Study: Compliance with Outdated Regulations Costs Inpatient Facilities $1.7 Billion Per Year

A study released this week by the National Association for Behavioral Healthcare estimates that certain federal laws and regulations, considered by many in the field to be outdated and inconsistently applied, are costing inpatient psychiatric facilities $1.7 billion per year in compliance costs.

NABH commissioned Manatt Health, a professional services firm, to survey 62 inpatient psychiatric facilities. Three federal regulatory domains required for Medicare participation were studied:

• “B-tag” requirements, a detailed set of standards for patient evaluations, medical records and facility staffing, defined in regulations by the Centers for Medicare & Medicaid Services (CMS)
• Requirements for addressing ligature risk points, as part of a condition of participation that requires all hospitals to provide care “in a safe setting”
• Emergency Medical Treatment and Labor Act (EMTALA), which requires hospitals to screen all patients for emergency medical conditions, and if such a condition is identified, stabilize the patient before discharge or transfer

While the regulations are designed to ensure patient safety and a standard of care, “some of them are now outdated and many of them are applied inconsistently by on-the-ground surveyors,” the report states. This has led to unpredictable citations.

The report advocates revisiting the regulations and considering revisions that reduce the burden on facility operators without significantly degrading patient care, thereby allowing operators to shift resources away from “compliance for compliance’s sake.” Among the proposed action items:

Revising B-tags. Noting that CMS’s conditions of participation were issued in 1966, with interpretative guidance following in the 1980s and no updates of either since, the report estimates B-tags have been responsible for $622 million in compliance costs per year nationally. The report proposes a commission to review the B-tags’ relevance, including requirements for treatment plans and progress notes, the appointment of nursing services directors, and patient psychiatric evaluations upon admission.

Ligature risks. With about 60% of responding facilities reporting ligature-related citations within the past two years—at an average cost over the past five years of more than $15,600 per psychiatric bed—the report calls for a standardization of ligature surveying practices, minimization of risk of redundant renovations, and clarification of design requirements for spaces under constant supervision.

EMTALA. The report recommends that CMS and the U.S. Department of Health & Human Services Office of Inspector General should ensure surveyors allow providers’ medical staff to decide which clinicians are competent to screen for emergency conditions, per “EMTALA’s clear direction” on the subject.

The full report is available for download on Manatt’s website.