On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed into law by President Trump. This historic legislation contains over $2 trillion in relief, including numerous healthcare related provisions. The CARES Act allows the HHS Secretary to make billions of additional dollars available to the healthcare providers, suppliers, and manufacturers. The CARES Act also increases flexibility under the Medicare program for providers to respond to COVID-19, including changes around telehealth, home health certifications, inpatient rehabilitation facility services, and long-term care hospital discharges and payments. Below is a summary of the key policy and funding provisions relevant to the healthcare provider community.

Assistance to Healthcare Providers

Medicare Payment Changes

• Suspension of Medicare Sequestration Cuts: Suspends the 2% Medicare sequestration payment reduction from May 1 through December 31, 2020 and extends the Medicare sequestration payment reduction through fiscal year 2030, instead of fiscal year 2029.
• Medicare Hospital Inpatient Prospective Payment System Add-On Payment For COVID–19 Patients During Emergency Period: Increases the weighting factor for each diagnosis-related group with a COVID-19 principal or secondary diagnosis by 20 percent during the COVID-19 public health emergency. This adjustment would not be considered in applying budget neutrality.
• Expansion of Accelerated Payment Program: Expands the existing Medicare accelerated payment program for the duration of the COVID-19 emergency period. Specifically, qualified facilities would be able to request up to a six-month advanced lump sum or periodic payment. This advanced payment would be based on net reimbursement represented by unbilled discharges or unpaid bills. Most hospital types could elect to receive up to 100 percent of the prior period payments, with Critical Access Hospitals able to receive up to 125 percent. Finally, a qualifying hospital would not be required to start paying down the loan for four months and would also have at least 12 months to complete repayment without a requirement to pay interest.

New Funding

• Public Health and Social Services Emergency Fund: $100 billion grant program to reimburse healthcare providers for lost revenue and COVID-19 related expenses.
  • Limitation: “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”
  • Timing:
    • “[T]he Secretary of Health and Human Services shall, on a rolling basis, review applications and make payments under this paragraph in this Act[.]”
    • “[P]ayments under this paragraph shall be made in consideration of the most efficient payment systems practicable to provide emergency payment[.]”
  • Eligible Use of Funds: “…for building or 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”
  • Audits/Reporting:
    • Within three years after final payments made under this program, HHS OIG is directed to transmit to Congress a final report on audit; HHS OIG and the Government Accountability Office may conduct audits of interim payments before that date.
    • HHS Secretary is directed to provide a report to Congress, within 60 days of enactment, on distribution of funding, summarized by state; these reports shall be updated every 60 days until the funds are expended.
• Public Health and Social Services Emergency Fund:
  • Vaccine, Therapeutics, Diagnostics, and other Medical or Preparedness Needs: Provides $11 billion, including at least $3.5 billion to advance construction, manufacturing, and purchase of vaccines and therapeutic delivery.
  • Hospital Preparedness: Provides $250 million to improve the capacity of healthcare facilities to respond to medical events.
• Health Resources and Services Administration (HRSA):Provides $275 million to expand services and capacity for rural hospitals, telehealth, poison control centers, and the Ryan White HIV/AIDS program.

Delay of Medicare and Medicaid Payment Cuts

• Medicare: Prevents scheduled payment adjustments for durable medical equipment (DME) in rural and noncontiguous areas from going into effect until December 31, 2020 (as scheduled) or until after the COVID-19 public health emergency ends.
• Medicaid: Disproportionate Share Hospital (DSH) cuts are delayed through November 30, 2020.

Telehealth Services

• Exemption for Telehealth Services: Allows a high-deductible health plan (HDHP) with a health savings account (HSA) to cover telehealth services prior to a patient reaching the deductible.
• Increasing Medicare Telehealth Flexibilities During Emergency Period: Removes the requirement that a beneficiary receiving telehealth during the COVID-19 emergency period from a qualified provider under Medicare, Medicaid or the Children's Health Insurance Program (CHIP) have a prior relationship with a provider during the previous three years.
• Enhancing Medicare Telehealth Services for Federally Qualified Health Centers and Rural Health Clinics During Emergency Period: Allows the Secretary of HHS to pay for telehealth services furnished by a Federally Qualified Health Center (FQHC) or a Rural Health Clinic (RHC) during the COVID-19 Public Health Emergency. This section would allow FQHCs and RHCs to furnish telehealth services to beneficiaries in their home. Medicare would reimburse for these telehealth services based on payment rates similar to the national average payment rates for comparable telehealth services under the Medicare Physician Fee Schedule. It would also exclude the costs associated with these services from both the FQHC prospective payment system and the RHC all-inclusive rate calculation.
• Temporary Waiver of Requirement for Face-To-Face Visits Between Home Dialysis Patients and Physicians: Authorizes the Secretary of HHS to waive the requirement that end-stage renal disease (ESRD) patients can receive monthly ESRD-related clinical assessments via telehealth only if they received a face-to-face clinical assessment without the use of telehealth services during the COVID-19 public health emergency.
• Use of Telehealth to Conduct Face-To-Face Encounter Prior To Recertification of Eligibility for Hospice Care During Emergency Period: Permits the use of telehealth for a face-to-face encounter prior to recertifying eligibility for hospice care under Medicare during the COVID-19 public health emergency.
• Improving Care Planning for Medicare Home Health Services: Permits providers other than physicians (e.g., nurse practitioners, clinical nurse specialists, and physician assistants under the supervision of a physician) to certify that an individual is confined to his or her home and requires certain home health services.

Emergency Measures

• Post-Acute Care Access During Emergency Period: Provides acute care hospitals flexibility, during the COVID-19 emergency period, to transfer patients out of their facilities and into alternative care settings in order to prioritize resources needed to treat COVID-19 cases. Specifically, this section would waive the Inpatient Rehabilitation Facility (IRF) 3-hour rule, which requires that a beneficiary be expected to participate in at least three hours of intensive rehabilitation at least five days per week to be admitted to an IRF. It would allow a Long-Term Care Hospital (LTCH) to maintain its designation even if more than 50 percent of its cases are less intensive. It would also temporarily pause the current LTCH site-neutral payment methodology.

Personal Protective Equipment (PPE) for Healthcare Workers and Patients

• Strategic National Stockpile:
  • Clarifies the Strategic National Stockpile (SNS) includes certain types of medical supplies such as personal protective equipment and supplies necessary for administering drugs, vaccines, and diagnostic tests.
  • Authorizes $16 billion to procure personal protective equipment, ventilators, and other medical supplies for federal and state response efforts. When combined with the first supplemental, the Committee has provided approximately $17 billion for the Stockpile.
• Liability Protection: Grants permanent liability protection for manufacturers of personal respiratory protective devices where such devices are determined to be a priority for use during a public health emergency.
• Defense Production Act (DPA): Authorizes $1 billion for the DPA, to increase access to materials necessary for national security and pandemic recovery.

Diagnostic Tests

• Coverage of Testing and Preventive Services:
  • Clarifies all testing for COVID-19—including tests without an Emergency Use Authorization (EUA) from the FDA—be covered by commercial insurance plans without cost sharing.
  • Requires insurers to pay providers either a contracted rate or a cash price posted by a provider (if no contracted rate exists) for COVID-19 tests covered at no cost to patients. Providers that do not post their cash price for the test on their website are subject to civil monetary penalties.
  • Requires insurers to cover any COVID-19 vaccine that meets certain qualifications without imposing any cost-sharing on patients.
• New Funding: Authorizes $1.32 billion in supplemental FY2020 funding for community health centers for testing and treating COVID-19.

A copy of the CARES Act can be found here.