Report: Hospitals suffering from regulatory overload
- Hospitals, health systems and post-acute care (PAC) facilities are drowning in regulations, according to a new report by the American Hospital Association (AHA), which counts a staggering 629 distinct requirements across nine domains.
- Of those, 341 requirements are hospital-related and 288 pertain to long-term care facilities, home health agencies and other PACs.
- The annual cost of administrative activities associated with regulatory compliance to these requirements is nearly $39 billion. For an average-size community hospital, yearly spend approaches $7.6 million — $9 million if the hospital includes PAC beds.
Seen through another lens, regulatory adherence costs hospitals $1,200 each time a patient is admitted, the AHA says.
Doctors spend nearly six hours a day on EHR-related tasks — 4.5 hours during office hours and 1.4 hours after closing, according to a recent study. The growing administrative burden has been linked to physician burnout and a chorus of calls for regulatory relief.
The AHA is likely to find a willing partner for reducing regulatory burden in the HHS under President Donald Trump, who has made rolling back regulations across all industries a priority.
The report looks at regulatory burden across nine domains: quality reporting, new models of care/value-based payment models, meaningful use (MU) of EHRs, hospital conditions of participation (CoP), program integrity, fraud and abuse, privacy and security, post-acute care and billing and coverage verification. All of the requirements stem from four agencies: the CMS, the HHS Office of Inspector General, Office for Civil Rights and Office of the National Coordinator for Health Information Technology.
Among the report's key findings:
- An average-sized hospital devotes 59 full-time equivalents on regulatory compliance.
- Providers spend the largest share of time and resources on CoP compliance and billing and coverage verification process.
- An average-sized hospital spends nearly $760,000 annually to meet MU requirements and another $411,000 in related technology upgrades.
- Quality reporting requirements are often duplicative and inefficient, especially for providers using value-based purchasing.
Additionally, the report says hospitals struggle with the frequency and pace of regulatory change and with outdated fraud and abuse laws that don’t support new care delivery models.
“The regulatory burden is substantial and unsustainable, and reducing the administrative complexity of health care would allow providers to spend more time on patients, not paperwork,” Rick Pollack, president and CEO of the AHA, said in a statement.
To reduce the burden and improve care coordination, the group recommends a number of actions, including suspending the hospital star ratings on CMS’ website, ending Stage 3 MU of EHRs and providing more regulatory flexibility in value-based payment models.
The AHA has been a frequent critic of the star ratings program, questioning the “conceptual underpinning” of the program and the accuracy and reliability of CMS’ methodology for ranking hospitals. In June, the AHA asked the agency to suspend the program altogether.
The report also calls for elimination of the 96-hour rule as a condition of payment for critical access hospitals. Under the rule, physicians must certify that Medicare or Medicaid beneficiary can be reasonably expected to be discharged or transferred to another hospital within 96 hours of admission.
- American Hospital Association Regulatory Overload: Assessing the Regulatory Burden on Health Systems, Hospitals and Post-Acute Care Providers