Last year drew to a close with promises for the swift repeal and replacement of the Affordable Care Act after the inauguration of Donald Trump. Whether the result of partisan rancor, intraparty discord, or both, however, "repeal and replace" stalled in 2017. Proposed reform measures like the American Health Care Act, the Graham-Cassidy bill and the Alexander-Murray all fell short of passage because they either went too far or they didn't go far enough.
This means that healthcare providers look to 2018 with most of the same concerns they had when 2017 began. And many of these concerns focus on the substantial regulatory burdens that take valuable time away from patient care. The American Hospital Association (AHA) recently published a report titled "Regulatory Overload" that provides some insightful data to support what hospitals, physicians and other providers already know: there's a struggle to regulatory compliance demands with "the clinical, operational and financial activities necessary to fulfill their clinical missions."
The report pegs the cost of regulatory compliance industry wide at nearly $39 billion a year. This figure equates to an average annual cost of $1,200 per admitted patient or $47,000 per hospital bed. Collectively, healthcare providers must comply with more than 600 discrete regulatory requirements with the greatest number found in the areas of Conditions of Participation, Privacy and Security Rules, and Quality Reporting. To address this monumental compliance challenge, the report notes that an average size hospital dedicates 59 employees to regulatory compliance.
Advocating policy changes on behalf of the nearly 5,000 hospitals, health care systems, networks, other providers represented by the AHA, the document puts forth a number of bold recommendations that could influence healthcare legislative conversations in both the short and long terms. Notable among these are the AHA calls to:
- Cancel Stage 3 of meaningful use of electronic medical records. The AHA report claims "burdensome and unnecessary" meaningful use regulations provide "no clear benefit to patient care" and will only become "more onerous when Stage 3 begins in 2018."
- Suspend all regulatory requirements that mandate submission of electronic clinical quality measures. The report cites acknowledgment from CMS that "electronic test submissions by hospitals and physicians do not accurately measure the quality of care provided" and charges that CMS regulations "will double the electronic clinical quality measure reporting requirements for hospitals for 2017."
- Prohibit enforcement of burdensome requirements mandating "direct supervision of outpatient therapeutic services that "could harm access to care in rural and underserved communities"
- Create new exceptions and safe harbors for clinical integration arrangements under the Stark law and the Anti-Kickback Statute respectively that create.
While providers look for the loosening of regulatory tethers, there are other taxing issues to look forward to in the new year. In October the Internal Revenue Service announced that it would - for the first time - reject electronically filed tax returns if information is not provided indicating the individual's healthcare coverage. This news was followed in November by an announcement that the IRS has begun enforcing - again, for the first time - the employer mandate under which companies with at least 50 full-time employees must offer affordable health insurance to their employees or else face significant tax penalties.
As we were going to press, updated tax reform legislation was released by Senate Republicans that includes a provision to repeal the individual mandate established by the Affordable Care Act. It remains unclear, however, if there are enough votes to pass the revised tax bill or if we'll be seeing new versions with new provisions as the calendar turns to 2018. The IRS, in the meantime, has publicly stated that it is "obligated to enforce" elements of the Affordable Care Act with respect to the individual mandate and employer shared responsibility provision.
What happens next is an open question, but change is almost certainly on the horizon for healthcare providers in 2018. For now, though, all we can do is keep a watchful eye on healthcare regulatory developments in Washington, D.C. and across the country.
Colin Luke is a partner with Waller Law where he serves as Practice Group Leader for Healthcare Compliance and Operations.