Rule Overhaul to Save Health Industry Up To $640 Million, Medicare Says


On May 7, 2014, the U.S. Centers for Medicare & Medicaid Services (CMS) issued a long-awaited final rule in response to President Obama’s Executive Order (EO) 13563, “Improving Regulation and Regulatory Review,” which set as its goal reduction of health care delivery costs by streamlining Medicare and Medicaid regulations for hospitals and other providers. Following the proposed rule, which had been issued in early 2013, the final rule significantly affects regulations that impact a variety of health care facility types. The final rule was published in the Federal Register on May 12, 2014, and will become effective 60 days after publication, July 11, 2014 (but for one provision, which became effective upon publication).

The final rule “Medicare and Medicaid Programs; Part II—Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction” (Final Rule) contains reforms to existing Medicare regulations applicable to hospitals, ambulatory surgical centers (ASCs), intermediate care facilities for individuals who are intellectually disabled (ICF/ID), transplant centers and organ procurement organizations, long-term care (LTC) facilities, critical access hospitals (CAHs), rural health clinics (RHCs), federally qualified health centers (FQHCs) and laboratories [under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) regulations] in order to improve efficiency, improve transparency and reduce regulatory burdens for these provider types. The overall cost savings in the proposed rule is estimated to be $640 million per year.

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