* Move would save $3.4 billion over five years
* Agency seeks new efficiency for hospitals, providers
* Small critical access hospitals, rural clinics targeted
Feb 4 (Reuters) - The Obama administration on Monday proposed eliminating certain obsolete Medicare regulations, a move it said would save hospitals and other healthcare providers an estimated $676 million a year, or $3.4 billion over five years.
The U.S. Department of Health and Human Services described the targeted regulations as unnecessary or excessively burdensome and said their proposed elimination would allow greater efficiency without jeopardizing safety for the Medicare program's elderly and disabled beneficiaries.
"We are committed to cutting the red tape for healthcare facilities, including rural providers," Health and Human Services Secretary Kathleen Sebelius said in a statement.
"By eliminating outdated or overly burdensome requirements, hospitals and health care professionals can focus on treating patients," she added.
Industry representatives largely welcomed the changes, saying the proposed rule would help hospitals free up more resources for patient care.
"There are a number of particularly meaningful provisions in the proposed rule," said Chip Kahn of the Federation of American Hospitals.
The American Hospital Association, though, said it was disappointed the administration did not allow "hospitals in multi-hospital systems" to have single integrated medical staff structures.
"Hospitals are delivering more coordinated, patient-centered care and (the administration) should not let antiquated organizational structures stand in the way," AHA President Rich Umbdenstock said in a statement.
A key provision of the new rule would eliminate the requirement that physicians be on site once every two weeks at some very small hospitals, rural health clinics and federally qualified health centers.
Among the other changes, the administration would allow registered dietitians to order patient diets without a physician's approval, and hospital nuclear technicians to prepare certain medicines without the supervision of a doctor or pharmacist. (Reporting by David Morgan; Editing by Phil Berlowitz)