The United States Senate has passed a $2 trillion phase three emergency package, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The Senate approved the CARES Act on a unanimous vote of 96-0, with three Senators in self-quarantine and another returning home out of an abundance of caution.  The CARES Act, assuming it is enacted into law in its current form, will provide emergency aid to support various sectors of the U.S. economy, including urgently needed aid to healthcare providers, as the country continues to battle the coronavirus pandemic.  The CARES Act is the largest economic rescue package in U.S. history and includes immediate aid for hospitals, as well as other healthcare providers and suppliers.  Below, we highlight certain provisions of the CARES Act.

Funding for Healthcare Providers:  The CARES Act provides $100 billion for the “Public Health and Social Services Emergency Fund” in aid specifically reimbursing providers for necessary expenses or lost revenue attributable to the treatment of COVID-19.  Eligible health care providers include public entities, Medicare or Medicaid enrolled suppliers and providers, and for-profit and not-for-profit entities as the Department of Health and Human Services (HHS) may specify.  HHS will review applications and make payments on a rolling basis under this provision.  This funding will be available for “construction of temporary structures, leasing or properties, medical supplies and equipment including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity.”[1]

The CARES Act delays cuts to Disproportionate Share Hospitals in the Medicaid program through November 30, 2020 and eliminates the 2% sequestration for Medicare payments through December 31, 2020.  The legislation also provides $1.32 billion in supplemental funding to community health centers on the front lines of testing and treating patients for COVID-19.  In addition, $250 million will be made available for grants or cooperative agreements with grantee or sub-grantee entities that are part of the Hospital Preparedness Program.

Expansion of Medicare Hospital Accelerated Payment:  The CARES Act expands the accelerated payment program to include additional hospitals such as critical access hospitals and children’s hospitals which will be eligible to participate and receive accelerated payments.  Upon request by a hospital, HHS may (i) make accelerated payments on a periodic or lump sum basis, (ii) increase the payment amount up to 100% (or 125% in the case of critical access hospitals), and (iii) extend the timeframe for recoupment of accelerated payments up to 120 days until the hospital’s claims are offset to recoup the funds and at least 12 months before being required to pay any outstanding balance in full.  Currently the accelerated payments program requires full recoupment within 90 days of the accelerated payment being issued.[2]

Medicare Hospital Inpatient Prospective Payment System:  For discharges of individuals diagnosed with COVID-19 during the emergency period, HHS will increase the weighting factor that would otherwise apply to the diagnosis-related group by 20%.  Discharges will be identified by diagnosis codes, conditions codes, or other means as necessary.[3]

Increase Access to Post-Acute Care:  For inpatient services provided by a rehabilitation facility during the emergency period, HHS will waive the requirement that patients receive at least 15 hours of therapy per week in an effort to increase the availability of post-acute care facilities.  For inpatient hospital services provided by long-term care hospitals, HHS will  waive the LTCH 50% rule and the site-neutral payment.[4]

Payment Rates for Durable Medical Equipment:  HHS will revise the payments rates for durable medical equipment under the Medicare program by applying the transition rule for items and services furnished in rural areas and non-contiguous areas to all applicable items and services furnished in such areas through the duration of the COVID-19 emergency period.[5]

COVID-19 Vaccine Coverage Medicare Part B:  A COVID-19 vaccine is covered under Medicare Part B without cost-sharing, and the CARES Act includes COVID-19 vaccines and administration as a Medicare Advantage benefit.[6]

Medicare Prescription Refills:  During the emergency period, a prescription drug plan or MA-PD plan will permit a part D eligible individual to obtain up to a 90-day supply of a covered part D drug in a single fill or refill.[7]

Home and Community-Based Services in Acute-Care Hospitals:  Certain state and home and community-based services, including self-directed personal assistance services and attendant services and supports, provided under the Medicaid program will be expanded for beneficiaries during a hospital stay.[8]

Pricing of Diagnostic Testing:  In an effort to protect health plans from price gouging over coronavirus tests, the CARES Act requires that existing health plan negotiated rates apply for all diagnostics.  The legislation also requires providers to publicize the cash price for tests on their public-facing website.  If the health plan or issuer does not have a negotiated rate, the plan or issuer will reimburse the provider in an amount equal to the cash price as listed on the website or negotiate a lower rate with the provider.

Privacy:  The CARES Act includes a policy change regarding federal privacy restrictions on substance use treatment records.  The change permits the sharing of patient records by a covered entity or business associate after obtaining an initial consent from the patient.  Once consent is obtained, records may be used or disclosed for purposes of treatment, payment, and health care operations as permitted by HIPAA.  Patients may still revoke consent.  The bill also includes anti-discrimination provisions and restrictions on law-enforcement use of these records.

Over-the-Counter Drug Review:  The CARES Act includes reforms to the over-the-counter drug industry, creating industry user fees to increase FDA oversight of nonprescription drugs.  In addition to further FDA oversight, the bill would streamline the process to change safety labels for products.

Telehealth:  The CARES Act calls for the provision of $200 million in funding to the FCC to “support efforts of health care providers to address coronavirus by providing telecommunications services, information services, and devices necessary to enable the provision of telehealth services during an emergency period.”  In addition, the legislation would enhance telehealth services for federally qualified health centers and rural health clinics.  The bill would allow a high-deductible health plan to cover telehealth services before a patient reaches the deductible.  The provision eliminates the requirement that the provider must have treated the patient before in order to cover a telehealth service during the emergency period.  CMS recently indicated that it would not be enforcing the requirement that a provider have an established relationship with a patient.

The full House is expected to vote on the CARES Act on Friday, March 27, and passage is expected.

President Trump has indicated that he will sign the CARES Act into law soon after House approval.

Norton Rose Fulbright attorneys will continue to follow on a daily basis COVID-19-related developments pertinent to health care providers and publish regular updates in the Health Law Pulse.

[1] Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, 116th Cong. Div. B, Title VIII (2020).

[2] H.R. 748, § 3719.

[3] H.R. 748, § 3710.

[4] H.R. 748, § 3711.

[5] H.R. 748, § 3712.

[6] H.R. 748, § 3713.

[7] H.R. 748, § 3714.

[8] H.R. 748, § 3715.