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 Alaska SNF Advocate Tells Senate Panel of Need for Regulatory Relief

Becky Hultberg, president and chief executive officer of the Alaska State Hospital and Nursing Home Association told a Senate hearing on July 31 that hospitals, health systems, and post-acute care (PAC) providers are in need of regulatory relief from burdensome regulations that can have “harmful unintended consequences.”

She cited the unfunded mandates in the Requirements of Participation for skilled nursing facilities (SNFs) as a prime example of regulations in need of adjustment.

Appearing before the Senate Health, Education, Labor & Pensions Committee for the committee’s “Reducing Health Care Costs: Decreasing Administrative Spending” hearing, she said while the federal regulatory framework is intended to protect patients, it often fails to do so given the current system.

“The volume of regulation, complexity of the regulatory framework, and pace of change is overly burdensome on hospitals, health systems, and PAC providers,” Hultberg said. 

To back up her claim, she said around 24,000 pages of hospital and PAC federal regulations were published in 2016. Hospitals, health systems, and PAC providers must comply with 629 discrete regulatory requirements across nine domains, spending $39 billion annually in administrative activities related to regulatory compliance. 

“For an average-sized community hospital (around 160 beds), this equates to spending more than $7.5 million annually on regulatory compliance, with 59 staff dedicated to this purpose,” she said. “To put these numbers in the context of patient care, the regulatory burden costs $1,200 every time a patient is admitted to a hospital.”

And for SNFs, the annual cost of compliance with the Requirements of Participation issued in October 2016 is estimated at $735 million, or nearly $100,000 per building. “This is at a time when all-in margins for SNFs are less than 1 percent,” Hultberg said.

Beyond these direct costs, the federal administrative burden impacts what she said are opportunity costs, which are the next best thing that could be enhanced with the financial and human resources spent on something, or the value of the foregone alternative. 

“Financial and human resources spent in meeting regulatory compliance cannot be used for adding services, implementing patient safety initiatives, hiring health care professionals, or addressing community needs,” Hultberg said. “The opportunity cost of regulatory burden for rural hospitals and skilled nursing facilities may be the complete loss of these services in the community.”

To remedy the situation, she said the federal government could better align and apply regulatory requirements within and across federal agencies and programs; as well as offer clear, concise guidelines and reasonable timelines for the implementation of new rules. Hultberg said some examples for the committee to consider include Medicare Conditions of Participation for hospitals, the Promoting Interoperability Program, Stark Law and civil monetary penalties, and PAC regulatory reform. 

Specific for SNFs,“huge” new unfunded mandates to hire staff and establish compliance programs in the new Requirements of Participation would be difficult if not impossible for providers to implement, Hultberg said. 

“The Centers for Medicare & Medicaid Services [CMS] should revise the SNF Requirements of Participation to make them more outcome-focused and patient-centered,” she said. “We also recommend that the automatic revocation of CNA training if a facility receives a civil monetary penalty of a certain level be addressed through changes to federal statute.”

Also for SNFs, Hultberg urged Congress to address the requirement that 5 percent or a minimum of five facilities receive a federal survey each year. “This requirement unfairly penalizes small states with few facilities,” she told lawmakers.

The way to accomplish these changes starts with collaboration among stakeholders, she said. “Collaborative, voluntary quality improvement programs like the CMS Partnership for Patients and American Health Care Association Quality Initiative are delivering meaningful results. Resources on patient safety should be spent where they are delivering the best outcomes for patients,” she added.
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