“We aren't just reducing bureaucratic sprawl. We are realigning the organization with its core mission and our new priorities in reversing the chronic disease epidemic,” HHS Secretary Robert F. Kennedy, Jr. said in a news release March 27. “This department will do more — a lot more — at a lower cost to the taxpayer.”
Here’s what you should know about how abolishing HHS regional offices will affect the healthcare industry.
What do HHS regional offices do?
HHS regional offices work closely with states, providers and health insurance companies to manage enforcement, compliance and myriad administrative tasks related to Medicare, Medicaid and other federal healthcare and public health programs.
The five offices set for closure oversee activities in 22 states and five territories. The remaining five regional offices will pick up the slack, Kennedy wrote in an op-ed in the New York Post on April 10. The Centers for Medicare and Medicaid Services operates regional offices in the same 10 cities that will remain open.
HHS separately announced it would close six Offices of General Counsel locations. The remaining offices in Atlanta, Denver, Philadelphia and Kansas City, Missouri, will take on the work previously conducted in Boston, Chicago, Dallas, New York, San Francisco and Seattle.
Office of Government Counsel regional offices have traditionally collaborated with the HHS and CMS regional offices to handle enforcement, compliance and policy implementation.
Taken together, these closures advance the Trump administration's efforts at “reducing inefficiencies, strengthening core services, and ensuring better outcomes for patients and communities nationwide,” an HHS spokesperson wrote in an email.
How is the healthcare industry affected?
“It's unrealistic to think that the regional offices that remain, that already have their existing areas of countries where they do have deep relationships with the industry, are just going to be able to step in on day one, or any time in the near term, and be able to operate as efficiently and as effectively as the shuttered offices,” said Jeff Wurzburg, a partner at the law firm Norton Rose Fulbright, which represents hospitals.
Healthcare industry groups are concerned that consolidating the HHS regional offices will impede activities such as change of ownership reviews and facility inspections, and delay some CMS-specific enforcement including provider audits performed by Medicare Administrative Contractors, which are health insurance companies paid to process for-for-service Medicare claims.
HHS regional offices also include Office of Inspector General employees and supervise Medicare Advantage insurers, so shrinking this part of the department may weaken fraud prevention and enforcement.
What happens next?
HHS has not disclosed when the regional offices in Boston, Chicago, New York, San Francisco and Seattle will close or how their responsibilities will be divided among the offices in Atlanta, Dallas, Denver, Philadelphia and Kansas City, Missouri. The department is carrying out its reorganization in phases, and the regional office closures are part of its intent to lay off 20,000 employees.
Democrats on Capitol Hill have demanded Kennedy provide details on the overall plan. House Ways and Means Committee ranking member Richard Neal (Mass.) and the panel's other Democrats wrote Kennedy April 8 asking for information about the number and nature of layoffs, how core operations such as survey and certification procedures will be handled, and whether the HHS Office of Inspector General was consulted about the reorganization.
Eliminating regional offices for half of the country “will harm the health and safety of local communities and risks inappropriate use of taxpayer dollars by eroding oversight over programs like Medicare and Medicaid,” the Democrats wrote. The lawmakers directed Kennedy to respond by Monday but had not received a reply by close of business, according to a spokesperson for Rep. Lloyd Doggett (Texas), the ranking Democrat on the Ways and Means Committee's health subcommittee.
