Healthcare Trend Watch — CMS Is Changing Course

April 1, 2021
April 1, 2021

This post is taken from an article by Robin L. Rose, MBA VP, Healthcare Resource Group, HealthStream, where she looks ahead at the coming year, with an eye to big picture trends that could have a significant impact on how we provide and experience care.

CMS is changing course.

In late 2017, the American Hospital Association (AHA) released a report entitled, “Regulatory Overload” documenting the burden government regulation was placing on the healthcare industry. Here are some staggering statistics:

  • Health systems, hospitals, and post-acute care providers face 629 discrete regulatory requirements, including 341 hospital-related requirements and 288 PAC-related requirements.
  • Hospitals and other providers spend nearly $39 billion a year solely on the administrative activities associated with regulatory compliance.
  • An average 161-bed community hospital spends close to $7.6 million annually on those administrative activities—for those with PAC beds the number swells to about $9 million.
  • Regulatory compliance costs about $1,200 every time a patient is admitted to the hospital.
  • The average community hospital needs 59 FTEs to meet requirements. PAC regulations require an additional 8.1 FTEs.

In the report, the AHA recommended a number of regulatory changes to ease the burden on the U.S. healthcare system, such as suspending hospital star ratings and cancelling Stage 3 of meaningful use.

In response, Seema Verma, CMS’ new administrator, has been open to change. “We recognize that some regulations are necessary to ensure patient safety, quality and program integrity, but many are redundant, ineffective and have a negative effect on patient care by taking providers away from their primary mission— improving their patients’ health outcomes… the agency is continuing to “move away from a fee-for-service approach to a system that is value-based and that rewards value over volume” (Verma, 2018).

Verma has introduced a “Patients over Paperwork” initiative, that directs federal agencies to “cut the red tape” to reduce burdensome regulations. Some of the changes included in this initiative are:

  • Scaling back on the documentation required of E/M visits
  • Reducing the quality measure reporting
  • requirements for hospitals to receive Medicare reimbursements
  • Cancelling the mandatory bundled payment program for certain conditions
  • Making compliance with Meaningful Use Stage 3 optional
  • Reviewing Stark Laws that may be hindering telehealth and value-based care


Additional Healthcare Trends to Watch

Other trends identified in this article include:

  • Amazon is becoming a major disrupter in many areas of healthcare
  • Healthcare costs are becoming scarier than the illness itself.
  • We need to prepare for new health risks from weather and other disasters.
  • Artificial Intelligence (AI) is dramatically changing healthcare
  • We are finally addressing population health.
  • We need more joy in the work of healthcare.
  • The nursing shortage is getting worse.
  • Physicians are in short supply too.
  • Digital healthcare organizations are emerging.



“Regulatory Overload,” American Hospital Association, 2017,

Verma, Seema, “CMS’s Verma Discusses Regulatory Relief, Move to Valued-based Payment,” American Hospital Association, May 17, 2018,


Download the complete article here.