Legal Insights and Perspectives for the Healthcare Industry

The Centers for Medicare and Medicaid Services (CMS) issued an Open Payments COVID-19 Announcement on March 25 saying that it planned in some cases to exercise enforcement discretion with respect to late or incomplete data reporting. CMS stated that, although it is sensitive to the challenges caused by the coronavirus (COVID-19) pandemic, it does not have the authority to waive the statutory requirement that Program Year 2019 Open Payments data be submitted by the March 31, 2020, deadline or to postpone the publication deadline of June 30, 2020. CMS will, however, “exercise enforcement discretion with respect to submissions completed after the statutory deadline due to circumstances beyond the reporting entity’s control associated with the pandemic,” and will consider the impact that these circumstances have on reporting entities’ ability to report in a timely, accurate, and complete manner in deciding whether to impose civil monetary penalties.

As we noted in our previous Health Law Scan blog CMS Issues Program Instructions for Medicare Telehealth Waiver, CMS issued program instructions on March 17 to implement the Medicare telehealth waiver in response to the coronavirus (COVID-19) crisis. We noted that the Office of Inspector General (OIG) and the Office for Civil Rights (OCR) at HHS simultaneously issued policy statements with respect to their exercise of enforcement discretion regarding, respectively, telehealth-related copay waivers and HIPAA violations. These coordinated policy announcements represent a concerted effort by federal government agencies to broaden telehealth flexibility to immediately promote and expand the use of technology to help Medicare beneficiaries follow guidance from the CDC, including practicing social distancing, thereby enabling vulnerable beneficiaries and beneficiaries with mild symptoms to access the care they need from their homes. Not only will this help protect Medicare beneficiaries who are particularly vulnerable to COVID-19 infection, it presumably will help deter the spread of the virus and ease the burden on already over-stressed emergency departments, doctor’s offices, and other healthcare facilities.

In the face of the coronavirus (COVID-19) pandemic, the US president’s National Emergency Declaration, issued on March 13, set in motion several actions required of other agencies to provide the regulatory relief needed to ensure that healthcare providers have flexibility in responding quickly to the growing need in the United States.

First, the secretary of the US Department of Health and Human Services (HHS) issued a Waiver or Modification of Requirements under Section 1135 of the Social Security Act on March 13, with a retroactive effective date of March 1, 2020 (1135 Waiver). The 1135 Waiver suspends certain Medicare, Medicaid, and Children’s Health Insurance Program requirements “only to the extent necessary, as determined by the Centers for Medicare & Medicaid Services” to meet the needs of those programs’ participants and to assure that providers furnishing care to such participants in good faith are reimbursed.

CMS issued program instructions on March 17 (through a Fact Sheet and FAQ) to implement the Coronavirus Preparedness and Response Supplemental Appropriations Act (CPRSAA), which was enacted on March 6 in response to the coronavirus (COVID-19) crisis. Telehealth and other healthcare stakeholders have been waiting for these program instructions to be released to determine how CMS will fully implement the Medicare telehealth waiver.

Traditionally, under the Medicare program, professional telehealth services are restricted by statute to originating site locations (defined generally as healthcare facilities and physician offices) that are located in rural areas or outside of Metropolitan Statistical Areas (MSAs). Medicare beneficiaries generally would not be allowed to receive telehealth services in their home. CPRSAA waived both of these requirements, enabling Medicare beneficiaries across the country (regardless of urban or rural location) to receive telehealth services, including in their home, from a doctor in a remote location directly through their smart phone or computer.

In this LawFlash, Morgan Lewis healthcare industry partner Susan Feigin Harris analyzes recent CMS guidance on Emergency Medical Treatment and Labor Act (EMTALA) requirements and implications related to the coronavirus (COVID-19). The guidance, which provides advice concerning EMTALA screening, stabilization, transfer, and recipient hospital obligations, “reminds the industry of the rare circumstance in which EMTALA obligations may be waived.” Flexibility in managing EMTALA requirements regarding individuals with suspected or confirmed COVID-19 are also addressed.

Read the LawFlash

Morgan Lewis lawyers are here to help guide healthcare organizations through this fluid public health crisis. Please see our dedicated webpage on Responding to the Coronavirus for updates and developments as they unfold.

The Centers for Medicare & Medicaid Services (CMS) issued a statement on March 9 related to actions the agency is taking to protect the health and safety of patients and providers. CMS urges providers to stay abreast of CDC guidance on the 2019 Novel Coronavirus (COVID-19). As of March 9, CMS has issued COVID-19-specific guidance for hospice providers and nursing homes. Both guidance documents are linked in the CMS press release. Morgan Lewis will continue to monitor CMS statements related to COVID-19, including any regulatory relief for providers, as those statements are made available.

The Centers for Medicare & Medicaid Services (CMS) unveiled the Healthy Adult Opportunity initiative on January 30. Morgan Lewis partner Susan Feigin Harris recently spoke with Fierce Healthcare about the CMS block grant, and specifically discussed the possibility of the program seeing a challenge in court. “It is a classic constitutional case of who gets to allocate funding and who gets to stop allocating funding and that is Congress,” she said.

Read the full Fierce Healthcare article >>

The Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare issues, recently finalized and approved a series of recommended updates on January 16 that include payment reductions for hospice and home health.

Hospice

MedPAC recommendation: Hold Medicare base payment rates for hospice steady with no increase, and wage-adjust and reduce the hospice aggregate cap by 20%.

MedPAC addressed its concerns that “hospice payment rates may be higher than needed to ensure appropriate access to care” and recommended no payment update for hospice in fiscal year 2021. With respect to the aggregate cap, MedPAC recommended a wage-adjusted cap to improve equity across providers because high-wage-index areas are more likely to exceed the cap than low-wage-index areas (e.g., a hospice in San Francisco will reach the aggregate cap more quickly than one in Topeka, Kansas). MedPAC further asserted that a 20% cap reduction will improve payment accuracy by focusing payment reductions on hospices with long stays and high margins, characterized by MedPAC in its December meeting as “disproportionately for-profit, freestanding, urban, small and newer entrants into the Medicare program.” If adopted, this would be the first major aggregate cap change in many years.

Home Health

MedPAC recommendation: Reduce the calendar year (CY) 2020 Medicare base payment rate for home health agencies by 7%.

While acknowledging major revisions to home health payments in 2020, including a new unit of payment (Patient-Driven Groupings Model (PDGM)), the removal of therapy as a payment factor, and a new case mix system, MedPAC officials cautioned in the December meeting that Medicare has a history of overpaying for home health “since the PPS was established.” To that end, MedPAC commissioners voted in January to recommend that Congress reduce the CY 2020 Medicare base payment rate for home health agencies by 7% for CY 2021. Noting “home health payment adequacy indicators are positive,” MedPAC officials concluded that their recommended reduction “should not affect the willingness of providers to serve beneficiaries.” However, the agency also recognized that it “may increase cost pressures for some providers.”

What’s Next?

The recommendations will be included in the MedPAC’s March 2020 report to Congress on Medicare payment policy. Mandated by law, these reports hold great sway with Congress and the Centers for Medicare and Medicaid Services (CMS). However, neither Congress nor CMS is required to follow the MedPAC recommendations.

Continuing to look for ways to reduce the Medicare administrative law judge (ALJ) appeals backlog, CMS has explored enhancing the role of Qualified Independent Contractors (QICs) to resolve disputed claims earlier in the appeals process. Its main pilot in this area is the Telephone and Reopening Process Demonstration (Demonstration), which affords certain providers the ability to present their case to a representative of the QIC and have a live discussion about the merits of the appeal. While initially limited to durable medical equipment claims, CMS expanded the Demonstration to home health and hospice claims within the Part A East QIC jurisdiction. Following the expansion, C2C Innovative Solutions—the Part A East QIC—began offering telephone discussions and reopenings to hospice and home health providers within Medicare Administrative Contractor (MAC) jurisdictions J6 and J15, covering Alaska, American Samoa, Arizona, California, Colorado, Delaware, District of Columbia, Guam, Hawaii, Idaho, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, Northern Mariana Islands, North Dakota, Oregon, Pennsylvania, Puerto Rico, South Dakota, US Virgin Islands, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. The Demonstration may provide home health and hospice companies with an effective new tool in the Medicare appeals process to help manage very long delays in the ALJ appeals process.