Medicare Hospital Rule Change to Save $5 Billion, U.S. Says

Hospital operators such as Community Health Systems Inc. (CYH) and Tenet Healthcare Corp. (THC) would have to meet fewer requirements to participate in Medicare under a cost- cutting initiative the Obama administration announced.

The streamlined rules are designed to save $5 billion in five years for hospitals that participate in the federal health program for the elderly and disabled, said Health and Human Services Secretary Kathleen Sebelius in a conference call today.

The reduction is part of a government review to reduce outdated or excessive regulations on business announced this year by President Barack Obama. Doctors will spend more time treating patients rather than dealing with bureaucratic duties, officials said.

“These changes will increase the amount of time professionals will have to take care of patients,” said Medicare Administrator Donald Berwick during the call.

Hospitals such as Community Health Systems, based in Franklin, Tennessee, and Dallas-based Tenet would have greater flexibility to manage patient care under one proposal estimated to save more than $900 million a year.

Critical-care hospitals would be permitted to contract out lab work. All hospital operators could allow nurses and physician assistants to perform more duties now restricted only to doctors and to use a single governing body for facilities in one system.

To contact the reporter on this story: Carol Eisenberg in Washington at ceisenberg1@bloomberg.net

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

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