On Thursday, January 8, the U.S. Department of Health & Human Services (HHS) announced that the Public Health Emergency (PHE) declaration for COVID‑19 will be renewed for another 90 days, beginning on January 21 (the date the PHE was previously scheduled to expire) and extending through April 20, 2021.
This update enumerates the key regulatory flexibilities and funding sources that are linked to the PHE, as well as key emergency measures with independent timelines that are not directly affected by the PHE renewal.
HHS declared COVID‑19 to be a public health emergency effective January 27, 2020. This PHE declaration activated certain emergency authorities under Section 319 of the Public Health Service Act, and HHS has since issued several interim final rules that link certain flexibilities and mandates to the PHE timeline. Congress’s COVID-19 relief legislation has similarly tied various Medicare and Medicaid provisions to the PHE.
PHE declarations expire automatically after 90 days, and so HHS has had to issue periodic declarations renewing the PHE for COVID‑19. In the early months of the pandemic, HHS typically waited until mere days before the PHE’s expiration date before issuing a renewal, a practice that raised questions and concerns about the possibility of stakeholders needing to rapidly unwind dozens of crucial flexibilities. The last two renewals, however, were issued at least two weeks before the PHE expiration date. The early renewal provides some measure of comfort, although industry stakeholders should bear in mind that HHS retains the discretion to terminate the PHE at any time.
The following sections review certain key regulatory flexibilities and emergency funding sources that are—and are not—linked to the PHE.
Emergency Measures That Are Linked to the PHE
- CMS Interim Final Rules With Comment Period (IFCs). The Centers for Medicare & Medicare Services (CMS) has issued a number of IFCs, effective March 31, May 8, September 2 and November 2, 2020. Most of the IFCs’ regulatory changes are temporary and will expire at the end of the PHE. Early rules modified numerous Medicare and Medicaid rules regarding, for example, Medicare coverage of telehealth, supervision of medical residents, Medicare and Medicaid diagnostic testing, provider-based hospital departments, and the Medicare Shared Savings Program (MSSP). The September 2 IFC introduced a number of new requirements regarding COVID testing and reporting, particularly with respect to long-term care facilities. The most recent IFC created enhanced Medicare payments to hospitals for certain COVID‑19 treatments, imposed price transparency requirements for COVID‑19 diagnostic tests, and modified the parameters for the so-called “continuous coverage” requirement, which prohibits state Medicaid programs from disenrolling any beneficiaries until after the PHE expires (see below).
- Certain Measures Under the COVID-19 Response Legislation. Congress has passed several large legislative packages with COVID-related provisions, of which two contain significant regulatory flexibilities and funding that are linked to the PHE: the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. (Manatt has previously issued summaries of both FFCRA and the CARES Act.)
- The PHE-linked measures that are particularly relevant for healthcare providers include enhanced coverage and waived cost-sharing for COVID-19 tests and vaccines across payors, increased Medicare reimbursement for COVID-19-related hospital discharges, and loosened restrictions related to post-acute care facilities.
- With respect to Medicaid, FFCRA’s 6.2 percentage point boost to the federal Medicaid match rate remains in effect through the end of the calendar quarter in which the PHE expires, which would now be March 31. The same end date applies to the “maintenance of effort” requirement that prohibits restrictive new eligibility measures, as well as the mandate for states to cover, without cost-sharing, any FDA-authorized COVID‑19 test, treatment or vaccine. Meanwhile, the so-called “continuous coverage” requirement—which prohibits state Medicaid agencies from disenrolling any beneficiaries—lasts until the end of the month in which the PHE expires.
- The optional Medicaid eligibility group that states may adopt to expand coverage for testing and testing-related services to uninsured individuals (without regard to income) terminates at the end of the PHE.1
- Certain State Medicaid and CHIP Operational Flexibilities. In response to COVID-19, CMS has allowed states to rapidly implement various time-limited changes to their Medicaid programs and Children’s Health Insurance Programs (CHIP). Many of these changes will expire at the end of the PHE or shortly thereafter, including program modifications implemented via a Disaster Relief State Plan Amendment (SPA) or COVID-19 1115 demonstration project.2
- 1135 Waivers. Section 1135 of the Social Security Act authorizes HHS to modify certain federal healthcare requirements during an emergency to ensure sufficient access to services for Medicare and Medicaid beneficiaries, and to protect providers against penalties for good faith attempts to deliver services in emergency conditions. (See here for Manatt’s primer on the 1135 authority.) HHS and the Centers for Medicare & Medicaid Services (CMS) have issued dozens of nationwide “blanket” waivers and state-specific Medicaid waivers that, among other things, enhance providers’ ability to establish alternative sites of care or practice across state lines, expand Medicare telehealth coverage, and suspend many federal oversight and reporting requirements.
- In general, these waivers may remain in effect for only so long as there exist both (1) a PHE declared by HHS and (2) a Presidential declaration under either the National Emergencies Act (NEA) or the Stafford Act. Both conditions were satisfied effective March 1, per the President’s NEA declaration. As of the time of writing, the NEA declaration remains in effect, as do several declarations under the Stafford Act (described below).
- Waivers that broaden Medicare telehealth coverage last until the end of the PHE whether or not a qualifying presidential declaration remains in effect, pursuant to amendments made in the Coronavirus Preparedness and Response Supplemental Appropriations Act that Congress passed on March 6, 2020.
- HIPAA Enforcement Discretion. The HHS Office of Civil Rights (OCR) has issued guidance relaxing certain federal HIPAA privacy and security rules during the PHE, including with respect to permissible telehealth technologies and community-based testing sites. (See Manatt’s analysis here.)
- Fraud and Abuse Enforcement Discretion. The HHS Office of Inspector General (OIG) has issued guidance condoning, for the duration of the PHE, certain COVID response activities that might otherwise raise concerns under the Anti-Kickback Statute or the Physician Self-Referral Law (commonly referred to as the “Stark Law”). (Note that CMS has also suspended several Stark Law restrictions using 1135 waivers, as described above.)
- Flexibility Regarding Controlled Substances. The U.S. Drug Enforcement Administration (DEA) and the HHS Substance Abuse and Mental Health Services Administration (SAMHSA) have issued guidance allowing various flexibilities for Opioid Treatment Programs (OTPs) and other prescribers of controlled substances during the PHE, including with respect to “take-home” doses and telehealth-based assessments and counseling.
Emergency Measures That Are Not Linked to the PHE
- The President’s Stafford Act Declarations. These declarations authorize the Federal Emergency Management Agency (FEMA) to disburse disaster relief funds. In addition to a nationwide emergency declaration on March 13, the President has issued state-by-state major disaster declarations. These declarations all remain in effect as of the time of writing. FEMA will eventually declare an end to the “incident period” related to COVID-19, which will establish the time period during which certain types of expenses will be reimbursed.
- Emergency Use Authorizations (EUAs). In the context of a public health emergency, Section 564 of the Federal Food, Drug, and Cosmetic (FD&C) Act, the U.S. Food & Drug Administration (FDA) may issue EUAs that temporarily authorize unapproved medical products. Notably, the “public health emergency” determination for purposes of issuing EUAs is distinct from the more general PHE declaration under the Public Health Service Act, as discussed above. With respect to COVID-19, HHS deemed that a qualifying public health emergency existed as of February 4.
- Certain Measures Under the COVID-19 Response Legislation. Since the pandemic began, Congress has enacted several important policy changes that will remain in place after the PHE expires. Relevant measures appear in FFCRA, the CARES Act, the Paycheck Protection Program and Health Care Enhancement Act, and the December omnibus spending bill (titled the Consolidated Appropriations Act, 2021 (CAA)). Notable examples include:
- Several key reforms in the CAA, including:
- The prohibition on “surprise billing” (see Manatt’s analysis);
- Updates to the mental health coverage parity requirements (Manatt analysis);
- Various changes to Medicare coverage, reimbursement and drug pricing (Manatt analysis); and
- Various Medicaid coverage and policy changes, including new coverage for citizens of freely associated states, as well as delays in scheduled reductions to the allotment of Disproportionate Share Hospital payments and in the reporting requirements related to supplemental payments (Manatt analysis).
- Disbursements through the Paycheck Protection Program (PPP) (See Manatt’s webinar discussing lessons learned regarding the PPP)
- Permanent changes to the “Part 2” rules that govern the confidentiality of information held by certain substance use disorder (SUD) programs (as summarized by Manatt here)
- The HHS Public Readiness and Emergency Preparedness (PREP) Act. HHS’s PREP Act declaration, which went into effect February 4, shields certain individuals and entities from liability with respect to the manufacture, distribution, administration or use of certain “medical countermeasures,” defined in an advisory opinion as FDA-authorized drugs, devices and biological products used to diagnose, treat or prevent COVID-19. This immunity does not extend to willful misconduct. HHS has, in addition, authorized healthcare personnel to provide certain telehealth services across state lines, and has authorized pharmacists, pharmacy interns and pharmacy technicians in all states to order and/or administer COVID-19 tests, COVID-19 vaccines and certain pediatric vaccines, notwithstanding any limitations that may exist under state laws on scope of practice. HHS’s PREP Act declaration is currently scheduled to expire in October 2024 unless terminated earlier.
Stakeholders Should Plan for a Post-PHE World
The PHE has now been extended through late April, and may well be renewed again. At some point, however, the PHE will expire, as will many of the regulatory flexibilities described above. Moreover, HHS has the ability to terminate or modify certain flexibilities while the PHE remains in effect. Over the summer, for example, HHS and CMS began to reinstate various oversight requirements that had previously been suspended or relaxed (as described by Manatt here). Meanwhile, CMS has issued a number of 1135 waivers and other flexibilities with built-in grace periods. For example, certain flexibilities with respect to Medicaid eligibility and enrollment will last until six months after the PHE expires, although CMS has encouraged states to begin processing redeterminations and certain other types of eligibility-related actions.
Stakeholders are thus advised to continue planning for the eventual winddown of the many flexibilities that will sunset in tandem with the PHE. In late December, CMS released a 56-page document laying out expectations for state Medicaid agencies in the months leading up to, and following, the expiration of the PHE.3 For healthcare providers, the end of the PHE could mean a sudden resumption of full enforcement with respect to Medicare and Medicaid Conditions of Participation, the HIPAA privacy and security rules, and federal laws governing fraud and abuse.
Advocacy efforts are already underway to preserve certain emergency flexibilities on a permanent basis following the end of the PHE, and HHS itself released a Request for Proposal on November 25 soliciting public comments to “regarding which regulatory flexibilities used in the COVID-19 response should be kept temporary or made permanent.” It remains to be seen, however, which policies will ultimately be codified in new legislation or agency policy.
1 Although federal funding for the optional eligibility group ends at the end of the PHE, states may need to keep this group enrolled (without coverage) until the end of the month in which the PHE period ends in order to comply with FFCRA’s continuous coverage requirement, as explained in CMS guidance.
2 Medicaid Disaster Relief SPAs expire at the end of the PHE. CHIP Disaster Relief SPAs may continue past the end of the federal PHE if a qualifying state emergency declaration remains in place. COVID-19 1115 demonstration projects terminate, at the latest, 60 days following the end of the PHE. See here for a chart summarizing the expiration timelines of these and other federal flexibilities for Medicaid and CHIP. This chart was developed with support from the State Health and Value Strategies (SHVS) program, a grantee of the Robert Wood Johnson Foundation.
3 Manatt Health has, in addition, developed resources (here and here) to assist states as they plan for a post-PHE winddown of emergency flexibilities. These resources were developed with support from SHVS.