Articles Posted in Health Law

One of the questions surrounding loans under the Paycheck Protection Program (“PPP”) was whether forgiveness of these loans would be offset against expenses and used to decrease future Medicare reimbursement. PPP loans were created under the CARES Act and are administered by the Small Business Administration (“SBA”). They were intended to help employers keep employees on the payroll during the economic crisis caused by the COVID-19 pandemic. These loans are eligible for forgiveness if the recipient uses them for their intended purpose and complies with the specified terms and conditions.

It was not initially clear what, if any, effect PPP loan forgiveness would have on Medicare reimbursement. However, a Medicare Administrative Contractor (“MAC”) caused concern when it informed some providers, primarily rural hospitals, that any PPP loans that were forgiven would be offset against their expenses. This measure, therefore, would decrease Medicare reimbursement in order to prevent duplicative payments from the federal government. CMS indicated shortly thereafter that this communication from the MAC was inaccurate and that further guidance would be forthcoming.

CMS recently issued guidance and clarified that PPP loan forgiveness would not be offset against expenses. The only circumstance under which CMS has indicated a PPP loan would be offset is if the loan amounts are attributable to specific claims, such as payments for the uninsured. The guidance goes on to remind providers that PPP and other SBA loans must be used for eligible expenses. Therefore, it is likely that any recipient of a PPP loan who uses it for eligible expenses and this is eligible for loan forgiveness would not be subject to offset.

On August 31, 2020, the Centers for Medicare and Medicaid Services (“CMS”) released an announcement regarding their newest proposed rule, the Medicare Coverage of Innovative Technology (“MCIT”). Department of Health and Human Services (“HHS”) Secretary Alex Azar assured that the proposed rule “would give Medicare beneficiaries faster access to the latest lifesaving technologies . . . by delivering Medicare reimbursement at the same time as FDA approval.”

Currently, it takes an excessive amount of time after FDA approval of a medical technology before Medicare covers the technology. This significant lag presents serious detriments to seniors who are denied access to lifesaving technologies because Medicare has failed to cover the technology in a timely manner. Under the MCIT proposed rule, when the FDA deems a technology a “breakthrough technology,” Medicare will provide simultaneous coverage with no waiting period. A breakthrough technology must be a technology which provides more accurate testing or treatment for life-threatening diseases or it must offer a treatment option for which no other approved treatment currently exists.

This new method of simultaneous coverage would last for a trial period of four years. It seems that CMS believes that the four-year limit will incentivize manufacturers to rapidly develop lifesaving technologies and breakthrough devices. Additionally, it would force manufacturers to develop evidence to show how these devices do, in fact, help Medicare beneficiaries. The four-year time limit would also streamline local coverage determinations across the country, such that all Medicare Administrative Contractors would allow reimbursement for these technologies. If these four years result in positive benefits for Medicare beneficiaries, CMS may consider extending the rule. Though this rule is primarily forward-looking, the MCIT proposed rule would also have Medicare covering breakthrough technologies developed in 2019 and 2020.

Throughout the onset of the 2019 Novel Coronavirus (“COVID-19”) pandemic, the Centers for Medicare and Medicaid Services (“CMS”) issued a variety of temporary waivers that expanded reimbursement under Medicare, Medicaid, and CHIP for telehealth services. Allowing reimbursement for telehealth encourages patients to reduce the amount of in-person medical encounters, which in turn helps reduce the spread of COVID-19.

In response to the success of the temporary telehealth reimbursement waivers, CMS has released a proposed rule to update the physician fee schedule for the 2021 calendar year. The proposed rule would make these telehealth reimbursement waivers permanent. CMS is accepting comments from the public until 5 pm (EST) on October 5, 2020.

Because so many temporary waivers have been issued, CMS is seeking to streamline which telehealth services will be included in the proposed rule­—CMS has suggested a three-category system to achieve this goal. Currently, there are two categories by which CMS evaluates new services for reimbursement by Medicare. Category 1 services typically include things such as consultations and office visits. These services are already on the Medicare telehealth services list. Category 2 services are generally more complex than an office visit or other Category 1 services but could be delivered via telehealth when accompanied with a proper code.

The Centers for Medicare & Medicaid Services (“CMS”) is required to implement a quality payment incentive program. One of the primary programs set forth by CMS is the Merit-based Incentive Payment System (“MIPS”). MIPS evaluates qualifying clinicians based on (1) quality; (2) promoting interoperability; (3) improvement activities; (4) and cost. The purpose of the MIPS program is to encourage higher quality and more efficient care.

On June 24, 2020, and in response to the 2019 Novel Coronavirus (“COVID-19”) pandemic, CMS announced the “MIPS Program Extreme and Uncontrollable Circumstances Exception.” If a MIPS-eligible clinician has been affected by an extreme or uncontrollable circumstance, they may submit an application for the re-weighting of the above-four MIPS performance categories. This re-weighting will offset the negative impacts COVID-19 has had on MIPS clinicians’ reimbursements. CMS defines an extreme and uncontrollable circumstance as a circumstance that would:

• Cause a clinician to be unable to collect information necessary to submit for a MIPS performance category;