On Wednesday, October 28, 2020, the Centers for Medicare & Medicaid Services (“CMS”), with the Departments of Treasury and Labor, issued a fourth interim final rule (“IFR”) with comment period addressing the public health emergency (“PHE”). The policies in the IFR will become effective upon publication in the Federal Register.
The IFR’s stated goal is that “every American has timely access to a COVID-19 vaccine without any out-of-pocket expenses, no matter their source of coverage, or whether they are covered at all.” The IFR provides details regarding the out-of-pocket costs for a COVID-19 vaccine once one is approved by the U.S. Food and Drug Administration (“FDA”) and ensures that providers are reimbursed for administering these vaccines. The IFR also announced Medicare payment rates for COVID-19 vaccine administration. The Medicare payment rates for providers under Part B that administer single-dose vaccines will be $28.39, and for vaccines that require multiple doses, the payment rate for the first dose will be $16.94 and $28.39 for the second.
The IFR states that because there are still many unknowns related to COVID-19 vaccines, such as “the possibility of differential costs associated with each COVID-19 vaccine and any necessary storage and administration requirements,” CMS will “establish specific coding and payment rates through technical direction to the Medicare Administrative Contractors, including instructions to make this information available to the public”, once the FDA approves a vaccine. CMS will post any information related to coding, payment, and billing for COVID-19 vaccines on its website.
Furthermore, under this IRF, Medicare, Medicare Advantage, Medicaid, CHIP and most commercial plans will all be required to waive cost-sharing requirements for a COVID-19 vaccine when it becomes available. CMS further clarifies that plans and issuers that are subject to Section 2713 of the Public Health Service Act must also cover, without cost sharing, the recommended preventative services that are integral to furnishing a COVID-19 specimen, regardless of whether these items and services are billed separately. CMS will also require plans and issuers to cover these preventive services whether or not they are delivered by an in-network or out-of-network provider. The plan or issuer will also be required to reimburse these out-of-network providers for the preventive service in an amount that is “‘reasonable,’ as determined in comparison to prevailing market rates for such [a] service.”
CMS also plans to cover the cost of a vaccine for uninsured individuals by using funds from the Provider Relief Fund that was passed as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and these funds will be administered by the Health Resources and Services Administration (“HRSA”).
The IFR increases reimbursement for hospitals that use newer COVID-19 therapies during the PHE. Under the Inpatient Prospective Payment System (“IPPS”), CMS adds a New COVID-19 Treatments Add-on Payment (“NCTAP”). The IFR states that as new COVID-19 treatments become available, CMS believes that it is “appropriate” to increase the current IPPS payment amounts in the inpatient setting to mitigate any “potential financial disincentives for hospitals” that provide these new COVID-19 treatments. The NCTAP will pay hospitals the lesser of:
“(1) 65 percent of the operating outlier threshold for the claim or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment, including the adjustment to the relative weight under section 3710 of the CARES Act, for certain cases that include the use of a drug or biological product currently authorized or approved for treating COVID-19.”
In the outpatient setting, CMS modified the Outpatient Prospective Payment System to allow for a separate payment during the remainder of the PHE for when a COVID-19 treatment is provided at the same time as a Comprehensive Ambulatory Payment Classification service.
The IFR implements a CARES Act price transparency requirement that providers of COVID-19 diagnostic tests make their “cash price(s)” of such tests available to the public on their website during the PHE. CMS will impose a civil monetary penalty (“CMP”) on providers who fail to post the cash price for such diagnostic tests and do not complete a corrective action plan in compliance with Section 3202(b)(2) of the CARES Act. The maximum CMP that CMS may impose is $300 per day of non-compliance.
Section 6008 of The Families First Coronavirus Response Act included a 6.2 percent increase to state Medicaid program’s federal medical assistance percentage during the PHE. However, states were required to follow certain maintenance of effort requirements such as maintaining eligibility and enrollment during the PHE. The IFR provides states with greater flexibility, implementing new regulations that requires states to maintain a “validly enrolled beneficiary” eligibility in one of three tiers of coverage through the end of the month in which the PHE ends. CMS concurrently released a Fact Sheet providing additional information about this policy.
Finally, Section 1332 of the Patient Protection and Affordable Care Act (“ACA”) created State Innovation Waivers that have been used by 14 states to create state-based reinsurance programs to help provide affordable health coverage. A Section 1332 Innovation Waiver allows states to opt-out of certain mandates of the ACA if a state can demonstrate the waiver will provide residents of the state with access to high quality health care while maintaining basic ACA protections, including providing comprehensive and affordable coverage to state residents. The administration previously relaxed the regulatory standard for approving 1332 waivers and the State of Georgia received approval for the Georgia Access Plan that will implement a reinsurance program and require individuals to enroll in health insurance coverage through a broker or directly from a health insurer. More information may be found here. The IFR adds flexibilities for Section 1332 State Innovation Waivers by allowing the U.S. Secretary of the Department of Health and Human Services (“HHS”) and the Secretary of the Department of Treasury to modify the public notice requirements and post-award participation requirements to expedite a decision on a proposed waiver request during the PHE. In this IFR, CMS provides examples of modifications that could be made during the PHE such as modifying or waiving the requirement that states hold public hearings prior to submitting an application or to modify state and/or federal comment periods to be shorter than 30 days.
This IFR with comment period will become effective on the date it is published in the Federal Register. Comments to the IFR must be submitted no later than 60 days.
CMS also published a fact sheet here, a blog here, and a recording of the conference call discussing the IFR on Friday, October 30 is available here.
Norton Rose Fulbright attorneys will continue to provide relevant updates on the COVID-19 PHE on the Health Law Pulse.