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CMS Makes Second Round of Sweeping Regulatory Changes and HHS Updates the Grant Relief Program

May 5, 2020

If you have any questions about this blog post, please contact Khaled J. Klele, Ryan M. Magee, or Labinot Alexander Berlajolli.

CMS Makes a Second Set of Sweeping Regulatory Waivers

On April 30, 2020, the Centers for Medicare & Medicaid Services ("CMS") issued a press release announcing another round of sweeping regulatory changes giving physicians, hospitals and other healthcare organizations greater flexibility in responding to COVID-19.  These new changes build on the broad changes CMS issued in March 2020 as outlined in our previous Update.  CMS modified its previously issued memorandum (now 36 pages from 26 pages) to explains these comprehensive changes.  Some of the significant changes include the following:

Testing for COVID-19:   CMS will no longer require a written order from a practitioner, and pharmacists can now perform certain COVID-19 tests depending on state law.  CMS will pay hospitals and practitioners for seeing Medicare beneficiaries and collecting samples for COVID-19 tests, even if those are the only services the patient receives.   Medicare and Medicaid will also cover FDA-authorized antibody tests.

Hospital Capacity and Payment Rates:  CMS will allow certain hospitals to increase the number of beds  for COVID-19 patients without being penalized. For example, teaching hospitals can increase their number of temporary beds without facing reduced payments.  CMS is also enabling freestanding inpatient rehabilitation facilities to accept patients from acute-care hospitals experiencing a surge, even if the patients do not require rehabilitation care.  In terms of increased payments, under current law, most provider-based hospital outpatient departments that relocate off-campus are paid at lower rates under the Physician Fee Schedule, rather than the Outpatient Prospective Payment System (OPPS).  CMS will allow certain provider-based hospital outpatient departments that relocate off-campus to obtain a temporary exception and continue to be paid under the OPPS.

Telemedicine:  CMS is waiving limitations on the types of clinical practitioners that can provide Medicare telehealth services. Physical therapists, occupational therapists and speech language pathologists are now able to provide telehealth services, including some hospital-based outpatient therapies. CMS is allowing more telehealth services to be provided by audio-only connection, and increasing payments for these services to a range of about $46 to $110 per visit, up from $14 to $41. The payments are retroactive to March 1, 2020.   CMS also recently issued a toolkit to assist states in accelerating the adoption of broader telehealth coverage policies.  The toolkit help states identify the policy topics that should be addressed to better facilitate widespread adoption of telehealth services.

ACOs: CMS has decided to adjust the financial methodology to account for COVID-19 costs to ensure Medicare ACOs will be treated equitably, regardless of the extent to which their patients are affected by the pandemic.  CMS is also forgoing the annual application cycle for 2021 so that ACOs whose participation is slated to end this year have the option of extending for another year, and allowing ACOs to maintain their current financial risk level for next year, instead of automatically being advanced to the next risk level.

$175 Billion in HHS Grant Money to Providers

The CARES Act allocated $100 billion to providers, of which $50 billion has been or is in the process of being distributed in a general manner to providers as discussed in our previous Updates.  The remaining $50 billion of the $100 billion is designated for “targeted” distributions as follows:

Allocation for Treatment of the Uninsured:  Every healthcare provider who has provided treatment for uninsured COVID-19 patients on or after February 4, 2020, can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding and attesting to certain requirements.  Providers can register via the HRSA COVID-19 Uninsured Program Portal, and begin submitting claims electronically on May 6, 2020.

Allocation for COVID-19 High Impact Areas:  On May 1, 2020, the U.S. Department of Health and Human Services ("HHS") announced that it will start distributing $12 billion to 395 hospitals that provided inpatient care for 100 or more COVID-19 patients through April 10, 2020, $2 billion of which will be distributed to these hospitals based on their Medicare and Medicaid disproportionate share and uncompensated care payments. The state and county breakdown of the high impact distribution is available here.

Allocation for Rural Providers: $10 billion has been allocated to rural health clinics and hospitals.  Hospitals and Rural Health Clinics will each receive a minimum base payment plus a percentage of their annual expenses.  Rural acute general hospitals and Critical Access Hospitals will receive a minimum payment of $1 million, with additional payment based on operating expenses. The state breakdown of the rural provider distribution is available here.

Allocation for Indian Health Service:  $400 million has been allocated for Indian Health Service facilities and was distributed on the basis of operating expenses for the facilities.

The Paycheck Protection Program and healthcare Enhancement Act (the “Act”), which was recently enacted, included an additional $75 billion for eligible healthcare providers including public entities, Medicare or Medicaid enrolled suppliers and providers.  The funds will be used to compensate providers for lost revenue and to build or construct temporary structures and purchasing medical supplies including personal protective equipment and testing supplies.   The Act also allocated $25 billion to support testing expansion, much of which will go to the States directly.

Please visit Riker Danzig’s COVID-19 Resource Center to stay up to date on all related legal issues.

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