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CARES Act offers relief for healthcare industry

March 30, 2020 Article 5 min read
Oliver Jurkovic
The $2 trillion CARES Act is allocating significant resources to ease COVID-19-related financial stress and operational challenges in the healthcare industry. Here are some of the key provisions for relief.
Medical records and a stethoscope

As the COVID-19 crisis continues to threaten the well-being of communities and the entire U.S. economy, the healthcare industry is facing significant financial stress and operational challenges. The federal government has responded with the massive $2 trillion Coronavirus Aid, Relief, and Economic Security Act or “CARES Act.”

Title III of the Act aims to protect our healthcare organizations and enable them to focus their efforts —both from preventative and treatment perspectives — on what truly matters: each and every citizen in this country.

We took a deep dive into the healthcare provisions of the CARES Act and created the following Q&A to provide an initial glimpse into four key areas affecting the healthcare community in the short term:

  • Medicare cash flow relief opportunities
  • Procedural and operational relief to promote better safety to caregivers and patients
  • Costs of COVID-19 testing, treatment, and preventative services
  • Other Medicare reimbursement and coverage provisions designed to assist healthcare providers immediately

What types of cash flow relief programs are the Medicare program making available to healthcare providers?

The Medicare “accelerated payment program” has been expanded during the COVID-19 emergency period to allow providers to request acceleration of cash payments from the Medicare program. Eligible providers include critical access hospitals, cancer hospitals, children’s hospitals, skilled nursing facilities, home health, and hospice providers. Providers can request up to 100% acceleration of payments for up to six months of services (125% for critical access). Payments for hospitals can be requested as a periodic amount or as a lump sum. The Act also revises the repayment terms, extending the period for repayment to 12 months or longer for hospitals. All other Part A providers can request up to 100% acceleration of payments related to Part A services for up to three months of services with repayment of the accelerated payments to begin 120 days after the date of issuance of the payment.

The Medicare “accelerated payment program” has been expanded during the COVID-19 emergency period to allow providers to request acceleration of cash payments from the Medicare program.

What types of procedural and operational relief is the Act providing to address patient throughput and overall safe being of patients and caregivers?

The Act is providing the following relief:

  • Temporarily waiving the requirement for a face-to-face visit for home dialysis.
  • Allowing the use of telehealth to conduct face-to-face encounters with physicians and nurse practitioners prior to hospice care.
  • Allowing for remote patient monitoring for home health services during the emergency period.
  • Waiving the 15 hours of therapy requirement in an inpatient rehabilitation setting.
  • Enhanced telehealth reimbursement to FQHCs and rural health centers and the sheltering of costs related to telehealth from negatively impacting future rate setting.

How will diagnostic testing, preventative services, and vaccines for COVID-19 be covered?

The CARES Act updates language in The Families First Coronavirus Response Act to include more specific details around diagnostic testing for the detection and diagnosis of the virus that causes COVID-19. Group health plans and health insurance issuers shall provide coverage for the items and services furnished during the emergency period. Cost-sharing requirements or prior authorization of other medical management requirements shall not be imposed during this time.

Group health plans and health insurance issuers offering group or individual health insurance will be required to cover any qualifying COVID-19 preventative service. This includes a vaccine, if one becomes available.

Does the Act state any additional reimbursement to providers related to care given directly to COVID-19 patients?

During the emergency period, a COVID-19 diagnosis for Medicare patients will receive a 20% add-on to the DRG weighting utilized to determine the payment.

In addition, an enrollee shall reimburse the provider for diagnostic testing according to the status of a previously established negotiated rate.

  • If put into effect prior to the public health emergency, the negotiated rate between the health plan/issuer and provider shall apply throughout the period of declared emergency.
  • If a negotiated rate doesn’t exist prior to the declared emergency, the provider shall be reimbursed in an amount equal to the cash price for such services, or at a negotiated rate less than the cash price.
    • During the emergency period, each provider of a COVID-19 diagnostic test must make the cash price public on the provider’s public website.

What additional services will be covered by Medicare and commercial plans, and what out-of-pocket costs will be waived?

The Act provides a safe harbor for high deductible plans to bypass deductibles for telehealth and other remote care services. To promote access to and utilization of telehealth services and technologies, $29,000,000 is being provided for fiscal years 2021-2025. At least 50% of these funds will be awarded to project in rural areas.

The Act also dedicates $79,500,000 in aid to rural and underserved populations and communities for fiscal years 2021-2025.

How long will the Medicare 2% sequestration be suspended for providers?

The sequestration payment reduction will be suspended from May 1, 2020 through Dec. 31, 2020.

How will physician fees be affected?

The Act increases payments for the work component of physician fees in areas where labor cost is determined to be lower than the national average through Dec. 1, 2020.

How are volunteer healthcare professionals being protected?

There’s a limitation on liability being afforded to volunteer healthcare professionals for any harm caused by an act or omission of the professional in the provision of healthcare services during the COVID-19 pandemic. This includes care being given to patients with confirmed positive and suspected COVID-19 diagnoses.

How is the federal government’s funding of Medicaid DSH plans being impacted by the CARES Act?

Cuts to Medicaid DSH that were scheduled to go into effect in May are delayed until Dec. 1, 2020. State Medicaid program changes as a result of the Act will be shared as information becomes available.

The sequestration payment reduction will be suspended from May 1, 2020 through Dec. 31, 2020.

Our healthcare experts are preparing updates on additional provisions of the CARES Act. In the meantime, if you have any questions, please reach out to us.

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