in a disaster or emergency situation.

  3. Annual Emergency Preparedness Testing

    Inpatient Providers: CMS proposes that facilities may choose one of their two annually required testing exercises. These choices include: a community-based-full-scale-exercise, an individual facility-based functional exercise, a tabletop exercise, or a workshop that includes a facilitated group discussion.

    Outpatient Providers: CMS proposes to require only one testing exercise annually. There must be a community-based-full-scale-exercise or an individual facility-based functional exercise every other year, but in the opposite years providers may choose between a community-based-full-scale-exercise, an individual facility-based functional exercise, a tabletop exercise, or a workshop that includes a facilitated group discussion.

Ambulatory Surgical Centers (ASC)

  1. Patient Hospital Transfers

    CMS proposes that ASCs are not required to have written hospital transfer agreements or hospital physician admitting privileges. However, this proposal does not preclude an ASC from obtaining transfer agreements or admitting privileges when possible. This change has no effect on the requirement that ASCs have effective procedure for transferring patients who need emergency services beyond the scope of the ASC, and that the hospital must meet Medicare requirements for payment of emergency services.[1]

  2. Patient Assessments & Records

    Currently, ASCs are required to ensure that a qualified practitioner provide a comprehensive history & physical (“H&P”) within 30 days of every scheduled surgery. The proposed rule removes this requirement, and replaces it with requirements that defer to the facility’s established policies for pre-surgical medical histories and examinations. As proposed, each ASC must identify which procedures and patient profiles dictate a pre-surgical H&P taken prior to surgery.

    Further CMS seeks to limit medical record requirements laid out in § 416.47(b) to only require “significant medical history and results of physical examination” as applicable based on the above identified policies. [2]

Home Health Agencies (HHA)

  1. Patient Rights

    The proposed revision limits the requirement for verbal notification of patient rights to only include rights related to payments made by Medicare, Medicaid, and other federally funded programs, and potential patient responsibility. This revision does not eliminate the requirement that notice of patient rights be supplied in writing.[3]
  1. Home Health Aide (“HHA”) Services

    Currently, a full competency evaluation is required when an aid is found deficient in one or more skills. The proposal eliminates this requirement and replaces it with a requirement for “retraining and a competency evaluation directly related to the deficient skills.”[4]
  1. Clinical Records

    The proposed revision eliminates a recent requirement that upon request, an HHA must make clinical records available at the next home visit. The proposal retains the requirement that requested copies of clinical records must be provided within four business days. [5]

Diagnostic Imaging Facilities (Portable X-ray Services)

  1. Requirements for Orders

    CMS proposes to remove the requirement that orders for portable x-ray services are written and signed. This change allows portable x-ray providers to receive orders by telephone or electronically. Both the prescribing practitioner and the x-ray service provider must document all electronic and telephone orders in the patient record. Orders still must contain an explanation on why the test is medically necessary.[6]
  1. Personnel Requirements

    CMS seeks to remove various school accreditation requirements that are only limited to portable x-ray technologists. CMS wants to remove these provisions of 42 C.F.R. § 485.104(a)(1-4) and align them with the qualifications required for radiological technologists in hospitals.[7]


  1. Quality Assessment & Performance Improvement (QAPI)

    This proposal will allow the governing body of a multi-hospital system to elect a “unified and integrated” program to ensure that each member hospital complies with QAPI standards. This unified program must comply with state requirements and address the unique needs, factors, and localized issues of each member hospital. [8]

  2. Medical Staff, Medical Records, & Surgical Services

    CMS proposes that hospitals be allowed to make an exception for outpatient procedures under the general requirements for H&Ps prior to surgeries or procedures. Under the proposed rule, each hospital must identify which outpatient procedures and patient profiles dictate a pre-surgical history and examination taken prior to surgery, and in what timeframe. All H&Ps must be completed by a physician. All policies and procedures must comply with nationally recognized standards of practice and guidelines, and applicable state law.[9]

  3. Infection Control

    Similar to the proposal for QAPI programs, a multi-hospital system (with a governing body that is legally responsible for two or more hospitals) would have the discretion to implement an “Unified and Integrated Infection Control” program. This unified program must comply with state requirements and address the unique needs, factors, and localized issues of each member hospital. [10]

  4. Autopsies

    The proposal removes the requirement that hospital staff should attempt to obtain autopsies in all cases of unusual deaths and of medical-legal interest. Instead, hospitals will defer to state policies regarding autopsy requirements. [11]

  5. Special Requirements for Psychiatric Hospitals

    Under this proposal, non-physician practitioners, including physician assistants, nurse practitioners and clinical nurse specialists, acting within their scope of practice, have the authority to record progress notes for psychiatric patients.

Critical Access Hospitals (CAH)

  1. Disclosure Requirements

    CMS proposes to remove the requirement that CAHs disclose the names of people with a financial interest in the hospital. However, CAHs must include ownership information in the provider agreements mandated by rule 42 C.F.R. § 489.53(a)(8).[12]

  2. Annual Review of Policies & Procedures

    To ensure that CAHs and their personnel are operating within state and federal regulations, CMS requires annual reviews of all policies and procedures. Under this proposal, reviews are only required biennially. [13]

The CMS proposal anticipates an estimated annual cost savings of $1 billion for the above regulatory changes and those affecting all provider groups. These outweigh the anticipated implementation cost of $64 million. Comments regarding the proposed changes are due by November 19, 2018. Should you have questions concerning the above proposal, please contact Peter Mellette, Harrison Gibbs, or Elizabeth Dahl at Mellette PC.

Mellette PC notes with appreciation the assistance of Jacquelyn Miner (William & Mary Law class of 2019) in the preparation of this advisory.

This Client Advisory is for general educational purposes only. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.


[1] 42 CFR § 416.41(b)(3)(i)-(ii)

[2] 42 CFR § 416.52(a)(1)-(4)

[3] 42 CFR § 484.50(a)(3); (c)(7)

[4] 42 CFR § 484.80(h)(3)

[5] 42 CFR § 484.110(e)

[6] 42 CFR § 485.106

[7] 42 CFR § 485.104. See 42 C.F.R. § 482.26(c)(2).

[8] 42 CFR § 482.21

[9] 42 CFR §§ 482.22; 482.24; 482.51

[10] 42 CFR § 482.42

[11] 42 CFR § 482.22(d)

[12] 42 CFR § 485.627(b)(1)

[13] 42 CFR § 485.635(a)(4)

Categories: Client Advisory