The Centers for Medicare and Medicaid Services (CMS) issued on Thursday a long-awaited proposed rule aimed at reducing regulatory and administrative burdens across the health care industry, including nursing homes and other long-term care facilities.
“The agency identified obsolete, outdated, and excessively burdensome regulations that CMS proposes to eliminate or reform to enhance the effectiveness of facility operations and reduce unnecessary burden or other costs, with a particular focus on freeing up resources that healthcare providers could otherwise use to improve patient health and safety,” the federal agency said in a fact sheet accompanying the proposed rule titled, Cutting Administrative Requirements for Excellence in Patient Care (CARE).
The proposed rule follows a comprehensive review of regulations covering 21 provider and supplier types, the CMS fact sheet said, estimating that the proposals would save $320 million across the health care continuum, returning more than 3.26 million hours of staff time to providers.
CMS is proposing eliminating three Medicaid payment transparency reporting requirements for nursing facilities and intermediate care facilities for individuals with intellectual disabilities (ICFs/IID). The changes would eliminate reporting on the percentage of Medicaid payments allocated to direct care worker compensation and support staff compensation in nursing facilities, as well as support staff compensation in ICFs/IID, reducing administrative burdens for states and providers.
Also, the federal agency aims to streamline remaining COVID-19 vaccination requirements for residents to align them with requirements for other respiratory viruses.
Other proposals include allowing LTC residents to opt out of having discharge notices sent to state ombudsman offices. CMS is additionally seeking input on expanding the scope of practice for physician assistants and nurse practitioners in LTC facilities, including allowing them to perform visits currently required to be conducted by physicians.
Generally, CMS also seeks comments on future policies to address Medicaid institutional workforce shortages and strengthen the institutional workforce.
‘Tunneling’ concerns persist
The proposal to rescind Medicaid payment transparency reporting requirements is “nuanced,” said Jodi Eyigor, VP of Health Policy, LeadingAge, the association of nonprofit and mission-driven providers of aging services including nursing homes. However, the removal of the transparency reporting requirements will ultimately result in misguided policies, she added.
“As we noted in our comments on the proposed provisions in November 2023, reporting on the percentage of Medicaid dollars spent on direct care compensation misses the target. CMS, in the deregulation proposed rule, reflected our concerns that there are other legitimate expenses on which Medicaid dollars can be spent to enhance the quality of care and safety in nursing homes. Such a narrowed focus could be misleading and result in misguided policies if the bigger context is not considered,” she said.
Eyigor also called attention to a practice commonly called “tunneling,” whereby operators divert financial resources to ancillaries in a way that benefits the owners, operators or affiliated parties, potentially at the expense of the nursing facility.
“The mismanagement and tunneling of funds away from care and toward personal gain is reprehensible. LeadingAge fully supports transparency and will continue working with policymakers to identify the processes–including financial reporting–that can best help us address this problem,” she said.
Aspects that earn praise from the sector
On other aspects of the proposed rule covering COVID-era regulation, LeadingAge experts were pleased that CMS recognized the concerns they raised to the Department of Health and Human Services (HHS) in June 2025, Eyigor said.
“The proposed removal of National Healthcare Safety Network (NHSN) reporting requirements is a big win and fully aligned with the spirit of deregulation,” she said since these requirements duplicate other infection control processes and reporting.
“In removing the requirement, no information is lost on local conditions threatening the health and safety of nursing home residents and staff can shift the time and resources back to patient care and protecting residents from those very threats, she said.
Clif Porter, President and CEO of the American Health Care Association and National Center for Assisted Living (AHCA/NCAL) also praised some of the proposed changes.
“We appreciate CMS’ efforts to help long term caregivers put patients over paperwork and focus more on delivering quality care. Specifically, ending weekly reporting requirements that were tied to the public health emergency that ended more than three years ago is recognizing how far we’ve come since the pandemic and reducing redundant administrative tasks,” Porter said in an emailed statement to Skilled Nursing News.
In seeking public comment on these potential policy changes, CMS also plans to cut requirements for nursing homes and intermediate care facilities to educate staff about the benefits and risks of COVID-19 vaccines, offer the vaccines and document those actions.
“We look forward to submitting comments, including on additional policies that will help address the nation’s growing caregiver shortage and build the caregivers for tomorrow,” Porter said. “It’s time for a smarter, more effective oversight system focused on driving quality care, and we look forward to continuing to collaborate with CMS on this endeavor.”
Curriculum Development Specialist Lauren Stenson at the American Association of Post Acute Care Nursing (AAPACN) said that any final iteration of the proposed rule should aim to give flexibility to nurses.
“AAPACN would like to see CMS finalize changes that meaningfully reduce administrative demands and give nursing facilities greater flexibility in how they use their staff and resources,” she said. “Nursing homes already manage significant reporting and compliance responsibilities, and eliminating unnecessary or duplicative requirements could allow more time to be spent on direct resident care, staff development, and quality improvement.”
