COVID-19 – and its variants Delta and Omicron – continue to wreak havoc around the world. Thousands of individuals have died and continue to die, and millions more have been diagnosed as having COVID-19. Many sectors of the U.S. economy have been affected during this pandemic, perhaps none more than our health care delivery system. Our health care providers – academic medical centers, hospitals, physicians, pharmacists and every licensed health care professional – and the health care administrators have uniformly been our heroes, and we offer a sincere thanks for their continued efforts.
Below many members of our health care practice have offered their ‘fearless’ 2022 predictions of issues to watch and business and legal issues that may impact your business planning in 2022 and beyond. In this overview, we include a collection of articles on the following: “COVID-19 Continues: Status of the CMS Vaccine Mandate”, “Combating Provider Burnout”, “Municipal Bond Financing”, “Healthcare and Anti-Trust”, “Addressing the Debilitating Shortage of Hospital Staff Nurses”, “Improving Access to Home Dialysis Act”, “States Will Continue to Lead the Charge, Possibility of Federal Landscape Shift, Plus Other Drugs”, “Surprise! The No Surprises Act Took Effect January 1, 2022”, “Telehealth Here to Stay?”, “Provider Revenue Cycle Pressures Will Remain if Not Worsen in 2022 and Require Sophisticated Payment Strategies”, “HIPAA Compliance – Here To Stay”, “Expansion of Medicare Remote Patient Monitoring Payment”, “Merge, or Not To Merge” and “The Devastating Effects of the Pandemic on the Healthcare Provider Sector”.
Bruce Armon
Chair, Health Care Practice
COVID-19 Continues: Status of the CMS Vaccine Mandate
Authors: Samantha Gross & Athira Sivan
On November 5, 2021, the Centers for Medicare and Medicaid Services (“CMS”) announced a vaccine mandate requiring full COVID-19 vaccination for staff and others working at Medicare- and Medicaid-certified providers and suppliers (the “CMS Vaccine Mandate”). The CMS Vaccine Mandate applies to the following types of Medicare and Medicaid-certified providers and suppliers:
- Ambulatory Surgery Centers
- Community Mental Health Centers
- Comprehensive Outpatient Rehabilitation Facilities
- Critical Access Hospitals
- End-Stage Renal Disease Facilities
- Home Health Agencies
- Home Infusion Therapy Suppliers
- Hospices
- Hospitals
- Intermediate Care Facilities for Individuals with Intellectual Disabilities
- Clinics, Rehabilitation Agencies, and Public Health Agencies as Providers of Outpatient Physical Therapy and Speech-Language Pathology Services
- Psychiatric Residential Treatment Facilities (PRTFs)
- Programs for All-Inclusive Care for the Elderly Organizations (PACE)
- Rural Health Clinics/Federally Qualified Health Centers
- Long Term Care Facilities
The CMS Vaccine Mandate also applies to staff who work offsite for these types of providers and suppliers.
However, after federal courts in Missouri and Louisiana issued preliminary injunctions against the enforcement of the CMS Vaccine Mandate, CMS issued a memorandum stating that it would not enforce the CMS Vaccine Mandate while these injunctions were in place. On December 15, 2021, a federal circuit court issued a ruling limiting the scope of one of the preliminary injunctions leaving the CMS Vaccine Mandate enforceable only in 25 states (representing the non-plaintiff states). On Wednesday December 22, 2021, the U.S. Supreme Court fast-tracked challenges to two federal vaccine mandates, and heard oral arguments on the CMS Vaccine Mandate and the Occupation Safety and Health Administration (OSHA) vaccinate-or-test rule on Friday January 7, 2022. On January 13, 2022, although SCOTUS blocked the OSHA rule, the court found that the “Secretary [of Health and Human Services] did not exceed his statutory authority in requiring that, in order to remain eligible for Medicare and Medicaid dollars, the facilities covered by the [CMS] interim rule must ensure that their employees are vaccinated against COVID-19.” Biden v. Missouri, 599 U.S. 1, 8 (2022). The court thus allowed for the implementation of the CMS Vaccine Mandate. The Secretary of Health and Human Services has announced CMS will be allowing for flexibility to facilities to meet the new requirement and will hold off on any enforcement action as long as 90 percent of the workforce is vaccinated and the facility has a plan to immunize its remaining workers. Health care providers should implement plans now to comply with the CMS Vaccine Mandate.
Combating Provider Burnout
Authors: Samantha Gross & Athira Sivan
COVID-19 has placed an extraordinary amount of stress on physicians and other health professionals. A 2020 American Medical Association survey showed an average of nearly half of physicians and health care workers surveyed felt high fear of exposing themselves or their families to COVID-19, self-reported experiencing anxiety or depression, or suffered from work overload and burnout. The CDC provides guidance (available here) to health care workers on how to cope with stress and build resilience during the COVID-19 pandemic including: communicating with coworkers, supervisors, and employees about job stress; identifying and accepting those things which you have no control over; recognizing the crucial role health care personnel is performing in fighting the pandemic; increasing sense of control by keeping a consistent daily routine when possible; exercising; taking breaks from watching, reading, or listening to news stories including social media; and engaging in mindfulness techniques. Health care providers can take an active role in preventing burnout by implementing strategies for addressing burnout including: increasing awareness of the risks of burnout and preparing for occupational stress in order to reduce the stigma linked to mental health conditions like burnout; promoting positive mental health and self-care practices among health care personnel like those recommended by the CDC; ensuring availability of mental health services for personnel in health care facilities; leveraging digital technologies to prevent overburdening health care providers; and executing organizational measures such as limiting physician hours to create a lasting impact on the work culture.
Municipal Bond Financing
Author: Josh Pasker
2021 continued to be a busy year for the municipal bond market as interest rates remained at historically low levels. Market professionals are predicting that 2022 will continue to see a high volume of deals in the health care and hospital space. The pressures that COVID-19 placed on the health care industry have impacted many health care and hospital institutions in ways directly related to municipal debt. For example, the ability to maintain certain debt service coverage and liquidity requirements that exist in most financings has been difficult for some institutions to maintain. It is imperative that health care and hospital systems with municipal debt keep their investors informed if and when issues arise with existing debt covenants. In addition to new-money and refunding transactions, as consolidations and mergers become more prevalent in the health care and hospital arena it is imperative that the due diligence process includes an in-depth review of any outstanding bond documents that may exist for the merging/consolidating entities.
2022 also brings us one year closer to the one-month, three-month, six-month and 12-month LIBOR sunset date of June 30, 2023. LIBOR has been a fixture in U.S. and global finance for more than 30 years. It serves as the interest rate benchmark for an estimated $400 trillion of financial products that range from derivatives to mortgage loans – including $200 trillion in U.S. dollar-denominated contracts alone. LIBOR-based contracts for municipal issues provide for a floating interest rate based by a percentage of the then-current LIBOR plus an applicable margin or spread expressed in basis points. LIBOR contracts typically set out a fallback rate for LIBOR when it’s not available or if it is “no longer representative” of short-term borrowing rates. Health care and hospital systems with LIBOR-based loans should make it a point in 2022 to check the fallback provisions of operative documents to determine what happens when LIBOR is no longer available.
There had been some hope for sweeping changes to municipal finance in the form of federal legislation in 2022 including the ability to advance refund certain outstanding tax-exempt debt. At the time of this article it is unclear whether any federal legislation will be passed in 2022 that will have a significant impact on municipal debt.
Healthcare and Anti-Trust
Author: Michael Finio
There is clearly a new game in town – across the board – with respect to antitrust enforcement, and the health care space will not escape the renewed vigor in antitrust enforcement being promoted at both the FTC and the DOJ under the Biden Administration. That renewed vigor was clearly made evident in 2021 when the White House issued Executive Order 14036. Entitled “Promoting Competition in the American Economy,” there was seemingly no space or industry exempted from the Biden Administration’s intended scrutiny – and the health care space itself was clearly singled out, with these statements:
“Americans are paying too much for prescription drugs and healthcare services — far more than the prices paid in other countries. Hospital consolidation has left many areas, particularly rural communities, with inadequate or more expensive healthcare options. And too often, patent and other laws have been misused to inhibit or delay — for years and even decades — competition from generic drugs and biosimilars, denying Americans access to lower-cost drugs….
This order affirms that it is the policy of my Administration to enforce the antitrust laws to combat the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony — especially as these issues arise in labor markets, agricultural markets, Internet platform industries, healthcare markets (including insurance, hospital, and prescription drug markets), repair markets, and United States markets directly affected by foreign cartel activity.”
The Executive Order specifically directed the FTC and DOJ to take a fresh look at how they handled hospital mergers – even though that was an area already ripe with enforcement action, with at least six such cases being brought in the 18 months preceding the Executive Order. There is no reason to think that this trend will not continue given the Administration’s clear policy stance, and health care industry participants will need to brace themselves for regulatory action as they think about further merger, acquisition, affiliation and other consolidation – enhancing transactions.
In addition to the enforcement agencies having taken the Administration’s policy directives to heart, they have positioned themselves to take legal challenges in many arenas, including health care, with respect to all forms of consolidation, not only in cases which a merger challenge might normally have been expected, but also in fringe cases in smaller markets, and in both instances with a new mantra. DOJ and the FTC are now girded for battle not only with their historical cry (reinforced and restated in the Executive Order) that the antitrust laws as developed condemn a particular merger, for example, under Section 7 of the Clayton Act, but also with the reactionary statement that if a court does not agree with that outcome, it is clear then that the antitrust laws require amendment and reform to adjust to the realities of modern commercial markets. There are numerous legislative proposals before Congress, the most significant of which are led by Senator Klobuchar and her book (about combating monopolies over the last 100 years or so) and other statements about Competition Policy, which, among other things, propose significant reforms to merger enforcement. In addition, President Biden has appointed Lina Khan to chair the FTC, and Jonathan Kanter to lead the DOJ Antitrust Division – and both have track records for aggressive enforcement stances that are already sending ripples throughout industry.
All in all, and as in all other spaces, health care industry participants need to approach 2022 and beyond with a clear focus on and understanding of what renewed antitrust enforcement vigor means to their daily operations, as the impact of these legal, political and policy initiatives has put those operations under a bigger microscope.
Addressing the Debilitating Shortage of Hospital Staff Nurses
Author: Harriet E. Cooperman
American hospitals had been experiencing significant nurse shortages throughout the 21st century. The causes for this challenge are multiple. The aging U.S. population has sharply increased the demand for nursing care. According to the U.S. Census Bureau, by 2030, 82 million U.S. residents (one in every five residents) will be age 65 or older,1 of which 80 percent have at least one chronic condition.2 At the same time, many baby boomers are reaching retirement age and leaving the profession. Nursing schools have been unable to keep up with the demand for nurses due to a shortage of nursing faculty, budgetary constraints, and insufficient enrollment. Job stress created by long hours, mentally and physically demanding work, and inadequate staffing have caused many nurses, particularly younger staff, to leave nursing entirely or go to less stressful jobs, such as at private medical practices, outpatient clinics, and insurance companies.
The COVID-19 pandemic has exacerbated this already tenuous situation. According to a survey of 226 hospitals from 37 states, the turnover rate for hospital staff nurses in 2020 was 18.7 percent, a 2.8 percent increase over 2019. The annual cost of nurse turnover has been reported to be as high as $6.5 million for large acute hospitals.3 In 2021, 62 percent of U.S. hospitals reported an RN vacancy rate above 7 percent.4 Some hospital nurse vacancy rates are in excess of 25 percent. Inadequate staff coverage coupled with overworked and overly stressed staff have a significant negative impact on patient care. Studies have reported greater incidences of medication errors, pneumonia, and hospital acquired and other infections with low staffing levels.5 Additionally, fewer available staff creates longer wait times for patients to be assessed and treated.
To help fill the void, many hospitals are turning to travel nurses. The cost of these contingent workers rose exponentially during the pandemic. Pre-pandemic travel nurses averaged $1,673/week; the current weekly average is now more than $4,000. According to Robert Atlas, president of the Maryland Hospital Association, contract labor costs for Maryland hospitals are approximately $400 million more per year than pre-pandemic. In the past, travel nurses typically worked at hospitals around the country. Today, many travelers are assigned to hospitals located within miles or even city blocks from where they live or formerly worked. As a result, more and more hospital staff nurses are resigning to become travelers.
This perfect storm of increasingly high demand, continuing declining supply, and a pandemic that has pushed healthcare workers to the edge, has been a wake-up call for hospitals to become more aggressive, creative and strategic in addressing the nurse shortage on multiple levels. Such measures have included:
- Retention of nurses by increasing salaries at all levels; increasing premium pay; implementing retention bonuses for current staff; liberalizing paid leave policies to allow for carryover and/or payout for unused leave; and expanding and enhancing benefits and the work environment, such as adding tranquility rooms and massage chairs, adding incentive programs, recognition awards, and referral bonuses to encourage staff to help recruit new nurses;
- Aggressive recruitment of retired nurses to return to the workforce, out-of-state and foreign nurses, nurses from other hospitals within the city/locality, nursing school graduating students, coupled with significant signing/retention bonuses;
- Redeployment of nursing administrators and managers to direct patient care; reassigning nurses to units of greatest staffing need; offering incentive pay to staff who volunteer to cover assignments outside of their regular working time and areas;
- Utilizing nursing, medical and pharmacy student volunteers to perform various tasks, within their skillset and with faculty or staff supervision, such as helping nurses turn ventilated patients, transporting patients, lab specimens, delivering meals, etc.
- Development of training programs for high school students and other community members to encourage interest and develop skills in healthcare careers;
- Lobbying and legal action. The American Hospital Association and its state counterparts have been lobbying legislators and administration officials to investigate pricing practices of nurse staffing agencies.
It is expected that these efforts will continue and expand in 2022 and beyond. As the limited supply of nurses remains insufficient to meet the growing demand for their services, and hospitals find themselves competing on local, regional and national levels for nursing staff, those hospitals that address the staffing plight strategically, creatively, and aggressively are most likely to be successful in filling their nursing ranks.
Improving Access to Home Dialysis Act
Author: Brenda Glaser Abrams
On September 29, 2021, new bipartisan legislation known as the “Improving Access to Home Dialysis Act” was introduced in the U.S. House of Representatives. The Act seeks to make home dialysis more accessible and affordable to patients with End-Stage Renal Disease (ESRD) by allowing Medicare to pay professional staff to assist them, in their homes, to learn how to perform home dialysis properly. The Act also expands access to home dialysis by ensuring that patients with ESRD receive information about the full range of treatment options available to them early in the treatment process and tracks racial disparities in the utilization of home dialysis.
Home dialysis for patients with ESRD is underutilized in the U.S., particularly among historically disadvantaged persons. There are more than 7500 dialysis centers in the U.S., providing approximately 135 million dialysis treatments per year. The Centers for Medicare & Medicaid Services (CMS) currently pay more than $40 billion dollars per year for dialysis treatment, at $270 per treatment, while private insurance (if applicable) additionally pays more than $1,000 per treatment.
Although the Act may face long odds for its passage, it remains a pivotal time for kidney care as dialysis centers, home care providers, and nephrologists continue to advocate for new technologies, service models, policies, and initiatives that help those living with kidney disease. The National Kidney Foundation has long supported making home dialysis more accessible to all kidney patients and in 2018 launched a “Home Dialysis Quality Initiative,” a major, multi-disciplinary effort with clinicians, researchers, policy makers, patients, care partners, and industry representatives to remove barriers to home dialysis and permit more patients to treat kidney failure at home rather than at a center.
The Advancing American Kidney Health (AAKH) initiative, which was released by the Department of Health and Human Services (HHS) in July 2019, included as a policy goal a marked increase (to 80 percent) in the number of new patients with ESRD treated with either home dialysis or receiving a transplant by the end of 2025. To address this policy goal, HHS has been, among other things, informing the public with enhanced education and outreach programs to patients and clinicians and increasing home dialysis.
Yet, in 2020 more than 85 percent of Medicare fee-for-service beneficiaries with ESRD traveled to a facility to receive their dialysis at least three times per week, spending on average 12 hours each week attached to a dialysis machine and away from their home and families. In addition, due to their multiple chronic conditions and comorbidities, ESRD patients are among the most vulnerable population covered by Medicare and have the highest hospitalization rates for COVID-19 among Medicare beneficiaries. The risk of hospitalization and complications highlights the importance that this population stay at home to reduce their risk of exposure to the virus during the on-going public health emergency arising from the pandemic, and multiple incentives have resulted in a greater focus on care delivery to this highly vulnerable patient population.
In 2020, CMS finalized policies to allow certain new and innovative equipment and supplies used for home dialysis treatment of ESRD patients to qualify for an additional Medicare payment. This additional payment has been encouraging the development of new and innovative home dialysis machines that provide Medicare beneficiaries with ESRD more home dialysis treatment options that can improve their quality of life. Home dialysis systems permitting nocturnal hemodialysis therapy are becoming more widely available and promoted, and research continues for home hemodialysis innovations that reduce treatment duration and dialysate consumption.
The Act would provide additional funding and directives for in-home assistance by facility staff for ESRD patients on home dialysis and expand the types of healthcare professionals who can provide home dialysis training, promoting the AAKH initiative’s policy goal of improving accessibility and affordability of home dialysis. However, regardless of the Act’s passage, clinicians, researchers, policy makers, patients, care partners, and industry representatives, the market forces that they represent, and the desire to improve health outcomes and quality of life for ESRD patients likely will continue to encourage continued development and advances in home dialysis systems.
Cannabis Review and Outlook –States Will Continue to Lead the Charge, Possibility of Federal Landscape Shift, Plus Other Drugs
Authors: Jonathan Havens, Seth Gitner & Adam Fayne
Despite federal cannabis reform stalling in 2021, states showed no signs of slowing down in establishing or expanding medical and/or adult-use (i.e., recreational) cannabis programs. At last count, 38 states have medical cannabis laws on their books, with 18 of those states also permitting adult use. As we discussed in a piece in Cannabis Business Executive, no matter where you get your news, trade (and several mainstream) press headlines said the same thing after the November 2020 elections: Weed wins big at the ballot box.
Voters in five states approved medical and/or adult-use cannabis. More specifically:
- Arizona voters approved an adult-use measure;
- Mississippi voters approved a medical-use measure;
- Montana voters approved an adult-use measure;
- New Jersey voters approved an adult-use measure; and
- South Dakota voters approved both medical-use and adult-use measures (becoming the first state to do so at the same time).
While there were successful legal challenges to Mississippi’s medical initiative and South Dakota’s adult-use measure, both states’ legislatures could in 2022 enact through legislation the reforms that voters approved in 2020.
Beyond acknowledging the significant impact November 2020 had on cannabis reform, it is worth discussing state activity in response to the same. For example, Connecticut enacted an adult-use law in June 2021, no doubt in response to both New Jersey voters approving adult use and New York enacting an adult-use law earlier in the year. Now, all eyes are on states in the region that already have medical cannabis programs – Delaware, Maryland, and Pennsylvania – as they could adopt adult-use measures this year or next.
Regardless of strong public opinion polling, there are still pockets of the country (both in traditional “blue” and “red” states) that oppose legalization. However, given the drastic expansion of state cannabis programs in the last several years, slow-adopter states risk losing out on significant tax revenue to their regional neighbors if they don’t follow suit in enacting cannabis reform. Beyond the Mid Atlantic, states in the mid-west, central, and south could add some color to the cannabis legalization map. Arkansas, Florida, Missouri, Ohio, and Oklahoma could take up adult use this year, and Nebraska and Wyoming could consider medical use measures. For more information on these and other measures, we encourage you to read the Cannabis Business Times’ great piece on state activity in 2022. Speaking of the south, we are monitoring developments in Alabama and Georgia, as both look to roll out medical programs this year, as well as in Virginia, especially with Governor Glenn Youngkin (R) taking office. Virginia enacted adult use last year, and it is not clear how, if at all, Youngkin will impact the timing or implementation of that law.
For now, it’s state expansion or bust given the low prospect of sweeping federal reform, at least given the current makeup of the U.S. Senate. Congress’s upper chamber has become a bit of a legislative graveyard, stalling movement of even some key policy measures. While the 50-50 split in the Senate has caused headaches for stakeholders in a number of industries, there could be change on the horizon: Majority Leader Chuck Schumer (D-N.Y.) signaled recently that the Senate could soon take up filibuster reform. It is unclear whether the Senate will actually consider such a measure, let alone approve it. Even if filibuster reform is adopted, it is also not clear whether all 50 Senate Democrats would support ending the federal prohibition on cannabis. Yet another variable is the impact the 2022 midterm elections will have on control of Congress. Although beyond the scope of this piece, it is feasible that Republicans could win control of the House, and given the 50-50 Senate split, they would only need a net plus one seat to gain control of the Senate.
It is also possible that if Republicans gain control of one or both houses of Congress, cannabis reform (either incremental or sweeping) could occur. Cannabis polls very well, and it is wrong to assume that only liberal Democrats support it. One stumbling block that has prevented incremental reform like the Secure and Fair Enforcement (SAFE) Banking Act from passing the Senate – even though it’s passed the House multiple times – is that Sens. Schumer and Cory Booker (D-N.J.), sponsors of the Cannabis Administration & Opportunity Act (CAOA), along with Sen. Ron Wyden (D-Ore.), have opposed piecemeal reform, opting instead for a comprehensive measure that includes social justice reform. Perhaps with a flip of the Senate, Republicans could advance a measure like the States Reform Act (SRA) introduced by Representative Nancy Mace (R-S.C.). The SRA could be more palatable to Republicans and moderate Democrats, as it contains the fundamentals of CAOA with more narrowly tailored social justice measures.
Turning away from Congress, we note that President Biden has nominated Dr. Robert Califf to lead the U.S. Food and Drug Administration. Califf is a cardiologist who previously served as FDA Commissioner and deputy commissioner under President Obama. Little is known about how a Califf-led FDA will impact cannabis and cannabis-derived products, although it has been reported that Califf recommended some cannabis-derived drug products to patients while in private practice. We should not read too much into that, other than to say that he realizes that any drug, whether it is cannabis-derived or otherwise, when well-researched and considered safe and effective, can and should be used to treat patients. We do not expect Califf, if confirmed, to be any more or less active in the cannabis space than his predecessors. As others have done before him, he will let science inform FDA’s decisions around which drug products it approves. Regarding hemp-derived cannabidiol (CBD), we do not see Califf departing from FDA’s previously articulated stance regarding the illegality of CBD as a dietary ingredient unless Congress forces the Agency’s hand through legislation.
Speaking of cannabinoids, another issue we are monitoring this year is treatment of newer or lesser-known ones such as delta-8 tetrahydrocannabinol (THC), delta-10 THC, THC-O acetate (THC-O), cannabigerol (CBG), and cannabinol (CBN). Particularly with regard to the THC cannabinoids in this list, there has been an increased amount of attention from industry and regulatory stakeholders, especially about the legality of products containing them. While a number of states have banned delta-8 THC, for example, it is still widely available and enforcement seems limited and sporadic. Despite much debate about delta-8’s legality, the U.S. Drug Enforcement Administration’s (DEA) position on it, especially if it is made by extracting CBD from hemp and then synthesizing it into delta-8, is not clear.
Last but certainly not least, while this section largely addresses cannabis, we have been receiving an increasing number of questions around psychedelics, both with regard to federal and state regulation of the same. We are seeing similarities between how the psychedelics space is developing now with how the cannabis space really started to take shape several years ago. The science around the potential effectiveness of methylenedioxymethamphetamine (MDMA), psilocybin (i.e., mushrooms), and lysergic acid diethylamide (LSD) to treat depression, post-traumatic stress disorder (PTSD) (and more) is impressive. Regulators and policymakers, especially at the state level, seem to be taking note of the same. While much of the psychedelics policy movement has occurred at the local level (e.g., the City of Denver was the first municipality to decriminalize psilocybin in 2019), Oregonians voted in 2020 to legalize psilocybin for therapeutic purposes. A great overview of many of these policies from across the country is available in this piece from Marijuana Moment. Although there is some way to go in opening up access to psychedelics, DEA and the National Institute on Drug Abuse (NIDA) have indicated in testimony to Congress their support for streamlining the process of researching certain schedule I drugs (e.g., cannabis, some psychedelics), which is an important step.
We will be monitoring developments regarding these issues and more in 2022.
Surprise! The No Surprises Act Took Effect January 1, 2022
Author: Samantha Gross
The No Surprises Act (the “Act”) implements rules designed to protect insured patients from unexpected hospital and physician bills that would typically be reimbursed by commercial insurance plans. The Act puts into place important patient protections from surprise medical bills, while imposing significant obligations on health care providers and facilities. The Act took effect January 1, 2022.
Four key requirements that health care providers need to be aware of in 2022 are summarized below.
- No balance billing for out-of-network emergency services
Prior to the Act, many health care providers could bill out-of-network patients directly, putting the onus on the patient to seek reimbursement from his or her health insurer. Under the Act, health care providers who are out-of-network with a commercial insurance plan cannot bill or hold patients liable who received emergency services for any payment that is greater than the in-network cost-sharing requirement (e.g., co-pays) for those services. Providers must determine which patients are out-of-network and negotiate any payment amounts for out-of-network care with the patient’s health insurer.
- No balance billing for non-emergency services by out-of-network providers, unless notice and consent is given
Providers are not permitted to balance bill for non-emergency services except under specific circumstances. First, the treating provider must determine if the patient can travel to a participating provider or facility (within a reasonable distance) and if the patient is in a condition to receive notice of the out-of-network services and provide informed consent. This rule ensures the patient is in a position to choose between the out-of-network provider and another, in-network, provider. The out-of-network provider must then notify the patient of its out-of-network status and obtain the patient’s written consent to receive out-of-network services more than seventy-two hours before the service is delivered or three hours prior to a same day service. The provider must retain the written notice and consent for at least seven years after the date on which the item or service is furnished. This allows patients who wish to do so to choose an out-of-network provider when a substantive choice exists. There are exceptions to this rule for services where a patient is not in a position to select a specific provider, including: emergency medicine, anesthesiology, pathology, radiology, neonatology, diagnostic testing, and services provided by assistant surgeons, hospitalists, and intensivists.
- Disclose patient protections against balance billing
Under the Act, health care providers are required to provide patients with a clear and understandable disclosure providing a plain-language explanation of the Act and its requirements. The statement must include information regarding the process through which patients can report potential violations of the Act. Providers or facilities are also required to post this information prominently at the location of the facility and post it on a public website, if applicable.
- Provide a good faith estimate in advance for scheduled services or upon request (for uninsured and self-pay)
Providers and facilities must ask about an individual’s health insurance coverage status prior to furnishing non-emergency services. Health care providers and facilities must provide good faith estimates of expected charges for uninsured (or self-pay) individuals (or their authorized representatives), upon request or upon scheduling an item or service. The notification must provide, in clear and understandable language, a good faith estimate of the expected charges, expected service, and diagnostic codes of scheduled services. The expected charges must include the actual charge expected to be billed, any discounts, the scheduled or requested item/service, and any item or service that is reasonably expected to be provided in conjunction with the scheduled or requested item/service (including those items and services reasonably expected to be provided by another provider or facility). The estimate must include the expected billing and diagnostic codes for each such item or service. If a good faith estimate is inaccurate, it may be challenged by the patient.
Violations of the Act can carry civil monetary penalties as well as other repercussions. The Secretary of the Department of Health and Human Services may take enforcement actions against providers, including imposing civil monetary penalties of up to $10,000. Health care providers should ensure they are complying with the Act’s requirements. Providers should adopt Act compliance policies, implement procedures, and provide training and follow up with staff.
Telehealth Here to Stay?
Author: Patty Varona Garcia
Telehealth experienced a rapid escalation in use during the COVID-19 pandemic, as we saw the necessity for health care services to be provided via telehealth to abide with stay-at-home orders and to reduce COVID-19-related exposure. As COVID-19 blazed across the country, nearly every state relaxed its licensing rules so providers licensed in other states could provide health care services using telemedicine. According to a market report published by IQVIA, there were ten times more telehealth visits in March 2021 than in March 2020. However, with the effective vaccines available to combat COVID-19 and the relaxed quarantine guidelines provided by the Centers for Disease Control and Prevention (CDC) many states began to restore pre-pandemic licensing rules. These changes left many providers with the choice to either stop providing telehealth outside of the state they are licensed in or seek additional licensure in other jurisdictions, which can be expensive and lengthy.
Despite the effectiveness of the vaccines, we continue to see new strains develop such as the Delta and Omicron variants, causing a spike in cases. According to the CDC, on January 5, 2022 there were 705,264 new cases reported, more than doubling the January 2021 peak, causing high levels of community transmission and creating a rise in hospitalization.
The constant need to reduce transmission by maintaining social distance has continued to create a need for the use of telehealth. In 2022, we expect to see the role of telehealth across many specialties continue to grow. Based on the increased use of telehealth lawmakers may seek to make permanent certain flexibilities that allowed telehealth to continue to grow.
Provider Revenue Cycle Pressures Will Remain if Not Worsen in 2022 and Require Sophisticated Payment Strategies
Authors: Charles Kelly and Samantha Gross
For hospital administrators awash in “cost of COVID” analyses and woes, COVID cost estimates for the summer of 2021 provide a disquieting justification for provider worries — particularly as tied to caring for the unvaccinated. According to Peterson-KFF, the average COVID hospitalization costs $20,000. There were 32,000 preventable COVID-related adult hospitalizations in June, 68,000 in July and 187,000 in August for an aggregate preventable COVID hospitalization tab for the summer of $5.7 billion, or $1.9 billion per month.
Add to that nightmarish reality three other major hospital management realities: a) the length of stay for an acute COVID patient can easily be 50 percent to 75 percent longer than the stay for a “normal” acute patient; b) the cost for one-time doses of Remdesivir or Tocilibimab run $3,000-$4,000; and c) whether the payor is traditional Medicare, Medicaid, Medicare Part C or commercial, reimbursement rates regularly fail to cover the cost of COVID-related care.
What is a hospital administrator to do? Many in 2022 will huddle with their in-house financial and legal departments and trusted outside counsel to dust off legal doctrines such as quantum meruit, unjust enrichment, commercial impracticability, unconscionability and the like to approach payors and request, or demand, adjustments to payments that are below cost. Below cost payments are not only improper as a matter of law, but unjustified as a matter of social policy. Administrators can make this argument not based on COVID underpayment alone, but in conjunction with other, raging reimbursement inequities, such as current observation status payor policies. The law has no presumption that providers must bear the financial brunt of a pandemic, nor accept below cost payments. Shouldering the costs of COVID and other acute care crises reflect a societal problem — to be handled by all constituents — not a hospital or health system problem alone. Hospital administrators need to marshal their financial facts to tell their story and the legal implications of that story in order to demand, bargain for and obtain fair — and sustainable — reimbursement.
HIPAA Compliance – Here To Stay
Author: Bruce Armon
2021 was the 25th anniversary of the passage of the statute that created HIPAA. In the resulting years, HIPAA compliance has been an important element of each ‘covered entity’s’ policies and procedures and ‘business associates’ have had to ensure their protocols are and remain HIPAA compliant. There are very few bipartisan elements in Washington, D.C. these days. HIPAA is the exception. The U.S. Department of Health and Human Services Office for Civil Rights has been steadfast in Democratic and Republican administrations in resolving HIPAA complaints, including the so-called Right of Access Initiative to ensure individuals get timely access to their medical records upon request. Here is a recent article that Samantha Gross and I wrote.
The beginning of each year is a natural inflection point for covered entities and business associates to review their existing HIPAA policies and procedures and update them where appropriate. If you are a covered entity, remember you must report all 2021 breaches to HHS within 60 days of the beginning of the year.
Expansion of Medicare Remote Patient Monitoring Payment
Author: Samantha Gross
The Medicare Physician Fee Schedule 2022 Final Rule expands Medicare payment codes for remote patient monitoring (RPM). RPM is the use of digital technologies to monitor and capture medical and other health data from patients and electronically transmit the information to health care providers. Providers use that data for assessment, recommendations, instructions, and further treatment. RPM services can increase access to care for patients at home and allow providers to address changes in health status quickly. RPM can be provided “incident to” under general supervision, meaning the service can be performed under the supervision of and billed to Medicare by a qualified health care professional. Providing services incident to reduces the burden for providers to furnish RPM services.
The 2022 Medicare Physician Fee Schedule expands Medicare RPM payment codes to include remote therapeutic monitoring, in addition to previously covered remote physiologic monitoring codes. RPM solutions pose a risk to data privacy and security as monitoring equipment is deployed at the patient’s home. RPM devices are susceptible to cyber criminals, allowing access to sensitive health information. Providers utilizing these solutions must ensure adequate cybersecurity measures are taken to protect such patient information. In addition, health care providers interested in investing in RPM solutions must comply with licensure, scope of practice, and other requirements to be eligible for reimbursement.
As patients become increasingly accustomed to – and many prefer – remote care during the COVID-19 pandemic, providers are likely to see an increased demand for RPM options.
Merge, or Not To Merge
Author: Bruce Armon
The continued COVID-19 challenges may force providers – hospitals and private practices – to consider mergers or strategic affiliations to solidify their balance sheet and hopefully create new synergistic opportunities. Between the increased costs of staffing (nurses and other professionals), relatively flat reimbursements, and general inflationary trends, it is becoming more difficult for providers – no matter their size and whether they are for profit or non-profit – to have excess revenue over expenses and fulfill the mission and objectives in the communities they serve.
The decision to merge is not an easy one. The ‘acquired’ party may feel it is losing autonomy and its identify. The acquiring party has to merge cultures, be prepared for the unknown ‘surprises’, and hopefully achieve the economies of scale that likely propelled the decision to move forward in the merger.
If COVID continues as a pandemic or even an endemic for the balance of 2022 – and without the infusion of additional and meaningful federal and or state government support – we can expect to see additional mergers and consolidations and, unfortunately, we may see institutions declare bankruptcy if they are not able to find a suitable merger partner.
The Devastating Effects of the Pandemic on the Healthcare Provider Sector
Author: Rich Frazier
With the tax and spend legislation languishing in the Congressional cement mixer, it is anyone’s guess as to what revenue raisers will emerge from the tax-writing committees in Washington. However, what is clear is the devastating effects that the last two years of the pandemic have had on the entire healthcare provider sector of the economy. With that background, it is hard to imagine that Congress will place any additional requirements on the tax-exempt healthcare players. Likewise, the for-profit providers have been impacted just as have their counterparts in the nonprofit sector. So, our prognosis is that all of the healthcare providers should have a fairly quiet 2022, at least as far as additional taxes and requirements are concerned. The one exception will be the level of taxation on both individuals (including pass-through entities) and corporations. They undoubtedly will be included in any rate hikes applicable to individuals and businesses.
In the tax-exempt hospital arena, any hospital that is doing its Community Health Needs Assessment will find that there is a new set of “needs,” in the community, some of which were either unknown or thought not to be severe enough to require attention. The disparity among populations within just about every community was brought to the fore over the last two years and will become an increasingly important piece of any needs assessment. While the pandemic has been devastating on the healthcare provider group, it has shown us that addressing any health issue in the community is best done by a collaboration among the providers, the payors, government at all levels, and the groups that provide support for those needing care.
