The CARES Act provides financial relief to healthcare providers that are being hit hard by the COVID-19 public health emergency. Perhaps most notably, the CARES Act establishes a $100 billion Public Health and Social Services Emergency Fund (PHSSEF) through which the U.S. Department of Health and Human Services (HHS) may reimburse “eligible healthcare providers” – which include public entities, Medicare- and/or Medicaid-enrolled providers and suppliers, and others (as determined by HHS) that diagnose, test, or care for individuals with possible or actual cases of COVID-19 – for non-reimbursable expenses related to COVID-19.
All non-reimbursable expenses and lost revenues attributable to COVID-19 may qualify for funding. Examples of expenses for which funding may be awarded include those related to the following:
Despite this broad range of potential qualifying expenses, expenses that are reimbursed or obligated to be reimbursed by insurance or other mechanisms do not qualify for funding.
The CARES Act provides HHS with significant flexibility in determining how PHSSEF funds may be allocated. Eligible healthcare providers that wish to receive such funding must submit an application to HHS that includes a statement justifying need for the payment. The CARES Act indicates that applications will be reviewed – and funds will be awarded – on a rolling basis, but does not otherwise provide details regarding application deadlines or procedures. Funding recipients will be required to submit reports and maintain documentation to demonstrate compliance with conditions imposed for PHSSEF fund payments. We anticipate that HHS will issue guidance on the application process imminently, and we are closely tracking updates in this area.
In addition to the financial relief outlined above, the CARES Act also provides financial assistance by way of payment adjustments and expansion of funding to providers. The CARES Act provides relief from scheduled reductions in Medicare payments, both of a specific nature (e.g., delaying Protecting Access to Medicare Act (PAMA) reporting requirements for clinical laboratories which typically reduce Medicare laboratory payment rates and delaying scheduled reductions in Medicaid disproportionate share hospital payments through November 30, 2020) and a general nature (e.g., from May 1 through December 31, 2020, temporarily lifting the Medicare sequester, which would have reduced payments to providers by two percent). In addition, the CARES Act increases payments or funding to certain types of providers and suppliers through:
Further, the CARES Act allocates billions of dollars in other funding to support research, treatment, surveillance and various emergency-related activities. For example, the CARES Act provides funding for emergency preparedness activities as follows:
The CARES Act also alleviates certain COVID-19 related healthcare expenses for individuals. The Families First Coronavirus Response Act of 2020 waived cost-sharing arrangements for certain beneficiaries of federal healthcare programs with respect to COVID-19 testing and related services. The CARES Act goes a step further, expressly providing that any deductible or cost-sharing arrangement applicable to Medicare Part B and Medicare Advantage enrollees will not apply to the COVID-19 vaccine and its administration (once a vaccine has been developed and appropriately licensed by the federal government) and further refining private health insurance plans’ obligations as it relates to the novel coronavirus. For more details, refer to the Benefits and Obligations of Employers and Employees section of our CARES Act web page.
With respect to COVID-19 diagnostic testing, health insurance plans will pay the cash price as listed by the provider on their public internet website unless another price is negotiated. Each provider of a COVID-19 diagnostic test must make public the cash price for their COVID-19 test on a public website. The Secretary of HHS may impose civil monetary penalties of $300 per day on any provider that does not publicize their price on their website and has not completed a corrective action plan to comply with the requirements.
The CARES Act also aims to provide resources to healthcare providers to enable treating patients as safely and efficiently as possible. Some of the key ways the CARES Act works to increase access to resources and ease burdens for healthcare providers are as follows:
Increased Access to Telehealth Services – Building upon CMS’s existing 1135 telehealth waivers, and OIG’s policy regarding reductions or waivers of patient cost-sharing for telehealth services, the CARES Act provides flexibilities related to the provision of telehealth services during the emergency period. In addition to the funding for telehealth discussed above, these include, for example—
Relaxed standards for Post-Acute Care and Alternative Care Settings – The home health industry received a big win in the CARES Act related to its long desired expansion of practitioners beyond physicians who can certify patients for home health services. The CARES Act permanently changes current law to allow for mid-level providers (i.e., nurse practitioners, clinical nurse specialists, and physician assistants) to certify Medicare and Medicaid patients for home health services.
Moreover, in addition to the flexibility of hospice and dialysis facilities to utilize telehealth as discussed above, the CARES Act took other steps to enable utilization of and continuity of care in post-acute care settings even if typical standards are unachievable during the emergency period. For example:
Limitation on Liability for Volunteer Healthcare Professionals – The CARES Act limits liability for healthcare professionals, under federal and state law, who provide volunteer medical assistance during the COVID-19 public health emergency provided that certain conditions are met. Namely, in order for the limitation to apply, the relevant act or omission must, among other things, occur in the course of providing healthcare services that (1) are within the scope of the volunteer’s license, registration, or certification; and (2) do not exceed their scope of practice. In addition, liability protection does not apply in the context of (1) willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious flagrant indifference to the rights or safety of the individual harmed; or (2) services provided while under the influence of alcohol or an intoxicating drug. These provisions preempt any inconsistent state or local laws, unless such other laws provide greater protection from liability.
Changes to Confidentiality and Privacy Laws – Included in the CARES Act are provisions that significantly and permanently amend the statute governing the Confidentiality of Substance Use Disorder Patient Records, as well as direct HHS to implement amended regulations under 42 CFR Part 2. These changes permit covered entities and business associates that are subject to the Part 2 Regulations to have more flexibility in relying on patient consent for future permitted uses and disclosures of substance use disorder patient records; a more detailed analysis of these changes is forthcoming.
The CARES Act also directs HHS to issue guidance on permitted disclosures of Protected Health Information relevant to and in light of the COVID-19 public health emergency. Such guidance must be issued within 180 days after the enactment of the CARES Act.
We will continue to monitor developments and share updates related to the CARES Act and its impact on healthcare.