CMS proposes broad rollback of conditions of participation

 CMS proposed a sweeping deregulation rule Nov. 5 that would remove hospital staff training requirements tied to Biden-era obstetric standards. It would also roll back several nursing home requirements, rescind a Medicaid payment transparency rule and exempt certain critical access hospitals from distance requirements.

The proposed rule follows a CMS review of the conditions of participation for all 21 provider and supplier types. Providers must meet these baseline standards to bill Medicare and Medicaid.

CMS said the rule is meant to eliminate obsolete or excessively burdensome requirements so healthcare organizations can devote more time and resources to improving patient care.

The agency estimates the proposals would save $320 million a year and return more than 3.26 million hours of staff time to providers. Nursing homes would see the largest share at $142.6 million a year. Hospitals would save $123.2 million, CAHs $16.6 million and intermediate care facilities for individuals with intellectual disabilities $6.6 million. Rescinding a Medicaid payment reporting requirement accounts for another $30.4 million.

Eleven things to know:

Hospital obstetric and emergency standards

1. Hospitals would no longer have to train staff on transfer protocols and emergency services readiness. Both requirements have been in effect since July 1, 2025. The rule would also remove the OB care staff training requirement, set to take effect Jan. 1, 2027.

2. CMS said the ongoing burden of the training requirements outweighs their benefit. Other rules would still apply, including written transfer policies, EMTALA, accreditation standards and quality improvement requirements. The 2025 outpatient rule estimated that the emergency services readiness training alone would cost hospitals about $173 million and 1.6 million staff hours a year. CMS also cited financial pressure on rural hospitals.

3. Hospitals would no longer have to meet OB-specific quality assessment and performance improvement requirements, which were also set to take effect in 2027.

4. CMS created the obstetric conditions of participation in its 2025 outpatient payment rule to address potential gaps in training, staffing, transfer protocols and emergency readiness. The proposed cuts do not include the OB organization and staffing standards. Hospitals pushed back when CMS first proposed the standards in 2024. The American Hospital Association said it was “deeply concerned” that the agency was using the conditions of participation to advance its policy agenda.

5. The rule would also add a new OB requirement. Hospitals and CAHs that provide OB care would need informed consent standards for birth tissue collection, including the placenta and cord tissue. They would also need policies for families who request their birth tissue for cultural, religious or personal reasons. CMS cited an advocacy group estimate that birth tissue procurement organizations collect about 100,000 placentas a year. It also said these tissues are often marketed to the public in misleading ways.

Critical access hospitals

6. CAHs would no longer have to meet the emergency services readiness or OB staff training requirements, or the OB-specific quality improvement requirements.

7. The rule would implement Section 241 of the Consolidated Appropriations Act of 2026. That provision exempts certain CAHs from distance requirements: those designated as of Jan. 1, 2024, that received a CMS noncompliance notice between Dec. 1, 2024, and Jan. 1, 2026. CMS identified four facilities that qualify. The agency said the exemption is not time-limited. The rule would also make permanent CMS’ policy of measuring distance only to hospitals that provide acute inpatient care or to other CAHs.

Nursing homes

8. Nursing homes and ICFs/IID would no longer have to educate staff about the COVID-19 vaccine, offer it to them or document those actions. Nursing homes’ ongoing respiratory illness reporting would end, but reporting would still be required during a future public health emergency declared by the HHS secretary.

9. Existing facilities would be exempt from the standards that limit resident rooms to two residents and require each room to have its own bathroom. CMS said the renovations needed to meet these standards can discourage new operators from reopening older buildings.

10. CMS would rescind the requirement that states report the share of Medicaid nursing facility and ICF/IID payments spent on pay for direct care workers and support staff. The requirement came from the Biden administration’s 2024 nursing home staffing rule. When CMS repealed that rule’s minimum staffing standards in December 2025 it left the transparency requirement in place. CMS estimates that rescinding it would save providers $30.4 million a year.

Facility design

11. Hospitals, CAHs, nursing homes, hospice inpatient facilities and other providers would no longer need exterior windows or doors in patient care areas for natural light and ventilation. CMS would also adopt the 2024 editions of the National Fire Protection Association Life Safety Code and Health Care Facilities Code, along with the 2022 emergency and standby power systems codes.

Comment solicitations

CMS is accepting comments on the proposed rule through Jan. 9. The agency is also asking for comment on several topics it is not yet proposing changes on. These include:

• Loosening physician supervision of certified registered nurse anesthetists
• Expanding the scope of practice of nurse practitioners and physician assistants in nursing homes
• Lowering barriers to certifying new transplant programs
• Reducing the burden of respiratory illness reporting for hospitals and CAHs
• Future policies to address Medicaid institutional workforce shortages

See the full rule here.

https://www.beckershospitalreview.com/legal-regulatory-issues/cms-proposes-broad-rollback-of-conditions-of-participation-11-notes/