CMS Issues New Round of Waivers and Rule Changes In Response to COVID-19

King & Spalding

Last week CMS issued a new round of regulatory waivers and rule changes in response to the COVID-19 public health emergency, including its Interim Final Rule with comment period, CMS-5531-IFC. The key changes relax certain regulatory requirements and aim to expand services—including telehealth and testing services, expand workforce and capacity, and otherwise loosen certain rules to give Medicare providers flexibility during the public health emergency. CMS has also made significant changes to its Shared Savings Program for Accountable Care Organizations (ACOs). The new temporary measures build on the other waivers and rules announced on March 30 and April 10, 2020. The changes and waivers apply immediately without an application process.

Lab Testing for COVID-19

CMS had previously announced it will pay laboratories for technicians to collect samples for COVID-19 testing from homebound beneficiaries and those in certain non-hospital settings. Now, CMS will also pay hospitals and practitioners for assessment and sample collection, as well as making separate payment when that is the only service received. Medicare will now cover COVID-19 diagnostic tests when ordered by any healthcare professional authorized to do so under state law, not just the treating physician or other practitioner. Further, Medicare will pay for COVID-19 tests performed by pharmacists as part of a laboratory enrolled in Medicare. In addition to diagnostic tests, Medicare and Medicaid will now cover certain serology (antibody) tests and laboratory processing of certain FDA-authorized tests that beneficiaries self-collect at home.

These updates are included in the CMS fact sheet for laboratories available here.


CMS further expanded flexibilities for telehealth services. For instance, CMS has waived limitations at 42 CFR § 410.78(b)(2) regarding the types of clinical practitioners who may furnish and bill for Medicare telehealth services as distant site providers so they now include physical therapists, occupational therapists, and speech language pathologists.

CMS has expanded which telehealth services can be furnished as “audio-only.” Generally, 42 CFR § 410.78(a)(3) requires that certain telehealth services must be furnished using, at minimum, audio and video equipment that allows two-way real-time interaction with the patient. CMS had previously announced an initial list of services that Medicare would pay for if furnished via audio-only telephone methods and has now broadened that list to include certain behavioral health and patient education services. That list is available here.

CMS is also increasing payments, retroactive to March 1, 2020, for these telephone visits to match payments for similar office and outpatient visits, thus incentivizing the use of telehealth. This would increase payments for these services from a range of about $14-$41 to about $46-$110.

Per the Cares Act, CMS is now paying for Medicare telehealth services provided by rural health clinics and federally qualified health clinics which previously could not be paid to provide telehealth expertise as distant sites.

Additional Provider-Specific Updates Under CMS Waivers

CMS has again updated its list of blanket waivers, here, with certain relevant updates highlighted below.

Teaching Hospitals

Teaching hospitals will also no longer face reduced payments for indirect medical education (“IME”) by increasing the number of temporary beds.

Additionally, a teaching hospital that sends residents to other hospitals will be able to continue to claim those residents in the teaching hospital’s IME and direct graduate medical education (“DGME”) FTE resident counts, if certain requirements are met. Specifically, for DGME, the presence of residents in non-teaching hospitals will not trigger establishment of per-resident amounts (“PRA”) at those non-teaching hospitals.

Finally, CMS is freezing the Inpatient Psychiatric Facility (“IPF”) teaching status adjustment payments at their values prior to the public health emergency. CMS intends this measure to incentivize accepting patients from an inpatient acute care hospital without being penalized by lower teaching status adjustments. In other words, a teaching IPF’s teaching status adjustment payments will be the same as they were on the day before the COVID-19 public health emergency was declared. The same applies to rural health clinic payments for the hospital systems that include rural health clinics.

These updates are included in CMS’s fact sheet for teaching hospitals, located here.

Hospital Outpatient Departments

Previously, hospitals were required to provide outpatient services within their respective existing outpatient departments, whether those were on-campus or off-campus. Now, in response to the need to keep patients isolated in order to minimize transmission of the COVID-19 virus, CMS will allow hospitals to provide outpatient services in other temporary sites that are typically not a part of the existing hospital. In the March 30 IFC, CMS waived the provider-based requirements set forth at 42 C.F.R. § 413.65 to allow hospitals to consider these temporary locations to be considered “provider-based” departments during the course of the public health emergency.

These temporary expansion locations so far have included converted hotels, parking lots, and even patients’ homes with temporary hospital designations. Under the new IFC, CMS will consider certain services, like behavioral health services, wound care, and drug administration to be considered “hospital outpatient department” services payable under Medicare when delivered at these temporary “provider-based” locations.

In 2015, Congress required “new” off-campus departments to be paid under non-OPPS reimbursement methodologies. Congress granted an exception for existing off-campus departments that billed under OPPS at that time. Since then, CMS has stated that excepted off-campus departments that relocate to another physical location would lose their special status. In the new IFC, CMS has adopted flexible rules which allow these “excepted off-campus” provider-based facilities to temporarily relocate and still receive OPPS reimbursement for their services. They can relocate to one or more temporary facilities, including the patient’s home. The relocation is temporary and lasts only for the duration of the public health emergency. Finally, providers do not need to seek permission from CMS for relocation. Rather, they must notify CMS of their need to relocate and the new location it considers to be “provider-based.”

These updates and other details are included in CMS’s fact sheet for hospitals, located here.

Inpatient Rehabilitation Facilities (IRFs)

As required by the CARES Act, CMS will now except freestanding inpatient rehabilitation facilities from certain regulatory requirements, including the 3 hour rule under which IRFs are required to provide a minimum amount of therapy per week to admitted inpatients. The purpose of this waiver is to enable free-standing IRFs to more easily accept patients from acute-care hospitals experiencing a surge in patients, including patients that do not require rehabilitation care.

This update is included in CMS’s fact sheet for IRFs, located here.

Ambulatory Surgery Centers (ASCs)

CMS is waiving the medical staffing requirement at 42 C.F.R. § 416.45(b) that medical staff privileges must be periodically reappraised, and the scope of procedures performed in the ASC must be periodically reviewed. CMS believes that loosening this requirement will allow physicians whose privileges will expire to continue practicing at the ambulatory surgical center, without the need for reappraisal, and for ASCs to continue operations without performing these administrative tasks during the public health emergency.

Long-Term Care Facilities (LTCFs) and Skilled Nursing Facilities (SNFs) and/or Nursing Facilities (NFs)

CMS added additional waivers and flexibilities for long-term care facilities related to provision ofphysician services at these facilities.

  • CMS is modifying certain requirements in 42 CFR § 483.75 relating to the requirement that long-term care facilities develop, implement, evaluate, and maintain an effective, comprehensive, data-driven Quality Assurance and Performance Improvement (“QAPI”) program. Specifically, CMS is narrowing the scope of the QAPI program requirements under § 483.75(b)–(d) and (e)(3) to allow LTCFs to focus on adverse events and infection control related to COVID-19.
  • CMS is postponing the deadline for completing the nurse aide training requirements at § 483.95(g)(1) for SNFs and NFs. The regulation requires the aide to receive at least 12 hours of in-service training annually. The training requirements will go back into effect at the end of the first full quarter after the declaration of the public health emergency concludes.
  • CMS is waiving the discharge planning requirement for LTCFs under § 483.21(c)(1)(viii) to allow the them to more rapidly discharge patients and otherwise expedite the movement of patients among care settings. Normally, the regulation requires LTCFs to assist residents and their representatives in selecting a post-acute care provider using data, such as standardized patient assessment data, quality measures and resource use. At this time, CMS is not waiving any of the other discharge planning requirements.
  • CMS is expanding the timeframe by which LTCFs must provide a resident a copy of their clinical records when requested by the resident. The regulation at 42 CFR § 483.10(g)(2)(ii) normally requires a two-working-day timeframe. Under the waiver, however, the timeframe is now ten working days.

These updates are included in CMS’s fact sheet for LTCFs and SNF/NFs here.

Home Health Agencies (HHAs) and Hospice

  • Previously, Medicare and Medicaid beneficiaries could only receive home health services with the certification of a physician. Nurse practitioners, clinical nurse specialists, and physician assistants can now provide the home health services, as mandated by section 3708 of the CARES Act. These physicians/practitioners can: (1) order home health services; (2) establish and periodically review a plan of care for home health services (e.g., sign the plan of care), (3) certify and re-certify that the patient is eligible for Medicare home health services.
  • CMS is modifying the requirement at 42 C.F.R. § 484.80(d) for home health agencies that each home health aide receives 12 hours of in-service training annually. The training requirements will go back into effect at the end of the first full quarter after the public health emergency concludes.
  • CMS is waiving the discharge planning requirement for HHAs under 42 CFR § 484.58(a) to allow the them to more rapidly discharge patients and otherwise expedite the movement of patients among care settings. Normally, the regulation requires HHAs to provide detailed information regarding discharge planning to patients and their caregivers, or the patient’s representative, in selecting a post-acute care provider. At this time, CMS is not waiving any of the other discharge planning requirements.
  • CMS is expanding the timeframe by which HHAs must provide residents a copy of their clinical records when requested by the patient. The regulation at 42 CFR 42 CFR § 484.110(e), normally requires a four-working-day timeframe. Under the waiver, however, the timeframe is now ten working days.
  • For HHAs and Hospice, CMS is waiving the requirement at 42 CFR § 418.76(h)(2) for Hospice and 42 CFR § 484.80(h)(1)(iii) for HHAs, which require a registered nurse, or in the case of an HHA a registered nurse or other appropriate skilled professional, to make an annual onsite supervisory visit (direct observation) for each aide that provides services on behalf of the agency. All postponed onsite assessments must be completed by these professionals no later than 60 days after the expiration of the public health emergency.
  • For HHAs and Hospice, CMS is modifying the QAPI requirements under 42 CFR § 418.58(a)–(d) for Hospice and § 484.65(a)–(d) for HHAs to narrow the scope of the program to allow concentration on infection control issues. This modification is designed to reduce the burden associated with maintain a full, broad-based QAPI program during the public health emergency, allowing providers to focus on COVID-19.
  • For hospice, CMS is modifying the annual training regulation at 42 CFR § 418.100(g)(3), which requires hospices to annually assess the skills and competence of all individuals furnishing care and provide in-service training and education programs where required. The waiver postpones this requirement until the end of the first full quarter after the declaration of the public health emergency concludes. CMS has not waived, however, the minimum personnel requirements at 42 CFR § 418.114.

These updates are included in CMS’s fact sheet for HHAs here, and Hospice here.

Community Mental Health Centers (CMHCs)

  • CMS is modifying the QAPI requirements under 42 CFR § 485.917(a)-(d) to allow CMHCs to use their QAPI resources to focus on challenges and opportunities for improvement related to the public health emergency by waiving the specific detailed requirements for the QAPI program’s organization and content. The modification is designed to allow CMHCs to reconfigure their QAPI programs, as needed, to adapt to specific needs and circumstances that arise during the public health emergency. CMS notes that these flexibilities may be implemented provided that they are consistent with a state’s emergency preparedness or pandemic plan.
  • CMS is waiving the requirement at 42 C.F.R § 485.918(b)(1)(iii) that prohibits CMHCs from providing partial hospitalization services and other CMHC services in an individual’s home. The waiver is intended to allow individuals to safely shelter in place while continuing to receive care and services from the CMHC.
  • CMS is waving the “40 percent rule,” the requirement at § 485.918(b)(1)(v) that CMHC provides at least 40 percent of its items and services to individuals who are not eligible for Medicare benefits. CMS intends this measure to facilitate the provision of services to Medicare beneficiaries without restrictions on the proportion of Medicare beneficiaries that they are permitted to treat at a time.

Blanket Waivers Applying to Multiple Providers

CMS is waiving the physical environment Condition of Participation for required scheduled inspection, testing and maintenance (ITM). The waiver applies to the regulations for hospitals (42 CFR § 482.41(d)), CAHs (§ 485.623(b)), inpatient hospice (§ 418.110(c)(2)(iv)), intermediate care facilities (§ 483.470(j)) and SNFs/NFs (§ 483.90). Under the waiver, CMS will permit facilities to adjust scheduled ITM frequencies and activities for facility and medical equipment.

Relatedly, CMS is also waiving certain Conditions of Participation for providers regarding compliance with life safety and healthcare facility code requirements to the extent that the facilities need to adjust their ITM schedules. CMS is temporarily modifying waiving these ITM provisions except for the following, which are considered critical.

  • Sprinkler system monthly electric motor-driven and weekly diesel engine-driven fire pump testing.
  • Portable fire extinguisher monthly inspection.
  • Elevators with firefighters’ emergency operations monthly testing.
  • Emergency generator 30 continuous minute monthly testing and associated transfer switch monthly testing.
  • Means of egress daily inspection in areas that have undergone construction, repair, alterations or additions to ensure its ability to be used instantly in case of emergency.

Finally, CMS is allowing providers to maximize their space by waiving the requirement that these facilities have an outside window or outside door in every sleeping room. This waiver is designed to allow providers to utilize facility and non-facility space that is not normally used for patient care to be utilized for temporary patient care or quarantine.


CMS is making adjustments to the financial methodology, and other requirements, to account for COVID-19 costs for ACOs. These changes include:

Financial Methodology

CMS will remove all Parts A and B payment amounts for episodes of care for treatment of COVID-19 from the determination of benchmark year and performance year expenditures. CMS intends this measure to help mitigate the potential for windfall shared savings and mitigate the potential for shared losses due to COVID-19.

Participation in the Shared Savings Program

CMS will forgo an application cycle in 2020 for an agreement start date of January 1, 2021 and offer a voluntary 1-year agreement extension for ACOs with agreement periods ending on December 31, 2020, including Track 1+ Model ACOs. Further, CMS will offer BASIC track ACOs participating in the glide path the option to forgo the first automatic advancement along the glide path’s increasing levels of risk and potential reward. BASIC track ACOs electing this option will be automatically advanced for performance year 2022 to the level at which they would have otherwise participated under automatic advancement if they hadn’t elected the option. Eligible ACOs may make voluntary elections to either extend their agreements, and/or maintain (or “freeze”) their current BASIC Track level for performance year 2021 starting June 18, 2020, and the anticipated final date to make these elections is September 22, 2020.

Telehealth and Beneficiary Assignment

For performance year 2020 and any subsequent performance year that starts during the public health emergency, CMS is including additional codes within the definition of primary care services used in determining beneficiary assignment under the MSSP. Specifically, when performing claims-based assignment, CMS will include services billed by an ACO professional consistent with the current definition of primary care services in § 425.400, but will also include remote evaluation of patient video/images HCPCS code G2010 and virtual check-in HCPCS code G2012, online digital evaluation and management services (e-visit) CPT codes 99421-23, and telephone evaluation and management service CPT codes 99441-43.

These updates are included in CMS’s fact sheet for MSSP, located here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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