Wachler & Associates Health Law Blog

Published on: January 27, 2021

Uncertainty Surrounding CARES Act Reimbursement for Out-of-Network COVID-19 Testing

In response to the COVID-19 pandemic, Congress has attempted to make COVID-19 testing free to individuals by requiring commercial insurers to cover testing. However, federal guidance and action by commercial insurers have muddied the waters and left clinical laboratories in an unenviable position.

The Families First Coronavirus Response Act (FFCRA), passed by Congress on March 18, 2020, required commercial insurers to provide coverage of FDA-approved tests for the “detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19,” as well as items and services relating to a visit that results in such a test, at no cost to the beneficiary. Shortly thereafter, on March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act expanded the types of approved tests that were covered by the FFCRA and set the reimbursement rate for COVID-19 testing by out-of-network laboratories. Pursuant to the CARES Act, clinical laboratories must post their “cash price” for COVID-19 testing on their public website and insurers must reimburse out-of-network laboratories for COVID-19 testing at this “cash price.”

However, in June 2020, three government agencies, Department of Health and Human Services, Department of Transportation, and Department of Labor, released guidance that created several points of confusion regarding these requirements. For example, because the FFCRA and CARES Act only require coverage for testing for the “detection or diagnosis” of COVID-19, the June 2020 guidance excluded testing for employment, travel, and monitoring purposes from that which insurers were required to cover. Instead, the guidance required that the testing be done for the “individualized diagnosis or treatment” of COVID-19. Further, despite the FFCRA’s mandate that insurers cover items and services for visits that result in a COVID-19 test, the June 2020 guidance limited coverage to the testing itself and excluded from coverage “any other items and services.”

Published on: January 25, 2021

HHS Updates PRF Reporting Requirements

by Wachler & Associates, P.C.

On January 15, 2021, the Department of Health and Human Services (HHS) released further updates on the reporting requirements for entities that received payments from the Provider Relief Fund (PRF). HHS also pushed back the opening of the PRF reporting portal. The PRF is a $175 billion fund created by Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. HHS has subdivided the PRF into various general and targeted distributions.

Acceptance of a PRF payment is conditioned on, among other things, the provider agreeing to use the funds only for healthcare related expenses and lost revenue attributable to coronavirus, and to file reports demonstrating compliance with the conditions of the payment. Through previous guidance, HHS established that, when reviewing a recipient’s use of the PRF payment, it would first apply the payment to healthcare related expenses, then apply any remainder to lost revenue. The new guidance outlines three ways that recipients may calculate their “lost revenue attributable to coronavirus.”

First, a recipient may report the difference between 2019 and 2020 actual patient care revenue. Recipients who choose this method must submit to HHS their 2019 revenue from patient care payer mix, broken down quarterly. Second, a recipient may report the difference between 2020 budgeted and 2020 actual patient care revenue. Recipients who choose this method must submit their 2020 budget, which must have been in place prior to March 27, 2020. Third, a recipient may use “any reasonable method of estimating revenue.” Recipients who choose an alternate methodology must submit to HHS a description of the methodology and an explanation of why it is reasonable. HHS may reject the recipient’s methodology and require them to utilize one of the two pre-approved methodologies. Recipients should also be aware that HHS has warned that recipients who use alternative methodologies are more likely to face an audit of their use of the PRF payment.

Published on: January 21, 2021

CMS Implements New Prior Authorization Changes

by Wachler & Associates, P.C.

On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized the agency’s “CMS Interoperability and Prior Authorization” rule to improve the prior authorization process and give patients more control in accessing and understanding their health data. Under the rule, certain payers, such as Medicaid and CHIP managed care plans, state Medicaid and CHIP fee-for-service programs (FFS) and those that issue individual market Qualified Health Plans (QHPs) on the federally-facilitated exchanges (FFEs)) must create and utilize technology known as application programing interfaces (APIs). APIs are commonly used in smartphone applications, and when incorporated into electronic health records (EHR), can enable simple and immediate access to health data for providers.

Each payer obligated under this rule must build a documentation search program driven by an API, and make the program public, allowing providers to access health documentation and prior authorization requirements from various EHR platforms. Once a provider determines what each prior authorization requires, the authorization can then be submitted electronically. Moreover, the payers are required to implement, under the already established Patient Access API, laboratory results and other claims and encounter data, as well as information regarding a patient’s pending and active prior authorizations.

Payers must also communicate this data with a patient’s provider if asked, and with other payers, should a patient’s coverage or provider change. This will allow patients, providers, and payers to have all the necessary data when needed, automating the process and reducing the administrative burden on providers. As a result, providers will be less likely to work with incomplete health information and the likelihood of repeat prior authorization requests will decrease, resulting in more time the provider has to spend with the patient. Notably, Medicare Advantage plans are not included in this new rule and not subject to its requirements; however, CMS is continuing to consider whether Medicare Advantage plans should be included.

Published on: January 18, 2021

CMS Finalizes Changes to Medicare Advantage and Part D Prescription Drug Programs

by Wachler & Associates, P.C.

On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized a rule to help strengthen and streamline the Medicare Advantage and Part D prescription drug programs, with the goal to decrease enrollee cost sharing on expensive prescription drugs. Effective for the 2022 plan year, enrollees will be able to have advance notice and thus compare out-of-pocket costs for various prescription drugs. CMS estimates the final rule will result in $75.4 million in savings to the federal government over ten years.

According to CMS, the rule will provide drug cost transparency regarding out-of-pocket costs, especially for senior citizens, who may be unaware of prescription drug prices, changes in pricing, and on a fixed income. Additionally, Part D plans will have more power to negotiate lower prescription drug prices with drug manufacturers. Under the final rule, Part D plans must offer a real time benefit comparison tool for enrollees to receive information about lower cost alternatives under their plan. Using the tool, which must be offered by Part D plans by January 1, 2023, enrollees can compare cost sharing to find the best priced prescription drugs based on their health requirements. For example, if an enrollee’s provider recommends a certain prescription drug, the enrollee can search and see what the co-pay would be, and see if any similar drugs are more cost effective, allowing the individual to know exactly what he or she will pay before reaching the pharmacy.

Currently, in the Medicare Part D program, enrollees select the plan that best suits their health needs. Plans typically categorize prescription drugs into different tiers. All prescription drugs that fall into a plan’s specialty tier, the tier with the most expensive drugs, have equivalent cost sharing. With the final rule, Part D plans will have the ability to create a “preferred”, specialty tier of more expensive prescription drugs, that have lower cost sharing compared to the other specialty tier. This change will allow Part D plans to negotiate lower prices on the more expensive drugs, resulting in reduced out-of-pocket expenses for enrollees, if the plan categorizes these drugs on the “preferred” specialty tier.

Published on: January 15, 2021

HHS Increases Fairness and Notice in Civil and Administrative Proceedings

by Wachler & Associates, P.C.

On January 12, 2021, the Department of Health and Human Services (HHS) issued sweeping new directives regarding the procedures the Department will follow when relying on guidance documents, initiating enforcement actions, making jurisdictional determinations, and allowing prior notice and opportunity to be heard on agency determinations. These directives apply to civil and administrative enforcement proceedings and adjudications and take effect immediately.

First, HHS directed that the Department may not use guidance documents to impose binding requirements or prohibitions on persons outside of the executive branch except as authorized by law or expressly incorporated into a contract. That is, noncompliance with a standard or practice found only in a guidance document will not constitute a violation of the applicable statute or regulation. Further, the Department may refer to a guidance document in a civil enforcement action only if it has notified the public of the guidance in advance.

Second, HHS directed that the Department will only apply standards and practices, including in initiating a civil enforcement action or making an agency decision, that have been publicly stated in a way that would not cause unfair surprise. Of note, HHS defined “unfair surprise” to include when the Department initiates litigation following a lengthy period of conspicuous inaction.

Published on: January 13, 2021

OCR and HHS Issue Guidance on Health Information Exchanges

by Wachler & Associates, P.C.

On December 18, 2020, the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) issued new guidance on the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The guidance addresses important questions related to the definition of a health information exchange (HIE), when covered entities can disclose protected health information (PHI) to an HIE without the individual’s authorization, whether covered entities need a direct request from the public health authority (PHA) to disclose PHI, and whether a covered entity must provide notice to individuals regarding disclosures of PHI for public health purposes. In addition, the guidance provides examples for providers and entities relevant to HIPAA and the COVID-19 pandemic.

Questions addressed in the guidance include:

What is a health information exchange (HIE)?

Published on: January 8, 2021

Michigan to Distribute COVID-19 Vaccine to Skilled Nursing Home Facilities through the Pharmacy Partnership for Long-term Care Program

by Wachler & Associates, P.C.

On December 28, 2020, the Michigan Department of Health and Human Services (MDHHS) announced that skilled nursing home residents and staff members would begin to receive the Moderna COVID-19 vaccine immediately. This effort is made possible by the state of Michigan’s participation in the Pharmacy Partnership for Long-term Care (LTC) Program.

As a result of the COVID-19 pandemic, the Pharmacy Partnership for LTC Program is a partnership between the Centers for Disease Control and Prevention (CDC) and CVS, Walgreens, and certain participating Managed Health Care Associates, Inc. (MHA) pharmacies, to offer COVID-19 vaccination for residents and employees of nursing homes and assisted living facilities. Starting in November 2020, long term care facilities (LTCFs) could sign up for the program and choose a federal pharmacy partner. The CDC worked with local jurisdictions to match facilities with their selected pharmacy partner. Pharmacy partners then reached out to their assigned LTCF to coordinate the vaccine process. Through the program, LTCFs will receive the vaccine free of charge, and will be provided with end-to-end management of the vaccine process, including on-site administration of vaccinations, scheduling, and coordination of on-site clinic dates, ordering vaccines and necessary supplies, and the implementation of reporting requirements. The goal of the program is to reduce the burden on LTCFs and local health departments, while increasing vaccination to vulnerable, priority populations.

Skilled nursing home residents and staff are among the highest risk for severe illness and death due to COVID-19. In Michigan, over 5,000 LTC facilities, including 400 skilled nursing facilities, are enrolled in the vaccine program. There are approximately 91,000 skilled nursing residents and employees to be vaccinated, with the process estimated to require three weeks to completely vaccinate this population. Other facilities eligible for the Pharmacy Partnership for LTC Program, such as, assisted living facilities, personal care homes, residential care, adult family homes, adult foster homes, HUD supportive housing for the elderly and veterans’ homes, will soon receive vaccinations as well. Adult day care facilities, independent living facilities, facilities exclusively for children or adolescents, psychiatric rehabilitation or behavioral treatment facilities, and drug or alcohol rehabilitation centers are not eligible for the program.

Published on: January 5, 2021

CMS Releases New Measures Under Consideration Focusing on Increasing Data Innovation and Reducing Provider Burden

by Wachler & Associates, P.C.

On December 22, 2020, Centers for Medicare & Medicaid Services (CMS) released the 2020 list of Measures Under Consideration (MUC). The MUC is a list of quality and efficiency measures, based on data collected from providers, under consideration for adoption as rules under Medicare. The 2020 measures focus on reducing the administrative burden on providers, prioritizing health outcomes, and encouraging digital innovation, particularly regarding data collection and evaluation.

In accordance with the Meaningful Measures Initiative of 2017, digital innovation remains a top priority for CMS in developing quality measures. The Meaningful Measures Initiative was created to reduce the regulatory and reporting burden on providers and focuses on identifying the highest priority areas for quality improvement and measurement to improve patient outcomes. Since its launch, the Meaningful Measures Initiative has provided better quality metrics that are relevant to various providers. The 2020 MUC follow the Meaningful Measures Initiative by focusing on goals such as creating trackable and measurable outcomes, reducing healthcare disparities, cost efficiency, the modernization of reporting mechanisms, and reducing administrative obstacles for providers so they can better focus on quality care for patients, rather than paperwork. A majority of the measures utilize digital collection of data, rather than requiring providers to use traditional pen-and-paper data collection.

The 2020 MUC include:

Published on: December 21, 2020

Michigan Releases New COVID-19 Tools to Reduce Exposure and Risk

by Wachler & Associates, P.C.

The Michigan Department of Health and Human Services (MDHHS) has released two new tools to help reduce COVID-19 infections, deaths, and identify exposure risks, amidst the COVID-19 pandemic. The MI COVID Alert App is a free, anonymous app that alerts users if they have had a recent COVID-19 exposure. In addition to the MI COVID Alert App, the MDHHS launched CV19 CheckUp, a free, anonymous, online service that allows an individual to evaluate his or her personal COVID-19 risks.

In a partnership with MDHHS and the Michigan Department of Technology, Management and Budget (DTMB), the MI COVID Alert App was released statewide on November 9, 2020. The app is free, voluntary to use, and alerts users to recent COVID-19 exposures. Users can anonymously submit a positive COVID-19 test result as well, informing others nearby that they may have been exposed to the virus. When a person tests positive for COVID-19, the individual will receive a randomly generated PIN number from the local health department or State of Michigan, which the user can then enter into the app. If a user receives an exposure notification, this alerts the individual that he or she may have been within 6 feet for a minimum of 15 minutes of another individual with a positive test result. Notably, no information that can be used to personally identify or track a user’s location is required or shared; no names are necessary to use the app, and Bluetooth technology is used instead of GPS, to prevent location tracking. One month since its launch, the app has received 461,192 downloads. MDHHS claims the app has potential to decrease infections and mortality, even with only a 15% population use rate.

In addition to the app, on December 15, 2020, MDHHS launched the CV19 CheckUp tool. This free tool, available to all individuals in Michigan, offers users a personalized risk analysis for COVID-19. After completing an online questionnaire that takes into account an individual’s life situation and personal behavior, users are provided with a COVID-19 risk assessment as well as recommendations and connections to support services, if necessary. Although this tool is available for all Michigan residents, it is specifically created for older individuals, those 60 and over, who represent 24% of confirmed COVID-19 cases and 89% of confirmed COVID-19 deaths in Michigan. Like the MI COVID Alert App, the CV19 CheckUp tool is anonymous, and no name, email address, or other personal identifier is necessary to use and receive a personal risk and recommendation analysis. Rather than placing the burden on the individual to browse various websites and other COVID-19 related resources, the CV19 CheckUp tool uses data from the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO), as well as artificial intelligence, to analyze each person’s data, providing them with a risk level, an easy-to-understand evaluation of that risk, and steps that can be taken to minimize that risk.

Published on: December 18, 2020

HHS Increases Phase 3 of Provider Relief Fund and Will Begin Distribution

by Wachler & Associates, P.C.

On December 16, 2020, the Department of Health and Human Services (“HHS”) announced that it would begin Phase 3 of general distributions under the Provider Relief Fund (“PRF”) and that Phase 3 would be larger than initially planned. The PRF is a $175 billion fund created Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. The PRF is administered by HHS through the Health Resource Services Administration (“HRSA”). HHS has subdivided the PRF into various general and targeted distributions.

Earlier in 2020, HHS had made two general distributions under the PRF. The Phase 1 general distribution consisted of $50 billion in financial payments, released in two successive tranches of $30 billion and $20 billion, to healthcare providers based to providers who billed Medicare. The Phase 2 general distribution consisted of an additional $18 billion in financial payments to providers that billed Medicaid, dentists, assisted living facilities, and providers that were not eligible under the terms of Phase 1 due to a change in ownership.

On October 1, 2020, HHS announced the Phase 3 general distribution. The Phase 3 general distribution was initially planned to consist of $20 billion on financial payments to providers who were either excluded from the initial two phases, or who were eligible under the first two phases but required additional funding to cover ongoing financial losses accrued during the pandemic. The following providers are eligible for Phase 3 General Distribution funding: (1) Providers who have previously received, rejected, or accepted a General Distribution PRF payment; (2) behavioral health providers, including those that have previously received funding; and (3) healthcare providers that began practicing January 1, 2020 through March 31, 2020. All providers who receive payments must attest to receiving the payment and accept the associated Terms and Conditions.