COVID-19 Roundup: CARES Act Headed to House of Representatives

March 27, 2020
AJMC Staff

The bill includes $100 billion for hospitals; some are concerned that the bill, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, does not go far enough, particularly for Medicaid.

The $2-trillion pandemic legislation passed by the Senate and expected to be taken up by the House of Representatives Friday has several provisions aimed at healthcare systems.

But some are concerned that the bill, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, does not go far enough.

The American Hospital Association said it was pleased with the bill, which includes $100 billion to reimburse eligible healthcare providers for healthcare-related expenses or lost revenues (not otherwise reimbursed) that are directly attributable to coronavirus disease 2019 (COVID-19). Eligible providers are defined as public entities, Medicare- or Medicaid-enrolled suppliers and providers, and other for-profit and nonprofit entities as specified by the HHS secretary.

It also includes an elimination of the Medicare sequester from May 1 through December 31, 2020, as well as a 20% add-on to the diagnosis-related group rate for patients with COVID-19, applied during the national emergency to patients treated at inpatient prospective payment system (IPPS) urban and rural hospitals

The bill includes an expanded existing option for hospitals to request and receive "accelerated" Medicare payments, increasing the amount most hospitals could receive based on prior payments to 100% (from 70%); critical access hospitals would be eligible to receive up to 125%. Hospitals would have 4 months until recoupment would begin and at least 12 months before having to pay off the payments in full.

It also waives 2 long-term care hospital (LTCH) policies: the “50% Rule,” which requires that greater than 50% of patients be paid a standard rate to maintain an LTCH designation, and the site-neutral payment policy, which uses an IPPS-level payment rate for lower-acuity patients. Te bill also would waive the inpatient rehabilitation facility 3-hour rule, which requires that patients receive at least 3 hours of therapy a day. This change is aimed at allowing post—acute care providers increase the capacity of the healthcare system without penalty, during the emergency period.

The legislation would eliminate the $4 billion in Medicaid Disproportionate Share Hospital cuts in fiscal year (FY) 2020 and reduce the cut for FY 2021 to $4 billion from $8 billion. Implementation of the FY 2021 cuts would be delayed until December 1, 2020. The legislation would not add any additional cuts after the current end date of FY 2025.

It allows for small business loans for organizations with less than 500 employees (both full time and part time). These loans may be up to $10 million and may be forgivable. Both for-profit and nonprofit hospitals would be eligible for these loans, but affiliation rules would apply, to determine whether a smaller organization is or is not part of a larger organization.

Although the legislation expands unemployment benefits, including adding gig workers, and adds direct cash payments to households, not everyone is convinced the bill goes far enough.

The legislation includes a $150 billion Coronavirus Relief Fund to help fill state and local government budget holes, but more state fiscal relief will be needed, according to the Center on Budget and Policy Priorities, which called for an additional increase in the federal share of state Medicaid costs.

The package does not include an earlier proposal to assist the uninsured with Medicaid coverage. It also does not include an increase in Supplemental Nutrition Assistance Program benefits.

The legislation does, however, include funding increases for a number of current programs that can help in the crisis, including for housing and homelessness programs and for child care.

Also Thursday, CMS said it has approved 12 section 1135 state Medicaid waivers.

Earlier this week:

CMS announced late Sunday it is granting exemptions from reporting requirements for the Quality Payment Program and giving doctors and other providers extensions for the data submission requirements for this program and others.

“In granting these exceptions and extensions, CMS is supporting clinicians fighting coronavirus on the front lines,” CMS Administrator Seema Verma, MPH, said in a statement. Notably, data submissions for the Merit-based Incentive Payment System originally due March 31, 2020, are now due April 30, 2020. Fourth-quarter data for several hospital-level programs is now optional, and if they are not submitted, 2019 performance will be assessed on the first 3 quarters of 2019, according to CMS.

Also, the FDA said late Sunday it would refrain from enforcing action against sponsors or others for COVID-19 accommodations made regarding laboratory testing or imaging study requirements normally needed for certain risk evaluation and mitigation strategies (REMS) requirements.

"For drugs subject to these REMS with laboratory testing or imaging requirements, health care providers prescribing and/or dispensing these drugs should consider whether there are compelling reasons not to complete these tests or studies during the [public health emergency], and use their best medical judgment in weighing the benefits and risks of continuing treatment in the absence of laboratory testing and imaging studies," the FDA said its guidance. "Health care providers should also communicate with their patients regarding these judgments, including the risks associated with it."