Nation Acts to Support Providers: $2 Trillion COVID-19 Relief Package made Law

On Friday, March 27th, 2020 the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), a $2 trillion relief package aimed at, among other things, providing emergency aid for individuals, families, and businesses affected by the COVID-19 pandemic, was signed into law.  With more bi-partisanship than has been seen in a decade, apparently everyone is now in agreement that America needs a well-funded, well-functioning healthcare system capable of surmounting any challenge, including the current on-going crisis.

To support our aching, stretched-to-the-breaking-point system, the CARES Act includes provisions to address supply shortages, ensure access to healthcare for COVID-19 patients, access to financing for hospitals, and an overall expansion of resources necessary to meet this public crisis head-on. Advis is still reviewing the details of this legislation, but, as they relate to hospitals, the key provisions of the Act are listed below.

  • $100 Billion to the Public Health and Social Services Emergency Fund
    • These funds would be available to prevent, prepare for, and respond to, domestically or internationally, coronavirus; and for necessary expenses to reimburse, through grants or other mechanisms, eligible healthcare providers for healthcare-related expenses or lost revenues that are attributable to coronavirus.
    • “Eligible healthcare providers” mean public entities, Medicare or Medicaid enrolled suppliers and providers, and other entities the Department of Health and Human Services (“HHS”) may specify, within the United States and its territories, that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.
    • Funds appropriated are available for the construction of temporary structures, leasing of properties, medical supplies and equipment, including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity.
    • To be eligible for payment from this fund, an eligible healthcare provider shall submit to HHS an application that includes a statement justifying the need of the provider for the payment (sic). The eligible healthcare provider shall have a valid tax identification number.  HHS shall review applications on a rolling basis.
    • Recipients of payments shall submit reports and maintain documentation as HHS determines is needed to ensure compliance with conditions imposed for such payment.
    • Note: These funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
  • Adjustment of Sequestration: From May 1, 2020 to December 31, 2020, Medicare shall be exempt from reduction under any sequestration order.
  • Medicare Hospital Inpatient Prospective Payment System (“IPPS”) Add-On Payment for COVID-19 Patients During Emergency Period: For discharges of COVID-19 patients during the emergency period, Medicare will provide a 20% add-on payment to the DRG to which the discharge is assigned.
  • Increasing Access to Post-Acute Care During Emergency Period
    • Waiver of the Inpatient Rehabilitation Facility (“IRF”) Three-Hour Rule: For inpatient rehabilitation services furnished by a rehabilitation facility during the emergency period, HHS shall waive the requirement that patients of an IRF receive at least 15 hours of therapy per week.
    • Waiver of Site-Neutral Payment Rate Provisions for Long-Term Acute Care Hospitals (“LTACHS”): For inpatient services furnished by LTACHs during the emergency period, HHS shall waive the LTACH 50-percent rule and site-neutral IPPS payment rule (for a discharge if the admission occurs during such emergency period and is in response to the public health emergency).
  • Expansion of the Medicare Hospital Accelerated Payment Program During the COVID-19 Public Health Emergency:
    • Currently, for certain hospitals experiencing significant cash flow problems resulting from operations of its intermediary or from unusual circumstances of the hospital’s operation, accelerated payments may be made available.
    • In addition to the current benefit, the CARES Act extends the availability of this program to children’s hospitals, cancer hospitals, and critical access hospitals (“CAHs”).
    • HHS may make accelerated payments on a periodic or lump sum basis, increase the amount of payment that would otherwise be made to hospitals under the program (up to 100% or, in the case of CAHs, up to 125%) of what they otherwise would have received, and extend the period that accelerated payments cover so that up to a 6-month period is covered.
    • Hospitals may request that HHS (1) provide up to 120 days before claims are offset to recoup the accelerated payment; and (2) allow at least 12 months from the date of the first accelerated payment before requiring that the outstanding balance be paid in full.
  • Delay of Disproportionate Share Hospital (“DSH”) Reductions: $4 billion in DSH reductions for fiscal year 2020 have been eliminated. The DSH reduction for fiscal year 2021 has been cut from $8 billion to $4 billion.  These cuts will begin on December 1, 2020.  DSH reductions for fiscal years 2022 through 2025 remain at $8 billion per fiscal year, respectively.
  • Increasing Medicare Telehealth Flexibilities During Emergency Period: The CARES Act removes the “qualified provider” requirement – that providers or others in the same practice must have treated the patient during the past three years to provide them with telehealth service during the public health emergency. In addition, the CARES Act gives the HHS Secretary broader authority to waive certain telehealth requirements during the emergency period.
  • Pricing of Diagnostic Testing: During the emergency period, each provider of a diagnostic test for COVID-19 shall make public the cash price for such test on the provider’s website.  HHS may impose a civil monetary penalty on any provider of a diagnostic test for COVID-19 who does not comply and has not completed a corrective action plan to comply with the price disclosure requirements (penalty not to exceed $300 per day that the violation is ongoing).

Advis will continue to monitor further developments on the CARES Act and its impact on healthcare providers.  Please contact us today at 708-478-7030 if you need any assistance.

Published: March 27, 2020