On July 16, 2012, in response to the President’s Executive Order directing federal agencies to achieve a more streamlined and efficient regulatory framework for hospitals, a final rule revising hospital and critical access hospital (CAH) Conditions of Participation (CoPs) became effective. The CoPs revisions are expected to reduce the total regulatory burden for hospitals and CAHs by nearly $940 million initially and $5 billion over the next 5 years.

Hospital Governing Body & Medical Staff Requirements

The final rule included two significant substantive changes to the hospital governing body requirements that had not been previously addressed in proposed rulemakings. First, the Centers for Medicare & Medicaid Services (CMS) now permits one governing body to oversee multiple hospitals in a multi-system hospital system; and second, CMS added a requirement that at least one member of a hospital’s medical staff be included on the governing board to ensure effective communication and coordination between a single governing body and the medical staffs of individual hospitals in the system.

These changes drew immediate criticism from the American Hospital Association (AHA), which offered a letter decrying the final rule as a violation of the Administrative Procedures Act (APA) because hospitals and other stakeholders had no notice that CMS was considering these revisions and could not adequately comment on them. CMS responded, noting the numerous questions and concerns raised by various stakeholders regarding the revised regulation requiring inclusion of one or more members of the medical staff on a hospital’s governing body. Given the “complexity of the issues that have been raised” and the “interaction of this requirement with other Federal, State, or local laws,” CMS stated its intention to carefully review comments and reconsider the requirement in future rulemaking. Additionally, Medicare-approved hospital accreditation programs are not expected to revise their accreditation standards related to this rule until it has been addressed completely by CMS.

What Hospitals Should Do Now

Hospitals should continue to monitor CMS guidance on this issue and postpone any significant changes to board composition until interpretive guidelines are released. However, hospitals should consider how to implement the revised CoPs if they are confirmed by CMS in the future. In addition to including at least one medical staff member on its governing board, hospitals’ corporate bylaws and medical staff rules and regulations must be updated to reflect the new CMS requirements. Hospital culture, medical staff privileges and prerogatives, and roles of other hospital practitioners should be considered when amending corporate documents. Where a governing board oversees more than one hospital, it would not be required to have a representative from each hospital’s medical staff on the board. Rather, a single medical staff member from one of the medical staffs must be included on the board. Further, the CoPs revisions do not change the requirement that a hospital maintain separate medical staffs and executive committees for each individual National Provider Identifier (NPI). To read more about the final rule, click here.