Ready, Set, Stop: What to Do When a Regulation is Unexpectedly Delayed, Repealed, or Otherwise Abandoned

By Lisa Larson-Bunnell
JD, MHA, CPHRM, CHC

When new laws are passed and new regulations promulgated, a lot of time and effort go into compliance.  But, what happens when regulations you have worked hard to implement are suddenly put on the back burner.  In some cases, it may simply be a postponement.  In other cases, the regulation may be abandoned altogether.

Depending on the regulation, Compliance leaders are faced with three choices.  You may:

1. Abandon mission entirely, foregoing all of the work previously completed;
2. Keep working as if nothing happened; or
3. Announce the delay and continue working on a modified timetable.

For example, the recent Centers for Medicare and Medicaid Services (“CMS”) requirement to attach a JW modifier to claims with drug waste had several implementation extensions before finally going into effect on January 1^st of this year[i].  These postponements are typically the result of industry backlash and are often expected.  But, what about delays that are less predictable, such as those that result from judicial oversight?

Recently, two major regulations were halted, at least temporarily, by the federal district courts.  The first was the overtime rules promulgated by the Department of Labor.[ii]  The second was portions of Section 1557 of the Affordable Care Act (“ACA”) and the corresponding rules set forth by CMS.[iii]  In both cases, complying with the regulations took a great deal of effort on the part of affected institutions.   Also, in both cases, the injunction was issued within days of the compliance deadline.

A current example is everything related to the ACA.  As of this writing, Congress is moving forward with a “repeal and replace” strategy, and it is difficult to tell which portions of the ACA will survive.  ACA Section 1557 provides civil rights protections to patients including a requirement that a provider’s non-discrimination notice be posted along with CMS approved language translations instructing patients and visitors on how to obtain interpretive services.

Organizations should be in compliance with the major requirements of this regulation, as it went into effect in mid-2016.  However, there are other components of section 1557 that were more ambiguous.  The prohibition on discrimination based on sex, for example, was intended to be read broadly.  CMS provided some examples of activities that would be considered gender discrimination in sub-regulatory guidance, but the plain language of the regulation did not go far enough to push most providers to action.  Frankly, if you ask a provider whether they regularly discriminate based on a patient’s sex, they will tell you they absolutely do not.  But, the reality is that the intended protections would require major cultural change at some institutions.   Therefore, it is the type of regulation that would require on-going training and monitoring to truly comply.

To add to the complexity, in early January of this year, a federal court issued a temporary, nationwide injunction that halted enforcement of the sex (as defined to include gender identify) and pregnancy discrimination portions of this regulation.  The ACA still has a provision that prohibits discrimination based on sex, but the scope of that prohibition is unclear.

What should your organization do now?  In order to determine which decision to make, you should consider the following questions (in no particular order):

• How much more work is required for initial compliance? How much work is required for on-going compliance?
• Does the regulation benefit your organization or your customers? That is, even if the regulation is repealed, would compliance with the intended regulation benefit you or your customers?
• Does the regulation harm your organization or your customers?
• Does the benefit of implementation outweigh the cost to the organization, including the cost of continued compliance?
• Would complying with the proposed regulation put you out of compliance with any regulations that are currently in place?
• Is the regulation likely to be implemented at a later date?

Based on the analysis above, organizations have flexibility in deciding how to respond to this uncertainty.  Perhaps the best, and most unexpected, benefit of such a delay is that you now have time to reflect.  You are no longer in a position where you are being forced to do something, at least not immediately.  Now is the time to determine whether the proposed change is the right thing to do for your organization.

[i] CMS Pub 100-04, Medicare Claims Processing Manual, Transmittal 3508.  Published April 29, 2016.  See also Transmittal 3530 and Transmittal 3538.

[ii] Nevada v. United States DOL, 2016 U.S. Dist. LEXIS 162048, 167 Lab. Cas. (CCH) P36, 489, 27 Wage & Hour Cas. 2d (BNA) 25, 2016 WL 6879615 (E.D. Tex. Nov. 22, 2016).

[iii] Franciscan Alliance, Inc. v. Burwell, 2016 U.S. Dist. LEXIS 183116 (N.D. Tex. Dec. 31, 2016).  Available at: http://premiumtaxcredits.wikispaces.com/file/view/Franciscan%20Alliance%20PI%20order.pdf/602930830/Franciscan%20Alliance%20PI%20order.pdf

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