Posted: April 1 at 4:45 PM
With the United States now leading the world in confirmed Coronavirus (COVID-19) cases, the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act attempts to specifically help support the health care industry and the ability of health care providers to respond to the crisis over the coming months.
The focus of this article is on the various resources specifically available for health care providers to help them navigate the current crisis, which are in addition to the many provisions designed to address potential shortages of medical supplies, in particular, personal protective equipment (PPE), prescription drugs and medical devices, as well as measures to alleviate health professional workforce shortages during the public health emergency.
Health care providers find themselves in the unique position of potentially being placed on the front lines of the defense against the Coronavirus pandemic while, at the same time, facing their own individual challenges to their business due to the impact of social distancing guidelines, the loss of revenue from elective procedures and the costs of preparation for the pandemic.
This article will attempt to summarize the material provisions of the CARES Act for an individual health care provider, in particular, providers such as physician practices or for-profit companies that are independent of any major not-for-profit health care system. Please note that this summary is not exhaustive and there may be additional provisions in the CARES Act that are of interest to your business. And, it should be noted that there may be additional COVID-19 relief for the health care industry, as there is already talk of a fourth phase of legislation once Congress reconvenes at the end of April.
Small Business Loan Program
For smaller health care providers, an assessment should be made with the provider’s respective professional advisors about the health care provider’s ability to access a forgivable loan available through the $349 billion “Paycheck Protection Program” (PPP). In the health care sector, the PPP may be particularly helpful for smaller health care providers such as physician practices and dental practices but note that smaller hospitals or health care providers affiliated with larger health systems or health networks may not qualify as a small business eligible for these loans. For a full discussion of the small business loan program under the CARES Act, please click here.
Business Tax Considerations
In addition to the provision of stimulus funds for certain businesses, the CARES Act included a number of major tax provisions, many of which will benefit businesses large and small, including, without limitation:
Every health care provider should consult with its professional advisors about the impact of these tax provisions on their respective business.
$100B Public Health and Social Services Emergency Fund
Among the most significant of the CARES Act provisions for health care providers is the new $100 Billion Public Health and Social Services Emergency Fund from which the Department of Health and Human Services (HHS) will reimburse “eligible health care providers” for “health care related expenses or lost revenues that are attributable to coronavirus.” Providers eligible for this fund include: public entities; Medicare or Medicaid enrolled suppliers and providers; and for-profit entities and nonprofit entities that provided diagnoses, testing or care for individuals with possible or actual cases of COVID-19.
Health care providers wishing to apply for such emergency funds must submit an application to HHS that includes a statement supporting the need for such funds. Applications will be reviewed and funds awarded on a rolling basis with HHS having significant authority to determine how the Emergency Funds may be allocated. The Emergency Funds will remain available until expended, so submission of an application sooner rather than later may be critical to obtaining access to such monies. The CARES Act does not provide details on the application procedures, but it is expected that HHS will issue guidance on the process shortly. It should be noted that the term “payment” in the bill is defined as a “pre-payment, prospective payment or retrospective payment as determined appropriate” so this will not be just retrospective payments, but can be prospective as well.
Medicare/Medicaid Payment Adjustment Provisions
The CARES Act includes a number of provisions adjusting reimbursement policies to assist health care providers caring for patients during the COVID-19 emergency period which are designed to be quick boosts to revenue streams, including without limitation:
Health Care Funding Opportunities
The CARES Act includes a number of other opportunities to receive grants or other assistance in the pursuit of certain policy objectives. These include but are not limited to:
Health care providers should consult with their respective professional advisors about areas of opportunity that may be available to their particular business.
Because telehealth offers flexibility for patients to access COVID-19 screening or care while avoiding exposure to others, the CARES Act includes a number of policy changes relating to telehealth services in order to increase access to care during the COVID-19 crisis. For instance, the CARES Act provides for the immediate expansion of telehealth under Medicare, eliminating a provision from the “Phase 1” package that required providers to have a pre-existing relationship with a patient in order to provide telehealth services during the emergency period. In addition, during the emergency period, FQHC’s and Rural Health Clinics will be able to serve as distant sites to provide telehealth services to patients in their homes and other eligible locations while being reimbursed at a rate that is similar to payment for comparable telehealth services under the physician fee schedule. In addition to the immediate telehealth opportunities, the Federal Communications Commission recently announced that it is launching a new telehealth program aimed at using the $200 million in new federal funding from the CARES Act to improve broadband connectivity for connected health services.
The CARES Act also allows high deductible health plan (HDHP) participants with health savings accounts (HSAs) to receive telemedicine free of cost-sharing for plan years on or before Dec. 31, 2021. A new safe harbor permits HDHPs to cover telehealth and other remote care services before participants have met their deductible. The legislation also makes clear that other coverage for telehealth and other remote care services while participating in a HDHP will not make an individual ineligible for HSA contributions. For employers offering or considering telemedicine as part of their COVID-19 strategy, these changes to the HSA rules ensure that employers with HDHPs can cover telehealth without any cost sharing.
Obligations for COVID-19 Testing
The CARES Act provides that all testing for COVID-19 is to be covered by private insurance and Medicare Part B, without cost-sharing. Health insurance plans are required to pay the cash price for such tests as listed on the health care provider’s public website unless another price is negotiated. Each provider of a COVID-19 diagnostic test must publicize the cash price for such a test on their website and failure to do so will subject the provider to civil money penalties of up to $300 per day that the violation occurs. The CARES Act also requires health insurers to cover “any qualifying coronavirus preventive service,” such as immunization, shortly after a recommendation by the U.S. Preventive Services Task Force or the Centers for Disease Control and Prevention (CDC).
On a personal note for any care providers, it should be noted the CARES Act limits liability for volunteer work by health care professionals during the COVID-19 emergency response. The CARES Act provides that a health care professional shall not be liable for care provided within the scope of the volunteer’s license and made in good faith, with certain exceptions for harm that was caused due to gross negligence or reckless misconduct. In addition, the CARES Act extends the liability immunity to manufacturers and sellers of certain essential medical devices during a public health crises to entities who manufacture, test, distribute, prescribe or administer “respiratory protective devices.”
Evolving Regulatory Environment
In addition to the recent CARES Act, the regulatory landscape for health care providers continues to evolve as the country responds to the COVID-19 pandemic. On March 30, the Centers for Medicare & Medicaid Services (CMS) issued blanket waivers to the Stark Law that permit certain arrangements between physicians and health care providers implemented in response to COVID-19 that would otherwise violate the Stark Law. Importantly, the waivers only apply to remuneration and referrals related to COVID-19.
If you have questions or would like to discuss further, please contact Jarod Moss.