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On October 6, 2020, the Centers for Medicare & Medicaid Services (CMS) released guidance giving hospitals until December 9, 2020 to comply with COVID-19 reporting requirements or risk termination from the Medicare and Medicaid Programs. CMS also released reporting requirements for influenza data, which are currently optional but which CMS plans to make mandatory in the coming weeks.

The COVID-19 reporting requirements were initially published in guidance by the Department of Health and Human Services (HHS) on July 29, 2020 and were incorporated into a Final Rule on September 2, 2020. Hospitals are required to report, on a daily basis, several data elements relating to their COVID-19 response. These data points include inpatient bed and ICU bed capacity and occupancy, total number of ventilator and total number of ventilators in use, total suspected or confirmed positive COVID-19 patients, numbers of COVID-19 patients receiving certain treatments, emergency department overflow, and the previous day’s COVID-19 deaths. CMS indicates this information is used to coordinate the federal response to the virus.

Beginning October 7, 2020, hospitals that are not in compliance with the reporting requirements or that are not reporting currently began receiving notifications from CMS. These letters gave hospitals three weeks to bring their reporting into compliance. Hospitals that do not come into compliance will continue to receive a series of enforcement letters. On December 9, 2020, hospitals that have been out of compliance with the reporting requirements for 14 weeks (beginning September 2, 2020, the release of the Final Rule) will be sent by CMS a letter terminating them from the Medicare and Medicaid programs. The termination will be effective within 30 days of the date of the notification of termination. Any terminated hospital will have the right to appeal, the ability come into compliance to avoid termination, and the opportunity to avail themselves of a 30-day reasonable assurance period under 42 CFR § 489.57. CMS indicates that the 14-week compliance window only applies to current enforcement. Future enforcement actions related to these reporting requirements will be subject to a shorter process.

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At the beginning of the 2019 Novel Coronavirus (“COVID-19”) pandemic, Congress created the Provider Relief Fund (“PRF”) through the CARES Act in order to help providers who were financially impacted by COVID-19. In total, Congress approved $175 million for the PRF, to be distributed by the Department of Health and Human Services (“HHS”). Up until October 1, 2020, there were two phases for general funding, and multiple targeted allocations. The Phase 1 General Distribution allocated $30 billion to eligible providers, and the Phase 2 General Distribution allocated $20 billion to eligible providers. In addition to those general distribution, HHS also provided several targeted allocations, including to areas which were highly impacted by COVID-19, rural healthcare providers, and skilled nursing facilities

On October 1, 2020, HHS announced it would be allocating an additional $20 billion as its Phase 3 General Distribution. This Phase 3 General Distribution is intended for providers who were either excluded from the initial two phases, or who were eligible under the first two phases but require additional funding to cover ongoing financial losses accrued during the pandemic. The application period for this funding opened on October 5, 2020 and will end on November 6, 2020. HHS urges providers to apply as soon as possible. The applications are accepted on a rolling basis, so HHS asks that providers not apply the last day or week that the application period is open.

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.

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The Centers for Medicare & Medicaid Services (CMS) released the proposed Outpatient Prospective Payment System (OPPS) 2021 Rule on August 4th 2020. CMS uses the OPPS to decide the amount a hospital will receive for outpatient care for Medicare beneficiaries. Prior to the OPPS, payments for Medicare outpatient services were calculated using hospitals’ costs. Now, using the OPPS, payments for healthcare services are based on certain relative weights, a conversion factor, and geographic and input price adjustments. The goal of the proposed rule is to increase the opportunities for patient choice in healthcare, allow patients to be more active consumers in their healthcare, strengthen the power and success of Medicare, and decrease the burdens on providers. CMS is expected to release the final rule in December. The public comment period ended on October 5th 2020. The key changes in the proposed rule include:

  • Increasing Healthcare Options for Beneficiaries: One important change in the proposed rule is the complete removal of the Inpatient Only list (IPO) by 2024. Traditionally, the procedures and services on this list are only offered in the inpatient setting and thus not paid for under The Outpatient Prospective Payment System. The removal of the IPO would make about 300 services eligible to be paid for by Medicare in hospital outpatient situations. This change would also increase the amount of procedures that would be covered by Medicare in Ambulatory Surgical Centers (ASCs), offering patients more choice in deciding where to receive care and reducing any bias in CMS payment policies that might favor a certain type of care location compared to another.
  • 2021 OPPS Payment Methodology: Participating hospitals and certain healthcare providers can purchase specific Medicare covered outpatient medications at discounted prices under Section 340B of the Public Health Service Act (340B). In the 2018 OPPS final rule, a policy was adopted that Medicare would pay an adjusted Average Sale Price (ASP) minus 22.5% for specific drugs that are payable separately or biologicals obtained through 340B. The 2021 OPPS updates would change this to a proposed rate of ASP minus 28.7% for the same drugs and biologicals.
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Payment for the Medicare home health benefit depends on a series of complex criteria that must be supported by documentation in the medical record, including a face-to-face encounter, homebound status, and need for skilled services. The requirements for home health documentation change frequently and give rise to some of the common pitfalls in home health audits.

First, the face-to-face encounter requirement requires that a qualified provider, usually the certifying physician, have an encounter with the beneficiary within a certain timeframe, for reasons related to the reason that the beneficiary requires home health, and properly document the beneficiary’s need for home health. Until 2015, the qualified provider was required to include a “brief narrative” supporting the need for home health. This requirement has since been dropped in favor of a more holistic review of the medical record, and the signature and organizational requirements have changed as well in recent years.

Second, the documentation must support that the beneficiary is homebound. Homebound status turns on a complex test. To qualify for homebound status, the beneficiary must: (1) because of illness or injury, need the aid of supportive devices, special transportation, or another person in order to leave their residence or have a condition such that leaving home is medically contraindicated; and (2) exhibit a normal inability to leave home and leaving home must require a considerable and taxing effort. Over time, CMS has adjusted language to tighten these requirements. Certain infrequent absences from the home, such as for religious services or doctor’s appointments, will not disqualify a beneficiary.

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On Wednesday, September 30, 2020, the Senate passed the bipartisan government funding bill that will relax Medicare loan repayments in the wake of the 2019 Novel Coronavirus (“COVID-19”) pandemic. The House passed this bill the week prior to the Senate vote, and the President signed the bill into law the very same day that the Senate approved the bill.

Providers who initially received a loan through the CARES Act Advanced and Accelerated Payment Program (“AAP”) will now have one year from when the loan was issued before recoupment will begin. This gives providers much more time to repay these loans, as opposed to the initial 120-day recoupment period that was previously intact. Furthermore, the extension speaks to the AAP’s intent—AAP loans were meant to keep Medicare-reimbursed providers financially stable during the nationwide pandemic, which is still ongoing.

In addition to the recoupment period being extended, the recoupment rate will also be lowered. Initially, it would have been 100% recoupment until the loan was repaid. Moving forward, after the one year passes and recoupment begins, the Centers for Medicare and Medicaid Services (“CMS”) will recoup 25% for the first 11 months and then 50% for the following 6 months. Lastly, the interest rate on the AAP loans has been lowered from 9.6% to 4%.

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On September 25th 2020, and in response to the 2019 Novel Coronavirus (“COVID-19”) pandemic, the Centers for Medicare & Medicaid Services (“CMS”) announced a new Quick Start Guide and expedited review process to make it easier for laboratories pursuing Clinical Laboratory Improvement Amendments (“CLIA”) certification to offer COVID testing. These tools will reduce delays in and aid laboratories in understanding the certification process to help address the COVID-19 crisis.

CMS regulates all human laboratory tests through the CLIA program. The intent of the CLIA program is to provide safe, quality testing and ensure that results are accurate regardless of where the test was conducted. In addition to meeting quality assurance and performance standards to show that they can offer reliable and accurate testing, laboratories must also pay CLIA administration fees prior to certification. CLIA fees are calculated depending on the type of certificate requested by the laboratory and the amount and type of tests being performed.

CMS has implemented various measures to address the need to expand laboratory capacity during the COVID-19 public health emergency. CMS now allows pathologists to review laboratory data and results remotely to increase capacity while minimizing exposure risks to healthcare providers. CMS also stated that it will not enforce the requirement to have a separate certificate for laboratories participating at temporary COVID testing sites, as long as the primary location of the laboratory does possess a certificate. Furthermore, laboratories in hospital or university campuses in adjoining buildings and under the same director only need one certificate if located at the same physical location or address. This reduces the number of CLIA certificates labs must apply for, allowing them to begin COVID testing more rapidly.

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Revocation of Medicare billing privileges means much more than the simple loss of the ability to bill Medicare. It can also lead to loss of staff privileges or to termination by commercial payors, severely impacting the livelihood of a revoked physician or provider. Moreover, the Centers for Medicare & Medicaid Services (CMS) recently expanded its authority to issue more severe reenrollment bars and revocation is often accompanied by placement of the CMS Preclusion List, which further tarnishes a provider’s reputation by labeling them a “bad actor.” Given the devastating impacts that a Medicare revocation can have, CMS and Medicare Administrative Contractors (MACs) give surprisingly little heed to due process in meting out revocations.

In general, the due process clause of the U.S. Constitution prevents the government from interfering with a protected liberty or property interest without due process of law. Federal courts around the country are split on whether healthcare providers have protected interests at stake and what those interests may be. Some courts hold that providers have a property interest in their participation in the Medicare program due to the complex rules and regulations that provide payments to providers. Some courts hold that providers have a liberty interest in their reputation and integrity. Some grounds for revocations, such as “Abuse of Billing Privileges,” may impact a provider’s reputation more than others.

Once a protected interest is established, the essential elements of due process require that a person be given prior notice of an allegation against them and the opportunity to respond before a decision is made. However, CMS and MACs often revoke providers without notifying them of the allegations or giving providers the chance to respond. Instead, many providers receive a letter notifying them that the revocation decision has already been made. Providers then face the difficult task of trying to convince the agency to reverse its own decision, a decision in which the agency has already become entrenched, ­—the very situation due process is meant to prevent.

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The Centers for Medicare & Medicaid Services (CMS) announced on September 22, 2020 that the Medicare Prior Authorization Model for Repetitive, Scheduled Non-Emergent Ambulance Transport (RSNAT) will be expanded nationwide. Under this system, Medicare pays ambulances for the transport of patients to their scheduled, non-emergency healthcare appointments.

The prior authorization model was launched in 2014 by CMS in select states that displayed a higher utilization of RSNAT services. RSNAT services are essential medical services that have been previously scheduled and require non-emergency ambulance transportation for at least three round trips within ten days, or a minimum of once a week for at least three weeks. These types of ambulance services are covered under Medicare Part B, provided that the services are deemed medically necessary. Under the payment model, the ambulance transportation company must submit a prior authorization request to their Medicare administrative contractor (MAC) on behalf of the beneficiary and include a physician certification statement noting the medical necessity of the service. Once the physician certification statement has been reviewed, the MAC will issue a determination as to whether the beneficiary qualifies for RSNAT.

The purpose of the prior authorization model is to decrease Medicare spending through the reduction of ambulance transportation services that are not covered by Medicare and do not meet coverage standards, without negatively impacting access to care for beneficiaries. The prior authorization model began in 2014 with New Jersey, Pennsylvania, and South Carolina participating, and in 2016 expanded to Delaware, the District of Columbia, Maryland, North Carolina, Virginia, and West Virginia. The model will now be expanded nationwide as a result of the success in those nine states.

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On September 19, 2020, the Department of Health and Human Services (HHS) released the much-anticipated reporting requirements for providers who received payments under the Provider Relief Fund (PRF). 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. HHS previously amended the reporting requirements to require that any provider who received more than $10,000 from the PRF must file a report by February 15, 2021 and indicated that further details on reporting would be released at a later date. The new reporting system opens to payment recipients on October 1, 2020.

HHS breaks down the new reporting requirements into four date groups of data elements. First, providers must report Demographic Information, such as the Reporting Entity (whether the entity is reporting for a PRF payment it received or is reporting for a payment its subsidiary received), TIN, NPI, fiscal year-end date, and federal tax classification.

Second providers must report “expenses attributable to coronavirus not reimbursed by other sources.” Expenses attributable to coronavirus may be incurred in treating confirmed or suspected cases of coronavirus, preparing for possible or actual coronavirus cases, maintaining healthcare delivery capacity, etc. Providers who received between $10,000 and $499,999 in aggravated PRF payments need only report their net expenses that are attributable to coronavirus and not reimbursed by another source. These expenses need only be reported in two aggregate categories: (1) General and Administrative expenses and (2) other healthcare related expenses.  However, providers who received $500,000 or more in aggregate PRF funds must report in significant detail on sub-categories of these expenses.

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On September 14, 2020, Wachler & Associates posted a blog detailing all of the speculation surrounding recoupment of the CARES Act Advanced and Accelerated Payments (“AAP”) Program. As of then, CMS had not yet made a statement on when CMS would begin AAP loan recoupments. Originally, providers were told to expect to see recoupments on these loans 120-days from issuance of the loan. Many providers, however, had surpassed their 120-day time limit but did not see any indication that payments were being recouped to repay the loan.

On Friday, September 18, 2020, CMS Administrator Seema Verma confirmed that CMS would not begin recouping AAP loans until Congress passes legislation on the matter. This timely statement comes just before the House passed H.R. 8337, FY 2021 Continuing Resolution, through December 11, 2020 (Appropriations), on September 22, 2020. This bill would give providers with AAP loans one year from issuance before CMS begins recoupment, instead of the original time limit of 120-days from issuance. This bill would also lower the recoupment rate and the interest rate. It is not yet known when there will be a vote in the Senate on the bill, but the bill is expected to pass the Senate.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in the CARES Act and when to expect accelerated payment recoupment to begin. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.

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