Healthcare Litigation

Current economic conditions have put additional strain on organizations across the health care spectrum in unprecedented ways. However, along with new challenges, both market conditions and new guidance from the Internal Revenue Service (IRS) bring fresh opportunities for tax-exempt senior services and other elder care organizations to consider new efficiencies, maximize revenues, and even expand operations. In particular, organizations in acquisitive periods and large health care systems looking to expand their spectrum of elder care services may find significant opportunities in the current market. Evaluating related versus unrelated revenue streams and associated expenses. Under Sections 511 through 514 of the Internal Revenue Code of 1986, as amended (IRC), tax-exempt organizations are required to pay unrelated business income tax (UBIT) on income from activities that are unrelated to their charitable, educational, scientific, religious or other exempt (or “related”) purposes. The unrelated business income (UBI) rules are complex, and such complexity can deter tax-exempt organizations from taking a comprehensive analysis relating to revenue sources and expense allocations for UBI calculation purposes. Changes to methodology for categorizing related versus unrelated revenue and expenses have implications across an organization’s financial reporting, to include tax returns and other compliance filings in both future and prior years. In May 2020, the IRS issued proposed regulations to give guidance for tax-exempt organizations calculating UBTI on separate unrelated trades or businesses (commonly referred to “siloing” such revenue and expenses) under IRC Section 512(a)(6), which was added by the 2017 Tax Cuts and Jobs Act (TCJA). The proposed regulations provide organizations guidance on how to identify and calculate UBTI from separate trades or businesses for purposes of IRC Section 512(a)(6), which generally requires organizations operating more than one unrelated trade or business to compute UBTI separately for each siloed trade or business. Once the businesses are broken into separate silos, an organization must determine how to allocate expenses that may apply to more than one activity to each silo. The preamble to the Section 512(a)(6) proposed regulations indicates that the IRS intends to publish a separate notice of proposed rulemaking to provide further guidance on expense allocation in calculating UBTI. In the interim, tax-exempt organizations may allocate such expenses using any reasonable method. Shifting models of care and new payment models across the health care spectrum provide not only cost efficiencies but also opportunities to analyze whether a tax-exempt organization’s activities (and associated revenues and expenses) are actually patient revenue related to such organization’s exempt purposes. And, if any activities are deemed unrelated to a tax-exempt organization’s exempt purposes, the new Section 512(a)(6) guidance provides a new benchmark to analyze such revenues and make good faith determinations relating to expense allocations. Acquiring assets out of bankruptcy proceedings. Economic downturns are painful, but for organizations with an acquisitive mindset, such market events can provide opportunities to expand existing and add activities through purchasing assets or businesses out of bankruptcy proceedings. If a tax-exempt organization is merely purchasing assets out of bankruptcy, the tax status of the former owner is typically not relevant. However, if the tax-exempt organization is purchasing the shares or equivalent ownership units of a taxable entity, it may still be a good fit for the acquiring tax-exempt organization but such transactions will require proper planning to protect the acquirer’s tax-exempt status.                                                                                                                                                                                 _____________________________________   Acquiring for-profit entities or operations. Whether acquired through bankruptcy proceedings or by a straight equity purchase, acquiring existing operations or ownership of a for-profit organization may present beneficial opportunities to tax-exempt organizations to enhance or expand their elder care service spectrum. While many senior housing organizations operate as for-profit enterprises, converting to a tax-exempt organization as a stand-alone organization or by acquisition by a tax-exempt organization may be a win-win for both organizations with proper planning. Additional considerations include the applicability of IRC Section 337(d), which requires certain corporations that transfer all or substantially all of their assets to a tax-exempt entity or convert from a taxable corporation to an exempt entity to recognize gain or loss as if it had sold the assets at fair market value. Also, the IRS has recently stated that organizations formerly operated as for-profit entities prior to their conversion to Section 501(c)(3) entities are one of the issues included on the annual compliance strategy list, and therefore may have a higher chance of future examination. However, if the converted organization files a new application for tax-exempt status by filing a Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, that is approved by the IRS the examination would seem fairly straightforward so long as the Form 1023 is an accurate representation of the entity’s activities. Despite the additional due diligence and planning required, the last several years have shown several high-profile mergers and acquisitions of both tax-exempt and taxable skilled nursing facilities by tax-exempt organizations. Tax-exempt organizations, especially those looking to expand operations geographically or to encompass a more comprehensive spectrum of care should not discount opportunities to acquire an existing enterprise based solely on its taxable status. If you want to review your organization’s current senior services activities and/or evaluate expansion of elder care, please contact the authors or your regular Dorsey attorney.

The Dorsey Health Law blog team keeps readers up-to-date on relevant topics in the health care industry. In order to do so, the members of the blog team communicate regularly with other practice groups within the firm for applicable updates from client publications. For this post, we would like to thank Dorsey's Robert Webber, Ieva Aubin, Penni Frank, and Erin Bukacek for the following e-update: The U.S. Department of Health and Human Services (HHS) has made a significant change regarding eligibility for clinical J-1 waivers for foreign educated physicians who have completed graduate medical programs or training in the United States. This development changes the landscape for J-1 visa waiver availability nation-wide...[Continue Reading]    

The Dorsey Health Law blog team keeps readers up-to-date on relevant topics in the health care industry. In order to do so, the members of the blog team communicate regularly with other practice groups within the firm for applicable updates from client publications. For this post, we would like to thank Andrew Brantingham, Ross C. D'Emanuele, and Alex Hontos for the following post from Dorsey's FCA Now blog: The CARES Act allocated $100 billion in relief funds to hospitals and other healthcare providers, to be distributed by the Department of Health and Human Services (“HHS”) through the Public Health and Social Services Emergency Relief Fund (or “Provider Relief Fund”). Many healthcare providers across the country have received payments from the Fund...[Continue Reading]

As we described in our prior blog post, on March 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) published multiple COVID-19 Blanket Waivers for Health Care Providers. CMS announced another round of Blanket Waivers on April 30, which are available here. These waivers provide additional flexibility to health care providers responding to the COVID-19 pandemic by expanding access to telehealth services and giving providers and facilities relief from many reporting and audit requirements so they can focus on patient care. The following is a summary of the new Blanket Waivers available to providers. These Blanket Waivers are retroactively effective back to March 1, 2020 and will continue through the end of the emergency declaration. Flexibility for Medicare Telehealth Services Eligible Practitioners CMS is expanding the types of health care practitioners who may be reimbursed for providing Medicare telehealth services to all practitioners who are eligible to bill Medicare for non-telehealth services. Thus, physical therapists, occupational therapists, speech language pathologists, and others may now furnish and receive reimbursement for Medicare telehealth services. Audio-Only Telehealth for Certain Services CMS is now permitting more services to be provided by audio-only technology. Several evaluation and management services, behavioral health counseling, and educational services no longer require a two-way, real-time interactive communication between the patient and practitioner. For a list of billing codes for these audio-only services, please review the CMS list of Medicare telehealth services, available here. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) Certain Staffing Requirements In an effort to address potential staffing shortages, CMS is waiving the requirement that certain practitioners (NP, PA, or certified nurse-midwife) be available to furnish patient care services at least 50 percent of the time a Rural Health Clinic operates. However, a physician, nurse practitioner, physician assistant, certified nurse-midwife, clinical social worker, or clinical psychologist must still be available to furnish patient care services at all times the Rural Health Clinic operates. Long-Term Care Facilities and Skilled Nursing Facilities (SNFs) and/or Nursing Facilities (NFs) Quality Assurance and Performance Improvement (QAPI) CMS is modifying QAPI program requirements to the extent necessary to narrow the scope of the QAPI program to focus on adverse events and infection control. This will help ensure facilities focus on aspects of care delivery most closely associated with COVID-19 during the PHE. In-Service Training Nursing assistants will now have more time to complete their required 12 hours of in-service training. CMS has extended the deadline for completing this training until the end of the first full quarter after the declaration of the PHE concludes. Detailed Information Sharing for Discharge Planning for Long-Term Care (LTC) Facilities In order to help long-term care facilities expedite the discharge and movement of residents among care settings, CMS is waiving the discharge planning requirement that facilities must assist residents and their representatives in selecting a post-acute care provider using data such as standardized patient assessment data, quality measures, and resource use. All other discharge planning requirements remain in place. Clinical Records Long-term care facilities may now take ten working days to provide a resident a copy of their records after requested. Previously, facilities were required to provide a copy within two working ways when requested by the resident. Home Health Agencies (HHAs) Training Requirement for Home Health Aides Medicare conditions of participation for HHAs state that each Home Health Aide must receive 12 hours of in-service training every 12 months. To give both aides and the nurses that provide the training more time to perform patient care, this training requirement is postponed, and the new deadline for aide in-service training is the end of the first full quarter after the declaration of the PHE concludes. Detailed Information for Discharge Planning The requirement to provide patients with detailed information regarding discharge planning in selecting a post-acute care provider (such as quality and resource use measures of potential providers) is temporarily waived during the PHE. All other discharge planning requirements remain applicable. Clinical Records HHAs may take ten business days to provide a patient with copies of their medical records, instead of four business days. Hospice Training Requirement for Home Health Aides Hospice conditions of participation requiring the annual assessment and in-service training and education of all individuals furnishing care is postponed until the end of the first full quarter after the declaration of the PHE concludes. HHAs and Hospice Onsite Supervisory Visits For both HHAs and Hospices, the condition of Medicare participation that requires a registered nurse (or for HHA any other appropriate skilled professional) to make an annual onsite supervisory visit for each aide is postponed. Postponed onsite assessments must be completed no later than 60 days after the expiration of the PHE. Quality Assurance and Performance Improvement (QAPI) To allow HHAs and Hospices to focus on COVID-19 effort, the requirement that HHAs and Hospices maintain an effective, ongoing, data-driven QAPI program is modified to narrow the scope of the mandated QAPI program to infection control issues. Remaining QAPI activities should focus on adverse events. Ambulatory Surgical Centers (ASCs) Medical Staff During the PHE, CMS is waiving the ASC conditions of coverage requiring ASCs to periodically reappraise medical staff privileges. This will allow physicians whose privileges will expire to continue practicing at the ASC without the need for reappraisal. Community Mental Health Centers (CMHCs) Quality Assurance and Performance Improvement (QAPI) While maintaining the general requirement that CMHCs maintain an effective, ongoing, data-driven QAPI program, CMS is waiving the specific detailed requirements for QAPI program organization and content to provide flexibility for CMHCs to focus QAPI resources on circumstances that arise during the PHE. CMHC modifications to QAPI programs must be consistent with a state’s emergency preparedness or pandemic plan. Home Services CMS is waiving the prohibition on CMHCs providing partial hospitalization services and other CMHC services in an individual’s home. This will allow clients to safely shelter in place during the PHE while receiving needed care and services from the CMHC. CMHCs must still assess client needs, implement and update each client’s individualized active treatment plan, and promote client rights, including a client’s right to file a complaint. 40% Rule To promote access to services, the requirement that CMHCs provide at least 40% of their items and services to individuals who are ineligible for Medicare benefits is waived. Physical Environment for Multiple Providers/Suppliers Inspection, Testing & Maintenance (ITM) under the Physical Environment Conditions of Participation: CMS is waiving the following physical environment requirements for Hospitals, CAHs, inpatient hospices, ICF/IIDs, and SNFs/NFs to reduce disruption of patient care and potential exposure/transmission of COVID-19. Requirements to maintain facilities and equipment to ensure an acceptable level of safety and quality are temporarily modified as necessary to permit these facilities to adjust scheduled inspection, testing and maintenance (ITM) frequencies and activities for facility and medical equipment. These facilities may adjust scheduled ITM frequencies and activities required by the applicable Life Safety Codes and Health Care Facilities Codes. The following are not included in this waiver:  Sprinkler system monthly electric motor-driven and weekly diesel engine-driven fire pump testing. Portable fire extinguisher monthly inspection. Elevators with firefighters’ emergency operations monthly testing. Emergency generator 30 continuous minute monthly testing and associated transfer switch monthly testing. Means of egress daily inspection in areas that have undergone construction, repair, alterations or additions to ensure its ability to be used instantly in case of emergency. Requirements to have an outside window or outside door in every sleeping room are waived to permit these providers to utilize space not normally used for patient care for temporary care or quarantine. If you have any questions about the CMS Blanket Waivers, please contact the authors or your regular Dorsey & Whitney attorney. We continue to closely monitor the rapidly evolving legal landscape related to the COVID-19 pandemic. You can access Dorsey’s health law blog related to health law updates, available here. You can also access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here.

On March 9, 2020, the Centers for Medicare and Medicaid Services (“CMS”) issued a memorandum describing hospitals’ continuing obligations with respect to the Emergency Medical Treatment and Labor Act (“EMTALA”) during the COVID-19 public health emergency (“PHE”). Check out our previous blog post on this topic here. Last week, in response to a growing number of questions from hospitals and critical access hospitals (“CAHs”), CMS released additional guidance in the form of frequently asked questions (“FAQs”) concerning the implications of COVID-19 on EMTALA compliance. The FAQs address questions CMS has received on a variety of topics, including patient presentation to the emergency department (“ED”), the applicability of EMTALA in different facilities, determining who is a qualified medical professional, as well as information on medical screening exams, patient stabilization, transfers, and other EMTALA-related topics. Below, we set forth a sampling of some of those questions and answers. A full list of the FAQs, covering all of the EMTALA topics CMS addressed in its FAQs, including topics not covered in this blog, can be found here. Patients Presenting to the Emergency Department Q. May hospitals place a sign outside an ED stating “COVID-19 testing is not being offered to asymptomatic patients”? A. Yes. In general, signage may be used to inform individuals about the availability of COVID-19 testing or to provide direction to alternative sites on the hospital’s campus where medical screening examinations (“MSE”) are available; for example, directing the patient to a parking lot test site for COVID-19. CMS emphasized, however, that it is a violation of EMTALA for hospitals to use signage that presents a barrier to individuals, including potential COVID-19 patients, from coming to the ED or for hospitals to otherwise refuse to provide a MSE to anyone who comes to the ED for examination or treatment. Hospitals may encourage the public to go to off-campus sites to be screened for COVID-19 instead of to the hospital. Normally, a hospital may not tell individuals who have already entered an ED to go to the off-site location for the MSE—such a redirection usually may only be to an on-campus alternative site. However, CMS has approved via a section 1135 waiver for the COVID-19 public health emergency (“PHE”) the ability to re-direct patients to an offsite location for screening, in accordance with a state emergency preparedness or pandemic plan. Q. Is a hospital’s ability to refer an individual to an alternative off-campus screening site limited strictly to those individuals with COVID-19 symptoms? A. No. CMS clarified that any patients may be redirected to an off-campus screening location to receive an MSE under the section 1135 waivers regardless of the presence of COVID-19 symptoms. For example, ambulance patients may be referred off-campus (i.e., without any off-loading or any evaluation before the referral). Public health officials, emergency medical services (“EMS”) systems, and hospitals may develop protocols, including COVID-19 protocols, governing where EMS should transport individuals for emergency care. As a reminder, for a hospital owned-and-operated ambulance operating in accordance with community-wide EMS protocols that directs the transport of individuals to a hospital other than the hospital that owns the ambulance (for example, to the closest appropriate hospital), the presenting individual is considered to have come to the ED of the hospital to which the individual is transported. The receiving hospital is subject to EMTALA at the time the individual is brought onto hospital property. Where Does EMTALA Apply? Q. Can EMTALA be relaxed to allow hospitals to refer patients to urgent care facilities? A. Hospitals may encourage the public to go to off-campus sites for COVID-19 screening instead of the hospital so long as those sites are operating in accordance with the state or local pandemic plan, are identified specifically by the hospital as the place to receive an MSE, and have the capability to provide that MSE. Additionally, CMS has approved a section 1135 waiver for the duration of the public health emergency granting hospitals the ability to re-direct patients to an off-site location. Q. What is the definition of “on campus”? A. The definition of campus can be found at 42 C.F.R. § 413.65(a)(2) and means the physical area immediately adjacent to the provider’s main buildings, other areas and structures that are not strictly contiguous to the main buildings but are located within 250 yards of the main buildings and any other areas determined on a case-by-case basis. Per 42 C.F.R. § 489.24(b), “Hospital property” means the entire main hospital campus, including the parking lot, sidewalk, and driveway, but excluding other areas or structures of the hospital’s main building that are not part of the hospital, such as physician offices, rural health centers, skilled nursing facilities, or other entities that participate separately under Medicare, or restaurants, shops, or other nonmedical facilities. During the COVID-19 PHE, non-hospital properties, such as hotels, dormitories, and field hospitals at places like parks, are becoming extensions of hospitals, otherwise known as temporary expansion sites. This is permissible under the section 1135 waiver of the provider-based regulations at 42 C.F.R. § 413.65 and certain requirements under the Medicare conditions of participation at 42 C.F.R. § 482.41 and § 485.623. For the duration of the COVID-19 PHE, these waivers allow a hospital to establish and operate as part of the hospital any location meeting the Conditions of Participation (CoPs) for hospitals that continue to apply during the PHE. These waivers also allow a hospital to change the status of its current provider-based department locations to the extent necessary to address the needs of hospital patients as part of the state or local pandemic plan. As such, it is acceptable to triage and treat patients in these temporary expansion sites. Q: Can multiple hospitals with different Medicare provider numbers join together to establish the off-site location in accordance with the state emergency plan? If so, what EMTALA implications would result for each hospital involved? A: Yes. Temporary expansion sites may serve multiple hospitals if it is consistent with their state emergency plan. Unless the off-campus site is already a dedicated emergency department (“DED”) of a hospital, as defined under EMTALA regulations at 42 C.F.R. § 489.24(b), EMTALA requirements do not apply. If an individual being treated at a temporary expansion site needs additional medical attention on an emergent basis, the site is required, under the Medicare CoPs, to arrange referral/transfer. When multiple hospitals join to establish an off-site location, the hospitals should operate in distinct clinical spaces within the location or designate one facility that will assume responsibility for ensuring compliance with the CoPs including EMTALA requirements (if applicable). If the space is shared across multiple hospitals, CMS notes that noncompliance problems at a temporary expansion sites may implicate associated certified hospitals depending upon the type of noncompliance. Q: How does EMTALA apply if a community has exhausted its supply of beds and/or ventilators and a patient presents with an emergent condition that needs these resources for stabilization? A: Hospitals are required to provide stabilizing treatment to individuals determined to have an emergency medical condition within the hospital’s capability prior to arranging an appropriate transfer. In situations where facilities may not have the necessary services or equipment, they should provide stabilizing interventions within their capability until the individual can be transferred. For example, in cases where the hospital does not have available ventilators, establishing an advanced airway and providing manual ventilation can assist in stabilizing the individual until an appropriate transfer can be arranged. Q: If a hospital sets up an alternative off-campus testing site, is that site regulated by the hospital conditions of participation? A: Yes. Alternative care sites and temporary extension sites that are established by the hospital are still required to follow the applicable hospital CoPs to the extent not waived under the blanket waivers issued by CMS. Community testing centers established by the state would be under the state emergency and pandemic plan and are not required to meet the hospital CoPs. Qualified Medical Professionals (QMPs) Q: Has CMS removed the requirement to have a QMP, approved by the governing body, perform the MSE? A: No. QMPs responsible for performing MSEs must still be approved by the hospital’s governing body. Hospitals may request a case-by-case section 1135 waiver to allow MSEs to be performed by qualified medical staff authorized by the hospital, who are acting within their scope of practice and licensure, but are not designated in the hospital bylaws to perform the MSEs. Medical Screening Exams CMS has received a number of questions from providers regarding how MSEs may be performed in light of the COVID-19 pandemic. Q: Can emergency physicians and other health care practitioners conduct medical screening exams (MSEs) under EMTALA via telehealth? A: Yes. QMPs, including emergency physicians, can perform MSEs using telehealth equipment. The QMP may be on-campus and using technology to self-contain or offsite due to staffing shortages. The MSE may be performed solely via telehealth if clinically appropriate. If the patient is seen by a QMP located on campus via electronic two-way technology, the service would not be considered a telehealth visit. Regardless of location, the QMP must be performing within the scope of his/her state practice act and approved by the hospital’s governing body to perform MSEs. Q: Can CMS waive certain elements of EMTALA to allow for more flexibility in meeting the current medical screening exam (MSE)? A: CMS has temporarily waived some EMTALA requirements to allow screening for patients at a location offsite from the hospital’s campus to prevent the spread of COVID-19, so long as it is not inconsistent with a state’s emergency preparedness or pandemic plan. Under the waiver, hospital EDs may redirect incoming patients to alternative screening sites staffed by QMPs, to ensure symptomatic or COVID-19-positive patients are directed to appropriate settings of care. Q: Can emergency physicians perform medical screening exams outside of the ED, such as in tents in the parking lot, under EMTALA? A: Yes. A hospital may set up alternative sites on its campus to perform MSEs. Individuals may be redirected to these sites. Whether the individual is seen at the alternate on-campus site or in the ED, they should be logged in where they are seen. Individuals do not need to present to the ED, first, and if they do present to the ED, they may still be redirected to the on-campus alternative screening location for logging and subsequent screening. This is a triage function, and the person providing the redirection from the ED should be qualified to recognize individuals who are obviously in need of immediate treatment in the ED. Hospital non-clinical staff stationed at other entrances to the hospital may provide redirection to the on-campus alternative screening location for individuals seeking COVID-19 testing. Q: Can the MSE be conducted by a Registered Nurse (RN)? A: Yes. MSEs must be conducted by qualified personnel, which may include physicians, nurse practitioners, physician’s assistants, or RNs trained to perform MSEs, acting within the scope of their state licensure law, and as approved by the hospital’s governing body. Hospitals may request a waiver to allow MSEs to be performed by other personnel, including trained RNs not previously approved by the governing body to perform MSEs. Q: If there is an on-site COVID-19 testing location (e.g., tent outside main ED), would EMTALA apply if individuals are only requesting COVID-19 testing? Would a MSE be required? A: EMTALA would apply if a patient who was solely seeking COVID-19 testing made a request for medical treatment while on the hospital campus or demonstrated a medical condition that a prudent layperson would believe, based on the individual’s appearance or behavior, indicated that the individual needed examination or treatment of a medical condition. However, patients who present solely for the purpose of COVID-19 testing and are not making a request for treatment of a medical condition, do not necessarily require a MSE. If the person complains of or exhibits any symptoms of a medical condition, then that person should receive an appropriate MSE to determine whether an emergency medical condition (“EMC”) exists. The EMTALA obligation is satisfied if the MSE determines no EMC exists. Q: Can a hospital conduct an MSE if the patient remains in an automobile and meet its EMTALA obligations? A: It depends. The MSE does not have to take place in the ED to satisfy EMTALA. The content of the MSE varies according to the individual’s presenting signs and symptoms, and it can be as simple or as complex, as needed, to determine if an emergency medical condition exists. MSEs must be conducted by qualified personnel, which may include physicians, nurse practitioners, physician’s assistants, or RNs trained to perform MSEs and acting within the scope of their state practice act. If a clinically-appropriate MSE can be performed in an automobile to determine whether or not an emergency medical condition exists, that MSE would be permissible under EMTALA. Q: For off-campus, hospital-controlled sites, can a person first presenting to the ED be redirected from the ED to the off-campus site where the MSE will be completed? A: Yes. Hospitals may redirect patients presenting to the ED to an off-campus site where an MSE will be completed. Normally, a hospital may not tell individuals who have already entered an ED to go to the off-site location for the MSE, such a redirection usually only occurs to an on-campus alternative site. However, CMS has issued a blanket section 1135 waiver for the duration of the COVID-19 PHE the ability to re-direct patients to an offsite location for screening, in accordance with a state emergency preparedness or pandemic plan. Hospitals are generally able to manage the separation and flow of potentially infectious patients through alternate screening locations on the hospital campus during the COVID-19 PHE. Q: Is there a specific time frame in which the MSE has to take place if a patient is referred to an off-campus site? Would it have to happen that same day? A: There is no specified time frame in which the MSE has to occur after the referral from the hospital to an off-campus site. However, triage entails the clinical assessment of the individual’s presenting signs and symptoms at the time of arrival at the hospital, in order to prioritize when the individual will be seen by a physician or other QMP. Individuals presenting must be provided an MSE appropriate to the individuals’ presenting signs and symptoms, as well as the capability and capacity of the hospital. The MSE must be the same MSE that the hospital would perform on any individual coming to the hospital’s dedicated emergency department with those signs and symptoms, regardless of the individual’s ability to pay for medical care. If a hospital applies a nondiscriminatory screening process that is reasonably calculated to determine whether an EMC exists, it has met its obligations under EMTALA. The required MSE and stabilizing treatment should not be delayed. If the MSE is appropriate and does not reveal an EMC, the hospital has no further obligation. Q: If a hospital set up a COVID-19 testing location offsite, and patients only present to the hospital for testing without requesting additional services, do those patients need an MSE before we refer them offsite? A: Those patients would not be subject to an MSE in this case unless they are requesting examination or treatment for a medical condition or demonstrate a medical condition for which a MSE is necessary. EMTALA requires that all persons who present to the hospital or ED for a medical condition be provided an MSE to determine whether they have an EMC. Transfer and Stabilization of Patients Q: Has CMS waived elements of EMTALA to allow for more flexibility in the transfer and stabilization requirements? A: No. CMS has not waived EMTALA transfer or stabilization requirements. Hospitals are expected to provide stabilizing treatment within their capabilities and capacity prior to the initiation of a transfer to another hospital. However, when a section 1135 waiver has been issued, sanctions for an inappropriate transfer of a patient or for the direction or relocation of a patient to receive a MSE at an alternate location do not apply if certain conditions are met, as enumerated at 42 C.F.R. §489.24(a)(2)(i)(A)-(E). Q: Is transfer to a designated facility permissible regardless of COVID-19 status, as long as positives go to designated positive facilities and negatives go to designated negative facilities? A: Yes. A patient transfer under the state emergency and pandemic plan would apply to all patients regardless of COVID-19 status following an appropriate MSE and determination that patient is stable for an appropriate transfer. Q: When could a hospital refer a patient who comes to the ED for medical treatment to an urgent care center? A: Hospitals must provide a MSE to all patients who come to the ED requesting treatment for a medical condition or where the individual is demonstrating presence of a medical condition to determine if an EMC exists. The content of the MSE varies according to the individual’s presenting signs and symptoms, but should be provided within the capabilities of the hospital’s ED, including ancillary services routinely available to the hospital. Once the MSE is complete and if the patient is determined not to have an EMC, the hospital’s EMTALA obligation ends and the patient may be referred to an urgent care center for continued care of non-emergency illnesses or injuries. However, a section 1135 waiver gives the ability for hospitals to re-direct patients that have presented to the ED to an offsite location for the MSE in accordance with a state emergency preparedness or pandemic plan. Under the section 1135 waiver, hospital EDs may redirect incoming patients to alternative screening sites staffed by qualified medical personnel, to ensure that symptomatic or COVID-19-positive patients are directed to appropriate settings of care. Waivers Under Section 1135 of the Social Security Act Q: Has EMTALA been broadly waived? A: No. CMS has approved a section 1135 waiver for the COVID-19 PHE, which temporarily includes the ability to re-direct patients to an offsite location for screening in accordance with a state emergency preparedness or pandemic plan. Hospitals are still expected to provide an MSE to any individual who comes to the emergency department and requests examination or treatment, or has a request for examination or treatment made on their behalf. The purpose of the MSE is to determine if an emergency medical condition exists. If an EMC is determined to exist, the hospital must provide stabilizing treatment within the hospital capabilities or an appropriate transfer per 42 C.F.R. § 489.24. While certain aspects of EMTALA may be waived under the section 1135 waiver, federal civil rights laws have not been waived. Hospitals that receive federal financial assistance are still obligated to comply with federal civil rights laws, including Section 504 of the Rehabilitation Act, Title VI of the Civil Rights Act of 1964, Section 1557 of the Affordable Care Act and the Hill-Burton Act. Hospitals do not have to initiate a disaster plan before the section 1135 waiver becomes effective and hospitals are not required to provide notification to CMS upon initiation of the disaster plan. The flexibilities and blanket waivers released by CMS are retroactive to March 1, 2020. The waivers will end no later than the termination of the COVID-19 PHE, or 60 days from the date the waiver or modification is first published, unless the Secretary of HHS extends the waiver by notice for additional periods of up to 60 days, up to the end of the emergency period. Any additional formal guidance, revisions to existing guidance, or additional clarifications will be released via a QSO memorandum or other CMS approved communication. We at Dorsey are continuing to monitor the developments related to COVID-19. If you have any questions about the issues addressed in this blog, please contact the authors or your regular Dorsey attorney. You can access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here. You can also access Dorsey’s health law blog related to health law updates, available here.

ERISA litigators know that a war has been raging between “out-of-network” medical providers, on one hand, and the entities that insure and administer group health plans, on the other (collectively, “Insurers”). For years, out-of-network providers have been suing plans and Insurers claiming they were “underpaid” for their medical services, often to the tune of millions of dollars. Hundreds of these cases have cropped up around the country in recent years. COVID-19 has now opened up a new front in this war, and the first skirmishes have already started. On April 10, 2020, Columbus Specialty Hospital (“Columbus”) filed a complaint in New Jersey state court seeking $36 million from various New Jersey insurance companies (the “Defendant-Insurers”) for payment of treatment it provided during the “COVID-19 crisis.” See Columbus Specialty Hosp. v. Amerigroup Corp., et al., No. ESX-L-002635-20 (N.J. Sup. Ct. April 10, 2020). According to Columbus, it provides “long term acute care” to “immunocompromised seniors”—the “prime targets for COVID-19 infection.” Columbus claims the Defendant-Insurers grossly underpaid it “for the live-saving treatment” it provided to those “vulnerable patients.” Columbus’s lawsuit is similar in some ways to the out-of-network provider cases that have cropped up around the country—but it adds a few new twists. The Common Elements Columbus’s lawsuit shares common features with the out-of-network provider lawsuits that came before it. Like the providers in those cases, Columbus does not directly sue for benefits under the terms of the health plans at issue. Instead, it asserts various contractual and quasi-contractual claims, alleging (among other things) that the Defendant-Insurers promised to pay Columbus its “usual and customary rates” for the services in question. This is a common tactic by out-of-network providers because their “usual” rates are much higher than the rates called for in the plan documents. In another relatively common move, Columbus asserts claims under state “prompt pay” statutes, which regulate the length of time in which an Insurer must pay providers for submitted claims. The New Elements While Columbus’s lawsuit shares a common structure with other out-of-network provider cases, it introduces new elements and could set new trends in this area of litigation. First, Columbus tries to bolster its claims by highlighting the emotional aspects of the “national and state emergency” related to COVID-19. According to Columbus, the Defendant-Insurers’ failure to pay does not simply affect its bottom line; it means members of the “greatest generation” are not receiving “the live-saving care” they deserve. Columbus also accuses the Defendant-Insurers of putting health care workers at risk by preventing Columbus from purchasing personal protection equipment. By tying its claims to the COVID-19 crisis, Columbus is hoping to tilt the scales of equities in its favor—a potentially effective move, especially for claims tried before a jury. Expect other medical providers to follow suit and tie their claims to the COVID-19 crisis. Second, Columbus’s lawsuit indicates that out-of-network providers may be shifting tactics for how they attempt to bind Insurers to “contractual” promises to pay the providers’ rates. As mentioned above, these out-of-network provider lawsuits often turn on whether the Insurer and provider formed a “contract” through communications about reimbursement rates. Traditionally, providers have alleged that such a contract or promise arose from phone calls with an Insurer’s billing department, during which the Insurer allegedly confirmed a patient’s coverage and reimbursement rates. Here, by contrast, Columbus claims it actually faxed formal contracts to the Defendant-Insurers, which they accepted by their conduct. This tactic is plainly an attempt to avoid the contractual formation and ERISA preemption defenses that defendants usually assert in these cases. Expect other out-of-network providers to employ similar tactics in their efforts to bind Insurers to commitments outside the four corners of the relevant health plan document. Third, Columbus’s lawsuit illustrates the astonishing size of provider bills for COVID-19 treatments and the limited time that Insurers have to process those claims. Columbus alleges, for example, that it billed $8.9 million for one patient for services related to COVID-19. While that sum is just an allegation, it is nonetheless a staggering number. And Columbus invokes New Jersey’s “prompt pay” statutes to insist that the Defendants-Insurers should have processed its multi-million dollar bills at breakneck speeds. This combination of large bills and pressure to pay those bills quickly puts enormous pressure on Insurers’ billing departments. This flurry of large bills also opens the door to fraud and abuse by unscrupulous providers. Insurers will have to find a way to manage this risk, while still ensuring that proper bills are paid in a timely fashion. But inevitably, Insurers will discover overpayment after the fact, which may trigger recoupment actions by Insures and the group health plans, which they administer. Should you seek additional information about these types of claims, feel free to contact us.

As we explained in our prior blog post, on March 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued certain blanket waivers of sanctions under the federal physician self-referral law (or “Stark Law”) for “COVID-19 Purposes” (the “Stark Blanket Waivers”), which are available here. On April 21, 2020, CMS issued explanatory guidance, available here, on the scope and application of the Stark Blanket Waivers to certain financial relationships (the “Explanatory Guidance”). In addition to answering a variety of questions raised by the initial announcement of the Stark Blanket Waivers, the Explanatory Guidance provides an important reassurance to stakeholders. CMS states: “The Secretary will work with the Department of Justice to address False Claims Act relator suits where parties using the blanket waivers have a good faith belief that their remuneration or referrals are covered by a blanket waiver.” Despite this reassurance, however, it is crucial that parties seeking to rely on a Stark Blanket Waiver ensure that their arrangement, in fact, relates to “COVID-19 Purposes” (as defined in the Stark Blanket Waivers document), falls within the parameters of a specifically enumerated waiver within the Stark Blanket Waivers document, and that all non-waived requirements of an applicable Stark Law exception are met. We also note that, as CMS reminds parties in the Explanatory Guidance, relying on a Stark Blanket Waiver may not be necessary for certain arrangements related to COVID-19 Purposes, if these arrangements satisfy the requirements of an existing Stark Law exception. The following information summarizes the Explanatory Guidance. A. Compliance with Non-Waived Requirements of an Applicable Exception Many of the Stark Blanket Waivers eliminate or alter some, but not all, of the existing requirements of particular Stark Law exceptions. CMS warns that financial relationships or referrals must satisfy all non-waived requirements of an applicable exception in order to avoid implicating the Stark Law’s referral and billing prohibitions. We note that this includes, for example, meeting the “set in advance” requirement of applicable compensation exceptions, as this requirement is not waived by any of the Stark Blanket Waivers. B. Amendment of Compensation Arrangements The Explanatory Guidance clarifies when parties may modify the remuneration terms of an existing arrangement during the COVID-19 emergency period, and whether such terms can be amended during the emergency period and again at the conclusion of the emergency period to return to the original terms. This guidance applies when parties are relying on a compensation exception that has both a one-year term requirement and a “set in advance” requirement (such as the personal services arrangements exception). CMS points to the preamble guidance in the Fiscal Year 2009 Inpatient Prospective Payment System final rule (“FY 2009 IPPS Rule”), which CMS interprets as allowing for a second or subsequent amendment of the compensation terms of an arrangement, even within the first year of an initial amendment of those terms, as long as each time those terms are amended, “all requirements of an applicable exception are satisfied, the amended remuneration is determined before the amendment is implemented, the formula for the amended remuneration does not take into account the volume or value [of] referrals or other business generated by the referring physician, and the overall arrangement remains in place for at least 1 year following the amendment.” CMS reiterates that if parties amend a compensation arrangement during the emergency period, all non-waived requirements of an applicable exception must be met. The compensation terms of the arrangement may again be amended after the public health emergency is over. This further amendment may restore the original terms of the arrangement or make additional changes, as long as each of the criteria from the FY 2009 IPPS Rule (described above) are met. Finally, CMS points out that a modification of an existing arrangement could instead be analyzed as an additional compensation arrangement, for which the parties could use the Stark Blanket Waivers (if all applicable requirements are met). C. Applicability of Blanket Waivers to Indirect Compensation Arrangements The Explanatory Guidance states that the Stark Blanket Waivers do not apply to indirect compensation arrangements, and only apply to direct compensation arrangements. Parties can, however, seek an individual waiver of sanctions related to indirect compensation arrangements. The Explanatory Guidance goes on to note that many compensation arrangements that may appear to be indirect may be analyzed as direct compensation arrangements under the “stand in the shoes” provisions of the Stark Law. D. Repayment Options for Loans between a DHS Entity and a Physician (or the Immediate Family Member of a Physician) Two Stark Blanket Waivers (waivers #10 and #11) involve remuneration in the form of a loan with an interest rate below fair market value or on terms that are unavailable from a lender that is not in a position to make referrals to or generate business for the party making the loan. CMS states that these waivers do not require cash payments to the lender to satisfy a borrower’s debt. Loans may be repaid through in-kind payments, as long as the aggregate value of the in-kind payments is consistent with the amount of the loan and the arrangement is commercially reasonable. CMS provides that an example in-kind payment could be the maintenance of a medical practice and continuing to serve patients in the community where the entity is located. E. Repayment of Loans, Rent Abatement, or Other Amounts Due Following the End of the Emergency Period CMS clarified that, if parties use the Stark Blanket Waivers such as the loan arrangements described above, repayment obligations do not need to be completed prior to the termination of the Stark Blanket Waivers (which will be at the end of the public health emergency that was declared related to the COVID-19 outbreak). Many parties expressed concern that, after the termination of the Stark Blanket Waivers, the compensation arrangements entered into would no longer satisfy the requirements of an applicable exception because the interest charges or other charged amounts would not be consistent with the fair market value of the remuneration provided. The Explanatory Guidance provides that appropriate repayment terms agreed to before the termination of the Stark Blanket Waivers may continue beyond the termination of the waivers. However, disbursement of loan proceeds or additional remuneration after the termination of the Stark Blanket Waivers must satisfy all requirements of the applicable Stark exception. F. Restructuring of Existing Recruitment Arrangements with Income Guarantees CMS also responded to inquiries about the extension or restructuring of existing physician recruitment arrangements, such as whether a hospital could extend an income guarantee to address a recruited physician’s medical practice interruption due to the COVID-19 pandemic. The Explanatory Guidance states that CMS maintains its position that, under the Stark Law exception for physician recruitment, the terms of a recruitment arrangement cannot be altered once the physician has relocated their practice. Some Stark Blanket Waivers, however, may be available for remuneration from a hospital (or other entity) to assist a relocated physician whose medical practice is disrupted due to the pandemic in order to maintain the availability of medical care and related services for patients and the community. * * * For help determining whether an existing or proposed arrangement complies with a Stark Blanket Waiver and/or for inquiries regarding individual waiver requests, please contact the authors of this post or your regular Dorsey attorney. We continue to closely monitor the legal landscape related to the COVID-19 pandemic. You can access Dorsey’s health law blog providing health law updates, available here. You can also access Dorsey’s coronavirus resource center, containing a wide variety of legal resources related to the coronavirus outbreak, available here.

On Friday, April 24, 2020, President Trump signed into law the “Paycheck Protection Program and Health Care Enhancement Act,” colloquially referred to as “Phase 3.5.” Phase 3.5 comes on the heels of three much larger bills passed into law intended to address the effects of the ongoing coronavirus pandemic. The first three phases, the Coronavirus Preparedness and Response Supplemental Appropriations Act, the Families First Coronavirus Response Act, and the CARES Act, provided much-needed funding to hospitals and health care providers affected by COVID-19. Phase 3.5 continues this funding by providing additional emergency appropriations totaling $484 billion, the majority of which ($384 billion) goes to replenishing the Paycheck Protection Program, Economic Injury Disaster Loans, and Emergency Grants funds as established in the CARES Act. Phase 3.5 allocates an additional $75 billion to the Public Health and Social Services Emergency Fund for providers to prevent, prepare for, and respond to coronavirus. The Phase 3.5 package also includes $25 billion for COVID-19 testing, $11 billion of which is earmarked for states to aid in their efforts to ramp up testing. A breakdown of the major funding provisions included in the Phase 3.5 bill is below. Paycheck Protection Program Phase 3.5 appropriates an additional $321 billion to replenish the funds for the Paycheck Protection Program (“PPP”). The PPP was originally funded by the CARES Act with $349 billion to protect small businesses and help them avoid layoffs and rehire employees. The loan amounts distributed under the PPP will be forgiven so long as the loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs, and employee and compensation levels are maintained. Phase 3.5 specifically sets aside $60 billion of these funds for small, midsize, and community lenders in an effort to avoid forcing smaller companies to compete with larger companies for the same funds. Economic Injury Disaster Loans Program Phase 3.5 appropriates $50 billion for Economic Injury Disaster Loans and an additional $10 billion for Emergency Injury Disaster Loan Grants. Public Health and Social Services Emergency Fund Phase 3.5 provides an additional $75 billion to the Public Health and Social Services Emergency Fund for hospitals and other health care providers to prevent, prepare for, and respond to coronavirus. This fund is managed by the Department of Health and Human Services. The CARES Act originally appropriated $100 billion to this fund, $30 billion of which was distributed beginning on April 10, 2020 with payments arriving in eligible health care providers’ bank accounts via direct deposit. On April 22, 2020, HHS unveiled the next phase of these distributions through a series of general and targeted distributions aimed in part at providing relief to those providers in areas highly impacted by COVID-19. Funds Allocated for Testing Phase 3.5 also provides $25 billion to the Public Health and Social Services Emergency Fund specifically for expenses surrounding the research, development, validation, manufacture, purchase, administration, and expanding of capacities for COVID-19 testing. A breakdown of the allocations for testing in Phase 3.5 is below: • $11 billion of these funds have been allocated to states to develop, purchase, administer, process, and analyze COVID-19 tests, including support for workforce, epidemiology, use by employers, scale up testing by public health and hospital laboratories, and community-based testing sites, health care facilities, and other entities engaged in testing. • $2 billion is to be provided to the states based on the Public Health Emergency Preparedness cooperative agreement in FY 2019; • $4.25 billion is to be allocated based on the number of COVID-19 cases; and • $750 million is to be provided to the Indian Health Service to aid tribes, tribal organizations, and Indian Health Service facilities. • $1 billion to the CDC for surveillance, epidemiology, laboratory capacity expansion, contact tracing, public health data surveillance and analytics infrastructure modernization, disseminating information about testing, and workforce support. • $1 billion to the NIH to develop, validate, improve, and implement testing and associated technologies and to accelerate research, development, and implementation of point of care and other rapid testing. • $1 billion to the Biomedical Advanced Research and Development Authority to cover research expenses. • $22 million to the FDA to support activities associated with diagnostic, serological, antigen, and other testing. • $600 million to HRSA for grants under the Health Centers program. • $225 million to rural health clinics to provide COVID-19 testing, with such funds also available to RHCs for building or construction of temporary structures, leasing of properties, and retrofitting facilities as necessary to support COVID-19 testing. • $1 billion for covering the costs of testing the uninsured. We are keeping a close eye on the rapid developments surrounding COVID-19. If you have any questions about this latest guidance issued by HHS, the CARES Act, or any questions related to COVID-19, please contact the author of this blog or contact your Dorsey and Whitney LLP attorney. You can access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here. You can also access Dorsey’s health law blog related to health law updates, including those applicable to tax exempt entities in the health care space, available here.

On April 22, 2020, the Department of Health and Human Services (“HHS”) issued a press release outlining the allocation of an additional $70 billion dollars in appropriations allocated by the CARES Act to the Public Health and Social Services Emergency Fund.  The initial $30B tranche of the total $100 billion provided for under the CARES Act was distributed earlier this month to providers based on a methodology taking into account those providers’ Medicare receipts from the prior year.  This is the “second round” of the initial funding provided for under the CARES Act and includes both a “General Allocation” of $50 billion and smaller “Targeted Allocations.”   In allocating the funds, HHS stated they are “working to address both the economic harm across the entire healthcare system due to the stoppage of elective procedures, and addressing the economic impact on providers incurring additional expenses caring for COVID-19 patients, and to do so as quickly and transparently as possible.” On April 21, 2020, the U.S. Senate passed a bill, colloquially referred to as “Stimulus Phase 3.5,” which provides for an additional $75 billion to replenish the Public Health and Social Services Emergency Fund.  These latest allocations are not related to the potential Stimulus 3.5 funds.  We are continuing to monitor Stimulus 3.5 funds and will update our website once that next round of stimulus funding is approved by the President.    The guidance provided by HHS with respect to the latest allocation of the additional $70 billion in appropriations for providers is below. I. GENERAL ALLOCATION $50 billion of the Provider Relief Fund is allocated for general distribution to Medicare facilities and providers impacted by COVID-19, based on eligible providers' 2018 net patient revenue.  To expedite providers getting money as quickly as possible, $30 billion was distributed immediately, proportionate to providers' share of Medicare fee-for- service reimbursements in 2019. On Friday, April 10, $26 billion was delivered to bank accounts. The remaining $4 billion of the expedited $30 billion distribution was sent on April 17. HHS said they used this formula to get the money out the door as quickly as possible.  HHS stated that, beginning this week, they will begin distribution of the remaining $20 billion of the general distribution to these providers to augment their allocation so that the whole $50 billion general distribution is allocated proportional to providers' share of 2018 net patient revenue. On April 24, a portion of providers will automatically be sent an advance payment based off the revenue data they submit in CMS cost reports. Providers without adequate cost report data on file will need to submit their revenue information to a portal opening this week at https://www.hhs.gov/providerrelief for additional general distribution funds.  Providers who receive their money automatically will still need to submit their revenue information so that it can be verified. Payments will go out weekly, on a rolling basis, as information is validated, with the first wave being delivered at the end of this week (April 24, 2020). Providers who receive funds from the general distribution have to sign an attestation confirming receipt of funds and agree to the terms and conditions of payment and confirm the CMS cost report. The terms and conditions also include other measures to help prevent fraud and misuse of the funds. All recipients will be required to submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to coronavirus. HHS warned that there will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General. In the latest allocation, HHS reinforced President Trump’s directive that as a condition to receiving these funds, providers must agree not to seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. II. TARGETED ALLOCATIONS A. ALLOCATION FOR COVID-19 HIGH IMPACT AREAS $10 billion will be allocated for a targeted distribution to hospitals in areas that have been particularly impacted by the COVID-19 outbreak. As an example, HHS said that hospitals serving COVID-19 patients in New York, which has a high percentage of total confirmed COVID-19 cases, are expected to receive a large share of the funds.  Hospitals should apply for a portion of the funds by providing four simple pieces of information via an authentication portal before midnight PT, Thursday April 23. This portal is live, and hospitals have already been contacted directly to provide this information. Hospitals will need to provide:  Tax Identification Number National Provider Identifier Total number of Intensive Care Unit beds as of April 10, 2020 Total number of admissions with a positive diagnosis for COVID-19 from January 1, 2020 to April 10, 2020 HHS stated that the authentication and data-sharing process should take less than five minutes via a system that should be familiar to most hospitals. HHS indicated this information is necessary for the government to determine what facilities will qualify for a targeted distribution. They added that supplying this information does not guarantee receipt of funds from this distribution. HHS will use the data it receives to distribute the targeted funds to where the impact from COVID-19 is greatest. The distribution will take into consideration the challenges faced by facilities serving a significantly disproportionate number of low-income patients, as reflected by their Medicare Disproportionate Share Hospital (DSH) Adjustment. B. ALLOCATION FOR TREATMENT OF THE UNINSURED As announced in early April, a portion of the $100 billion Provider Relief Fund will be used to reimburse healthcare providers, at Medicare rates, for COVID-related treatment of the uninsured. Every health care provider who has provided treatment for uninsured COVID-19 patients on or after February 4, 2020, can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding. Steps will involve: enrolling as a provider participant, checking patient eligibility and benefits, submitting patient information, submitting claims, and receiving payment via direct deposit. Providers can register for the program on April 27, 2020, and begin submitting claims in early May 2020. For more information, visit coviduninsuredclaim.hrsa.gov. C. ALLOCATION FOR RURAL PROVIDERS $10 billion will be allocated for rural health clinics and hospitals.  This money will be distributed as early as next week (April 27, 2020) on the basis of operating expenses, using a methodology that distributes payments proportionately to each facility and clinic. This method recognizes the precarious financial position of many rural hospitals, a significant number of which are unprofitable. Rural hospitals are more financially exposed to significant declines in revenue or increases in expenses related to COVID-19 than their urban counterparts. D. ALLOCATION FOR INDIAN HEALTH SERVICE Included in the allocation is $400 million which will be allocated for Indian Health Service (“IHS”) facilities, distributed on the basis of operating expenses. Indian Country is also being impacted by COVID-19.  This money will be distributed as early as next week (April 27, 2020) on the basis of operating expenses for facilities. HHS indicated that this serves as a complement for “other funding provided to IHS and work we've done to expand IHS capacity for telehealth.” E. ADDITIONAL ALLOCATIONS HHS indicated that there are some providers who will receive further, separate funding, including skilled nursing facilities, dentists, and providers that solely take Medicaid. F. HELPING ENSURE ALL AMERICANS HAVE ACCESS TO CARE The Families First Coronavirus Response Act, as amended by the CARES Act, requires private insurers to waive an insurance plan member's cost-sharing payments for COVID-19 testing. The President also secured funding to cover COVID-19 testing for uninsured Americans. The Trump Administration has also touted secured commitments from private insurers, including Humana, Cigna, UnitedHealth Group, and the Blue Cross Blue Shield system, to waive cost-sharing payments for treatment related to COVID-19 for plan members. As a condition to receiving general funds, providers must agree not to seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. We are keeping a close eye on the rapid developments surrounding COVID-19.  If you have any questions about this latest guidance issued by HHS, the CARES Act, or any questions related to COVID-19, please contact the authors of this blog or contact your Dorsey and Whitney LLP attorney. You can access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here. You can also access Dorsey’s health law blog related to health law updates, including those applicable to tax exempt entities in the health care space, available here. 

The recently-enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) is generally known for providing relief funds and other resources to help individuals, small businesses, state and local governments, and hospitals and healthcare providers address the COVID-19 public health emergency.  However, among the lesser-known of the CARES Act provisions are changes to federal law that will allow a significant harmonization of rules governing the confidentiality of substance use disorder patient records with the general federal rules governing the privacy of individually identifiable health information (i.e., the HIPAA privacy rules). Currently, a unique set of federal regulations found at 42 C.F.R. Part 2 restrict the disclosure and use of substance use disorder patient records that are maintained in connection with any federally-assisted substance use disorder program.  These “Part 2” rules are far stricter than the federal HIPAA privacy rules that apply generally to health plans and health care providers.  For example, whereas the HIPAA privacy rules allow health plans and health care providers to use and disclose protected health information (“PHI”) for purposes of treatment, payment, and health care operations without a patient’s written or oral consent, the Part 2 rules do not.  Another important distinction between the Part 2 rules and HIPAA is that if a patient authorizes the disclosure of PHI under HIPAA to an entity that is not regulated by HIPAA, then the PHI disclosed to that recipient falls outside the protections of HIPAA.  In contrast, when a patient consents to the disclosure of their substance use disorder records under Part 2, the Part 2 rules continue to apply to the records disclosed, even when the recipient is not a regulated Part 2 SUD program. Section 3221 of the CARES Act modifies the statute governing the confidentiality of SUD records in various and important ways.  First, a Part 2 SUD program will be allowed to obtain the prior written consent of a patient to use and disclose SUD records for purposes of treatment, payment, and health care operations as permitted by the HIPAA privacy rules.  An SUD program will need to obtain that patient consent only once, and the consent will apply to all future uses and disclosures of SUD records until a patient revokes the consent in writing. The statute goes on to state that any information disclosed pursuant to such a consent may then be redisclosed in accordance with the HIPAA regulations.   Although not entirely clear, this appears to mean that an entity not regulated by HIPAA that receives SUD records pursuant to a consent may redisclose the records without limitation under either HIPAA or the Part 2 rules. The CARES Act also states explicitly that the HIPAA breach notification provisions apply to SUD records held by a Part 2 program in the same manner that those rules apply to HIPAA covered entities. Furthermore, the CARES Act extends HIPAA’s penalty and enforcement provisions to violations of the Part 2 rules.  Although the Department of Health and Human Services (“HHS”) will need to issue regulations to confirm the operation of these enforcement provisions, this appears to mean that the HHS Office for Civil Rights may take on the civil enforcement of the Part 2 rules, in addition to enforcing the HIPAA rules. The primary reason for the historically strict privacy rules applicable to SUD records is to ensure that a patient receiving treatment for a substance use disorder in a Part 2 program is not more vulnerable because of the availability of their patient record than an individual with a substance use disorder who does not seek treatment.  In an effort to maintain this public policy goal while at the same time making the Part 2 rules more consistent with the HIPAA rules, the CARES Act enacts a general antidiscrimination provision prohibiting any entity from discriminating against an individual on the basis of information in Part 2 SUD records in: (a) admission, access to, or treatment for health care; (b) hiring, firing, or terms of employment or receipt of worker’s compensation; (c) the sale, rental, or continued rental of housing; (d) access to federal, state, or local courts; or (e) access to, approval of, or maintenance of government social services and benefits. Furthermore, other than as authorized by a court order or consented to by the patient, no SUD records or testimony relaying the information contained in such records, may be disclosed or used in any civil, criminal, administrative, or legislative proceedings conducted by any governmental authority against a patient. The statute mandates that regulations to implement and enforce these CARES Act provisions be issued to facilitate their application to all uses and disclosure of SUD records occurring on or after one (1) year following the enactment of the CARES Act (which would be March 27th, 2021).   Once implemented, the CARES Act provisions will be helpful to Part 2 programs, many of which struggle with the complexity of complying with both HIPAA and the Part 2 privacy rules.  But the new Part 2 law will by no means alleviate all of that complexity.  For example, a Part 2 program will be required to obtain a patient’s written consent in order to use and disclose SUD records for treatment, payment, and health care operations purposes; for those Part 2 program patients that refuse to sign such a consent, the Part 2 program will likely need to segregate those SUD records in order to manage the stricter limitations on their use and disclosure.  Moreover, the CARES Act does not harmonize Part 2 and HIPAA entirely; there will remain many uses and disclosures that are permitted under HIPAA but not permitted with regard to SUD records under Part 2.  Ultimately the CARES Act provisions modifying the Part 2 confidentiality rules will mitigate, but not eliminate, the complexities of managing patient records regulated by two separate sets of federal privacy rules. If you have questions about the CARES Act, HIPAA, or the Part 2 rules, please contact the author or any attorney in the Dorsey & Whitney health transactions and regulations practice group.

As the world grapples with the health crisis caused by COVID-19, litigation regarding a different health crisis—the opioid epidemic—continues to progress (see our previous posts on this topic here and here). In a major development last week for the multidistrict litigation, the Sixth Circuit concluded that key bellwether cases against twelve large pharmacy chains may not include untimely dispensing allegations. The multidistrict litigation (“MDL”) includes claims by numerous plaintiffs arising out of the nation’s opioid crisis. Two of those plaintiffs—Cuyahoga County and Summit County of Ohio—brought claims against certain pharmacies that sold prescription opioids (in addition to their claims against other defendants like distributors and manufacturers). The Counties’ claims against the pharmacies are scheduled for trial in November 2020. The Counties’ claims against the pharmacies originally related to the pharmacies’ capacity as “distributors” of drugs to their own retail pharmacies. The Counties expressly declined to bring any claims against the pharmacies as “dispensers” of prescription opioids. This is an important distinction. Distributors ship pharmaceuticals wholesale; dispensers fill prescriptions. Discovery against the pharmacies proceeded with respect to their alleged role as distributors. For all parties, discovery included more than 600 depositions and the production of tens of millions of documents. However, nearly ten months after the close of discovery, the Counties reversed course and moved to amend their complaints to add dispensing allegations against the pharmacies. On November 19, 2019—i.e., almost 19 months after the court’s deadline for amendments to the Counties’ complaints—the court granted the Counties’ motion. The court did so based on perceived efficiencies, reasoning the dispensing claims were better considered by the district court now rather than later “in front of some other Court that does not have the expertise I have developed over the past two years.” The court also allowed discovery on the recently-added dispensing claims. The pharmacies were ordered to produce data on every prescription that their pharmacies had filled for any opioid medication, anywhere in the United States, for a period of 13 years—including data on prescriptions outside Ohio, which the district court intended to make available for future cases, but which would be inadmissible in the Ohio-focused case in which it was to be produced. Following the district court’s order, the pharmacies petitioned the U.S. Court of Appeals for the Sixth Circuit for a writ of mandamus. The primary issue before the Sixth Circuit on the pharmacies’ petition was the district court’s decision to allow the Counties to amend their complaints 19 months after the court’s deadline for doing so. The Sixth Circuit granted the writ in a strongly-worded order. Stating that an “MDL court may not . . . distort or disregard the rules of law applicable” to each individual case consolidated in the MDL, the Sixth Circuit concluded there was no “good cause” for the Counties’ failure to timely amend their complaints to add the dispensing allegations. In fact, the Sixth Circuit recognized that the Counties’ express decision to omit those claims earlier “arguably amounts to an outright waiver of them.” According to the Sixth Circuit, “[n]ot a circuit court in the country, so far as we can tell, would allow a district court to amend its scheduling order under these circumstances.” The Sixth Circuit’s ruling once again highlights how the unprecedented scope of the opioid litigation—with more than 2,700 cases consolidated in the MDL—deeply strains ordinary structures and procedures of litigation. In the orders at issue, the district court appeared to value efficiency and the collective interests in managing the MDL as a whole over the individual rights of the parties in the specific case at hand. Stipulating that the “district judge in this case is notably conscientious and capable, and we fully recognize the complexity of his task in managing the MDL here,” the Sixth Circuit nevertheless concluded the district court had gone too far: “Respectfully, the district court’s mistake was to think it had authority to disregard the Rules’ requirements in the Pharmacies’ cases in favor of enhancing the efficiency of the MDL as a whole.” That decision should have been based, but was not, on the record in the individual case before the court. Even in an MDL as complex as the opioid litigation, the district court’s authority to manage it is not without limit. Cases within an MDL retain their separate identities and the parties in those individual cases have rights that cannot be impinged merely to create efficiencies in the MDL generally. Particularly with respect to issues that can be dispositive, e.g., motions for summary judgment or to amend pleadings, it remains important for district courts to articulate and apply the traditional standards governing such issues. The Sixth Circuit’s decision also means that important liability questions in the opioid litigation will remain unanswered for now. Had the dispensing claims been allowed, the trial set for November 2020 may have answered whether a pharmacy could or would be held liable for filling prescriptions issued by someone else. Because those claims are no longer part of the Counties’ complaints, the full extent of potential liability large pharmacies face for the opioid epidemic is still unclear. And unlike other categories of defendants like drug manufactures and large distributors, pharmacies have largely declined to settle the claims against them. The MDL is In re: National Prescription Opiate Litigation, case number 1:17:md-02804, in the U.S. District Court for the Northern District of Ohio.

On Mach 27, 2020, President Trump signed the CARES Act, providing in part for $100 billion in relief funds to eligible health care providers and suppliers affected by COVID-19.  The funding is intended to support healthcare-related expenses, including lost revenue, attributable to the pandemic. Many providers and suppliers received notice on Friday, April 10 that they are recipients of relief funds.  HHS emphasized that these are not loans and will not need to be repaid by recipients.  Below is a summary of the guidance issued by HHS in connection with the initial $30 billion infusion and a brief description of the terms and conditions to which recipients must adhere. Eligibility All facilities and providers that received Medicare fee-for-service (“FFS”) reimbursements in 2019 are eligible to receive these funds.  As noted above, the payments are intended to provide relief to providers in areas impacted by COVID-19 and those providers and suppliers who have been impacted financially by the crisis as a result of healthy patients delaying care and the cancellation of elective procedures.  As a condition of receiving these funds, providers and suppliers must agree not to seek out-of-pocket payments from a patient treated for COVID-19 that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. The relief payments will be made according to taxpayer identification numbers (“TIN”) in accordance with the following: Large Organizations and Health Systems: Large Organizations will receive relief payments for each of their billing TINs that bill Medicare. Each organization should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments. Employed Physicians: Employed physicians should not expect to receive an individual payment directly. The employer organization will receive the relief payment as the billing organization. Physicians in a Group Practice: Individual physicians and other clinicians in a group practice are unlikely to receive individual payments directly, as the group practice will receive the relief fund payment as the billing organization. Solo Practitioners: Solo practitioners who bill Medicare will receive a payment under the TIN used to bill Medicare. Determining Distributions HHS indicated that these payments will be based on the provider’s or supplier’s share of total Medicare FFS reimbursements in 2019.  HHS estimates that total FFS payments in 2019 were approximately $484 billion. Providers and suppliers can estimate their payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000. Providers and suppliers can obtain their 2019 Medicare FFS billings from their organization's revenue management system. Example: A community hospital that billed Medicare FFS $121 million in 2019 would divide that amount by the total Medicare FFS payments (i.e. $484B) and multiply that by the total amount available (i.e. $30B). ($121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000) How Will I Receive These Funds? HHS has partnered with UnitedHealth Group (“UHG”) in an effort to provide rapid payment of these funds.  Eligible recipients will be paid via their ACH account information on file with UHG or on file with the Centers for Medicare and Medicaid Services (“CMS”).  The payments are automatic so recipients do not need to take further action to receive them.  Recipients that receive payments electronically should look for a payment via Optum Bank with “HHSPAYMENT” as the payment description.  Recipients who normally receive a paper check for reimbursement from CMS can expect to receive a check in the next few weeks.  Within 30 days of receiving this payment, recipients must sign an attestation confirming receipt of these funds and agree to the terms and conditions of payment.  The portal for signing the attestation will be open the week of April 13, 2020. Terms and Conditions Within 30 days of receiving payment, recipients must attest to receiving the funds and agree to the Terms and Conditions posted by HHS. Below is a brief summary of those terms and conditions. The recipient must certify the following: that it billed Medicare in 2019; currently provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19; is not currently terminated from participation in Medicare; is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked. The payment may only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Payment may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. The recipient must provide reports to HHS as the Secretary determines at a later date. Not later than 10 days after the end of each calendar quarter, any recipient that is an entity receiving more than $150,000 total in funds under any of the stimulus packages making appropriations for the coronavirus response and related activities shall submit to the Secretary and the Pandemic Response Accountability Committee a report containing the following information: the total amount of funds received from HHS under one of the foregoing enumerated Acts; the amount of funds received that were expended or obligated for reach project or activity; and a detailed list of all projects or activities for which large covered funds were expended or obligated. Recipients are required to maintain appropriate records and cost documentation as required by 45 CFR § 75.302 and 45 CFR § 75.361 through 75.365, and other information required by future program instructions to substantiate the reimbursement of costs under this award. Entities who have received federal awards in the past may already be familiar with these regulations.  These regulations set forth financial management and standards for federal awards, including maintaining accurate and complete documentation and having written policies and procedures detailing the accounting systems in place to perform the following: The ability to report revenue and expenditures separately by federal program; Identification in its chart of accounts of all federal awards received and expended under which federal program; and The process of maintaining records pertaining to the source and application of receipts and disbursements, federal awards, authorizations, obligations, unobligated balances, assets, expenditures, and income and interest, which must be supported by source documentation. For all care for a possible or actual case of COVID-19, the recipient must certify that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. The Terms and Conditions include a number of statutory provisions that also apply to recipients.  More relief funds will be made available in the coming weeks.  HHS indicated that the next round of funding from the remaining $70 billion would be targeted to providers and suppliers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or those who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured patients. If you have any questions about the CARES Act, please contact the authors or your regular Dorsey & Whitney LLP attorney.  Dorsey is closely monitoring the rapidly evolving legal landscape related to the COVID-19 pandemic.

The U.S. Department of Health and Human Services Office of Inspector General (“OIG”) has taken numerous steps to minimize regulatory burdens for providers who need to make their primary focus delivering patient care during the COVID-19 national emergency. These steps, along with recent steps taken by other agencies to provide temporary regulatory flexibility, provide further welcomed relief to providers who are facing a tremendous burden during this time. 1. AKS Administrative Sanctions Not Imposed for Remuneration Covered by Stark Blanket Waivers related to “COVID-19 Purposes” As we wrote about in our prior blog post, on March 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued 18 blanket waivers of sanctions under the federal physician self-referral law (or “Stark Law”) for remuneration and referrals related to “COVID-19 Purposes” (the “Stark Blanket Waivers”). Then, on April 3, 2020, the OIG issued a Policy Statement notifying interested parties that it “will exercise its enforcement discretion not to impose administrative sanctions under the Federal anti-kickback statute [(“AKS”)] for certain remuneration related to COVID-19” that is covered by certain of the Stark Blanket Waivers. As the OIG explained in this Policy Statement, ordinarily, some financial relationships that implicate the Stark Law may also implicate, and may potentially violate, the AKS. In the Policy Statement, the OIG stated that it will not impose sanctions with respect to remuneration covered by the first 11 of the Stark Blanket Waivers, provided that all of the conditions and definitions within the Stark Blanket Waivers are met. This includes certain remuneration to or from a physician that is above or below fair market value and remuneration to a physician in the form of medical staff incidental benefits or non-monetary compensation that exceeds the limits set forth in applicable Stark exceptions (when specified requirements are met). Note that the remainder of the 18 Stark Blanket Waivers relates to referrals rather than remuneration. In the Policy Statement, the OIG specified that parties can submit questions via email to OIGComplianceSuggestions@oig.hhs.gov related to the application of the OIG’s administrative sanctions for remuneration associated with referrals described in items 12-17 of the Stark Blanket Waivers. (The OIG did not mention the 18th Stark Blanket Waiver, which relates to compensation arrangements that do not satisfy the writing or signature requirements of an applicable Stark exception, even though various AKS safe harbors also have writing and signature requirements. Presumably, parties can also submit questions to OIG about such arrangements, although many such arrangements may not implicate the AKS based on a facts and circumstances analysis outside of safe harbor protection.) The OIG stated that its purpose in issuing the Policy Statement was to avoid the need for parties to undertake a separate legal review under the AKS for arrangements that are covered by the Stark Blanket Waivers. The OIG cautioned, however, that the Policy Statement does not have any bearing on arrangements that are not covered by the Stark Blanket Waivers. This would include, for example, arrangements between a manufacturer and a physician, and arrangements that do not involve a physician (or immediate family member of a physician). The Policy Statement applies to conduct occurring on or after April 3, 2020, whereas the Stark Blanket Waivers were retroactive to March 1, 2020. The Policy Statement terminates the same day that the Stark Blanket Waivers terminate (i.e., the end of the Public Health Emergency (“PHE”) that was declared related to COVID-19). 2. Other Recent OIG Initiatives In addition to the Policy Statement described above, the OIG has undertaken other notable initiatives lately related to COVID-19. Specifically: The OIG issued a “Message from leadership on minimizing burdens on providers” on March 30, 2020, in which it stated: “For any conduct during this emergency that may be subject to OIG administrative enforcement, OIG will carefully consider the context and intent of the parties when assessing whether to proceed with any enforcement action.” On April 3, 2020, the OIG posted a FAQ website about the application of OIG’s administrative enforcement authorities (specifically, the AKS and beneficiary inducements civil monetary penalty) to arrangements connected to the COVID-19 PHE. This website sets forth instructions for submitting questions and limitations on the FAQs, including how this informal feedback during the unique circumstances of the PHE differs from the legally binding OIG advisory opinion process (which remains available to interested parties). Thus far, the FAQ website has one FAQ posted, in which the OIG responded to a question about whether health care providers/practitioners can furnish services for free or at a reduced rate to assist long-term care providers facing staffing shortages. The OIG stated: “In the unique circumstances resulting from the COVID-19 outbreak, we believe that these scenarios likely would present a low risk of fraud and abuse under the Federal anti-kickback statute and the Beneficiary Inducements CMP provided the services being offered are (i) necessary to meet patient care needs as a result of staffing shortages directly connected to the COVID-19 outbreak; (ii) provided for free or at a reduced cost only when necessary as a result of the COVID-19 outbreak; (iii) limited to the period subject to the COVID-19 Declaration; and (iv) not contingent on referrals for any items or services that may be reimbursable in whole or in part by a Federal health care program, either during or after the COVID-19 Declaration period.” The OIG has a “COVID-19 Portal” website, which includes a link for submitting questions regarding OIG’s authorities during the COVID-19 PHE, as well as links for information about other news and resources regarding OIG’s COVID-19 initiatives. On April 3, 2020, the OIG published a report based on brief phone interviews (or “pulse surveys”) that it conducted from March 23 to March 27, 2020 from a random sample of 323 hospitals across the country on challenges the hospitals are facing in responding to COVID-19, strategies used to address those challenges, and how the government can provide support. A summary of the report can be found here, and the complete report can be found here. Finally, while not related to easing provider burdens during the COVID-19 PHE, we note that on March 23, 2020, the OIG alerted the public about new fraud schemes related to COVID-19. In addition, a number of recently added OIG work plan items relate to COVID-19 response matters. * * * For assistance in determining whether an existing or proposed arrangement meets the criteria for waiving AKS administrative sanctions under the OIG Policy Statement described herein, or for any other questions regarding recent OIG initiatives related to COVID-19, please contact the authors or your regular Dorsey & Whitney LLP attorney. Dorsey is closely monitoring the rapidly evolving legal landscape related to the COVID-19 pandemic. You can access Dorsey’s health law blog related to health law updates, available here. You can also access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here.

On Monday, April 6th the Centers for Medicare and Medicaid Services (“CMS”) adopted an interim final rule to change a wide range of Medicare payment policies during the COVID-19 public health emergency so that Medicare providers and suppliers have flexibility to furnish services to beneficiaries using remote communications technology. As healthcare providers implement infection prevention and control procedures throughout their operations, CMS recognizes that immediately and temporarily increasing the availability of services using telecommunications technology is necessary and appropriate to maintain Medicare beneficiary access to medically necessary services without jeopardizing their health or the health of the healthcare workers furnishing those services. The interim final rule with comment period is applicable to services provided beginning March 1, 2020, and will be effective for the period of the COVID-19 public health emergency. The rule addresses a variety of Medicare payment policies (including coverage, supervision, and “home bound” requirements) applicable to physicians and other clinicians, hospitals, home health agencies, hospice agencies, independent laboratories, ambulance service providers, rural health clinics, federally qualified health centers, inpatient rehabilitation facilities, and Medicare Part C and D health plans. The following summarizes the Medicare payment policy changes. 1. Place of Service Coding for Medicare Telehealth Services Medicare pays for a discrete set of services under Social Security Act § 1834(m) that are reported using codes that describe ‘‘face-to-face’’ services but are furnished using audio/video, real-time communication technology, instead of in-person. Clinicians bill for these Medicare telehealth services using a unique place of service code “02,” which identifies them as Medicare telehealth services. CMS pays the physician or practitioner for Medicate telehealth services at the lower Medicare Physician Fee Schedule “facility rate” because facility expenses (e.g., staff, supplies, and equipment) associated with the services are generally incurred by the site where the patient is located, and not by the remotely-located practitioner. On an interim basis CMS will pay for Medicare telehealth services at the rate that ordinarily would be paid under the Medicare physician fee schedule if the services were furnished in-person. Physicians and other practitioners billing for Medicare telehealth services should report the place of Service code that would have been reported had the service been furnished in person instead of place of service code “02.” Because Medicare identifies claims for telehealth services through the place of service code “02,” CMS has finalized use on an interim basis of CPT telehealth modifier 95, which applies to claim lines that describe services furnished via telehealth. 2. Additions to Medicare Telehealth Services As noted above, Medicare pays for a defined set of Medicare telehealth services. For telehealth services with dates of service beginning March 1, 2020 through the end of the declared COVID-19 public health emergency (including any renewals), CMS is adding the following services to the list of covered Medicare telehealth services. Together with CMS’ waivers the originating site requirements applicable to Medicare telehealth services and the OIG’s policy statement addressing waiver of beneficiary copayments for telehealth services, this expansion in covered telehealth services can facilitate the meaningful and quick expansion in deployment of telehealth services. A. Emergency Department Visits  99281 99282 99283 99284 99285 B. Initial and Subsequent Observation, and Observation Discharge Day Management 99217 99218 99219 99220 99224 99225 99226 99234 99235 99236 C. Initial Hospital Care and Hospital Discharge Day Management 99221 99222 99223 99238 99239 D. Initial Nursing Facility Visits and Nursing Facility Discharge Day Management 99304 99305 99306 99315 99316 E. Critical Care Services 99291 99292 F. Domiciliary, Rest Home, or Custodial Care Services 99327 99328 99334 99335 99336 99337 G. Home Visits 99341 99342 99343 99344 99345 99347 99348 99349 99350 H. Inpatient Neonatal and Pediatric Critical Care 99468 99469 99471 99472 99473 99475 99476 I. Initial and Continuing Intensive Care Services 99477 99478 99479 99480 J. Care Planning for Patients With Cognitive Impairment 99483 K. Group Psychotherapy 90853 (Group psychotherapy (other than of a multiple-family group)) L. End-Stage Renal Disease (ESRD) Services 90952 90953 90959 90962 M. Psychological and Neuropsychological Testing 96130 96131 96132 96133 96136 96137 96138 96139 N. Therapy Services: For these services, CMS states that because Social Security Act § 1834(m) does not provide for payment for these services as Medicare telehealth services when furnished by physical therapists, occupational therapists, or speech language pathologists. 97161 97162 97163 97164 97165 97166 97167 97168 97110 97112 97116 97535 97750 97755 97760 97761 92521 92522 92523 92524 92507 O. Radiation Treatment Management Services 77427 77427 3. Frequency Limitations on Subsequent Care Services in Inpatient and Nursing Facility Settings, and Critical Care Consultations CMS is removing the frequency restrictions for each of the following codes for subsequent inpatient visits and subsequent nursing facility visits furnished via Medicare telehealth for the duration of the PHE for the COVID–19 pandemic. A. Subsequent Inpatient Visits 99231 99232 99233 B. Subsequent Nursing Facility Visits 99307 99308 99309 99310 C. Critical Care Consultation Services G0508 G0509 4. Required ‘‘Hands-On’’ Visits for ESRD Monthly Capitation Payments Current Medicare rules state that for End Stage Renal Disease (“ESRD”) related services that are on the Medicare telehealth list, a required clinical examination of the vascular access site must be furnished face-to-face ‘‘hands on’’ (without the use of an interactive telecommunications system) by a physician, clinical nurse specialist (CNS), nurse practitioner (NP), or physician assistant (PA). CMS is permitting on an interim basis the required clinical examination to be furnished as a Medicare telehealth service during the COVID–19 pandemic. In addition, Medicare rules typically require that a beneficiary receive a face-to-face visit, without the use of telehealth, at least monthly in the case of the initial 3 months of home dialysis and at least once every 3 consecutive months after the initial 3. CMS states that they will exercise enforcement discretion on an interim basis to relax enforcement in connection with the requirements under Social Security Act § 1881(b)(3)(B) that certain visits be furnished without the use of telehealth. Specifically, CMS will not conduct review to consider whether those visits were conducted face-to-face, without the use of telehealth. This applies to the following codes: 90951 90952 90953 90954 90955 90957 90958 90959 90960 90961 90962 90963 90964 90965 90966 90967 90968 90969 90970 5. Communication Technology-Based Services Certain services are performed using remote communications technology and are paid for by the Medicare program, but are not considered Medicare telehealth services because these services are by their nature performed using communications technology and are not ordinarily performed in person. These services include certain remote patient monitoring services (e.g., CPT codes 99453, 99454, 99457, and 99458, virtual check-in services). CMS payment rules for these services have limited their use to established patients only, and advance beneficiary consent has been required. The interim final rule states that all of these services can be furnished to both new and established patients. CMS also states that beneficiary consent to receive these services can be obtained annually, can be obtained at the time that a service is furnished, and may be documented by auxiliary staff under general supervision. To mitigate exposure risks, CMS is also broadening the types of clinicians that can perform remote evaluation of patient images and virtual check-ins (HCPCS codes G2010 and G2012) to include licensed clinical social workers, clinical psychologists, physical therapists, occupational therapists, and speech-language pathologists. 6. Direct Supervision Many services paid under the Medicare physician fee schedules, such as services performed incident to a physician’s professional service (see 42 C.F.R. § 410.26), must be provided under the direct supervision of the billing physician or nonphysician practitioner, meaning that the physician or nonphysician practitioner must be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. CMS is temporarily modifying the definition of direct supervision at 42 C.F.R. § 410.32(b)(3)(ii) to state that direct supervision includes virtual presence through audio/video real-time communications technology. Similarly, the definitions of direct supervision applicable to hospital outpatient services at 42 C.F.R. § 410.28(e)(1) and hospital rehabilitation and intensive cardiac rehabilitation services described at 42 C.F.R. §§ 410.47 and 410.49 are modified in the same manner to permit physician supervision of these hospital services via virtual presence through audio/video real-time communications technology when use of such technology is indicated to reduce exposure risks for the beneficiary or health care provider. Additionally, the minimum default level of physician supervision for the initiation of outpatient non-surgical extended duration therapeutic services will now be changed from direct supervision to general supervision. 7. Definition of Homebound for Purposes of Home Health Benefits The interim final rule addresses whether beneficiaries instructed to remain in their homes or are under ‘‘self-quarantine’’ are considered ‘‘confined to the home’’ or ‘‘homebound’’ for purposes of the Medicare home health benefit. CMS states that the current definition of ‘‘confined to the home’’ (that is, ‘‘homebound’’) would apply to patients: (a) Where a physician has determined that it is medically contraindicated for a beneficiary to leave the home because he or she has a confirmed or suspected diagnosis of COVID–19; or (b) where a physician determines that it is medically contraindicated for a beneficiary to leave the home because the patient has a condition that may make the patient more susceptible to contracting COVID–19. Beneficiaries must meet all other eligibility requirements to receive Medicare home health services. The beneficiary must be under the care of a physician; receiving services under a plan of care established and periodically reviewed by a physician; be in need of skilled nursing care on an intermittent basis or physical therapy or speech-language pathology; or have a continuing need for occupational therapy. 8. Home Health Benefits and Remote Technology CMS is also amending home health plan of care requirements at 42 C.F.R. § 409.43(a) to allow the integration of technology and remote communication into the home health plan of care, so long the use of technology is related to the skilled services being furnished by the nurse/therapist/therapy assistant to optimize the services furnished during the home visit, and that the use of technology is included on the home health plan of care along with a description of how the use of such technology will help to achieve the goals outlined on the plan of care without substituting for an in person visit as ordered on the plan of care. On an interim basis home health agencies can report the costs of telecommunications technology as allowable administrative and general costs on their cost reports. 9. Telecommunications and Hospice For hospices, regulations at 42 C.F.R. § 418.204 are modified to state that when a patient is receiving routine home care, hospices may provide services via a telecommunications system if it is feasible and appropriate to do so to ensure that Medicare patients can continue receiving reasonable and necessary services for the palliation and management of a patients’ terminal illness and related conditions without jeopardizing the patients’ health or the health of those who are providing such services. The use of such technology must be included on the plan of care. The inclusion of technology on the plan of care must continue to meet the requirements at 42 C.F.R. § 418.56, and must be tied to the patient-specific needs as identified in the comprehensive assessment and the measurable outcomes that the hospice anticipates will occur as a result of implementing the plan of care. Telecommunication technology can also be used by a hospice physicians or nurse practitioner for a face-to-face visit used solely for the purpose of recertifying a patient for hospice services. Telecommunications technology for this purposes means multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and distant site hospice physician or nurse practitioner. Hospices can also report hospices can report the costs of telecommunications technology used to furnish services under the routine home care level of care during the public health emergency as ‘‘other patient care services’’ on their cost report. 10. Inpatient Rehabilitation Facilities In order to be considered medically necessary, inpatient rehabilitation facility services must be expected to require medical supervision involving a rehabilitation physician conducting face-to-face visits with the patient at least 3 days per week throughout the patient’s stay. CMS is modifying these rules to permit such visits to be conducted using remote telecommunication technology. In addition, CMS is temporarily eliminating the requirement that at the time of admission a patient’s medical record at the facility must contain a postadmission physician evaluation. 11. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) For RHCs and FQHCs, CMS is expanding the services that can be included in the payment for HCPCS code G0071, and is updating the payment rate for this code to include the national non-facility payment rates for three new codes (CPT Codes 99421, 99422, and 99423) to reflect the addition of these services. In addition, to address the impact of the COVID–19 pandemic on underserved rural and urban communities, CMS is implementing changes to the requirements for visiting nursing services furnished in the home by RHCs and FQHCs. For the duration of the public health emergency, any area typically served by the RHC, and any area that is included in the FQHCs service area plan, is determined to have a shortage of home health agencies, and there is no need for the RHC or FQHC to request a determination that there is a shortage of home health agencies in the area in order for visiting nurse services to be covered by Medicare. 12. Clinical Laboratory Fee Schedule and Merit-based Incentive Payment System Updates In order to expand the testing available to Medicare beneficiaries who need it, payments will now be provided to independent laboratories for specimen collection for COVID-19 testing under certain circumstances. A travel allowance will also be provided for a lab technician to collect a specimen for testing from non-hospital inpatients or homebound patients. Clinician participation in a COVID-19 clinical trial utilizing a drug or biological product to treat a patient with a COVID-19 infection will now be credited as an improvement activity for the Merit-based Incentive Payment System (MIPS) 2020 performance period. Additionally, the MIPS automatic extreme and uncontrollable circumstances policy will be applied to MIPS eligible clinicians for the 2019 MPS performance period as data submission for 2019 will be impacted. 13. Opioid Treatment Programs Audio-only telephone calls will be permitted for the therapy and counseling portions of the weekly bundle of services furnished by Opioid Treatment Programs if the beneficiaries do not have access to two-way audio/video communications technology. 14. Teaching Physicians, Residents and Moonlighting Regulations The teaching physician regulations are amended to allow the teaching physician to provide supervision either with physical presence or be present through interactive telecommunications technology during the key portion of residents’ service. Residents may also provide services from quarantine, such as reading the results of tests and other imaging studies under the supervision of the teaching physician by interactive telecommunications technology. This change does not apply in the case of surgical, high risk, interventional, or other complex procedures, services performed through an endoscope, and anesthesia services. CMS clarified that Medicare may make payment under the PFS for teaching physician services, including under the primary care exception, when a resident furnishes telehealth services to beneficiaries under direct supervision of the teaching physician which is provided by interactive telecommunications technology. CMS is also permitting the hospital that is paying the resident’s salary and fringe benefits for the time that the resident is at home or in the home of a patient that is already a patient of the physician or hospital, but performing patient care duties within the scope of the approved residency program, to claim that resident for indirect medical education and direct graduate medical education purposes. During the emergency, “moonlighting,” or services of residents that are not related to their approved GME programs and are performed in the inpatient setting of a hospital in which they have their training program, are separately billable physicians’ services for which payment can be made. 15. Psychiatric Hospitals CMS has deleted several references to 42 C.F.R. § 482.12(c) in 42 C.F.R. § 492.61(d) to clarify that the latter’s provisions apply to all patients, not only Medicare beneficiaries. 16. Innovation Center Models CMS is now permitting certain beneficiaries to obtain the set of Medicare Diabetes Prevention Program (MDPP) services more than once per lifetime, increase the number of virtual make-up sessions, and allow certain MDPP suppliers to deliver virtual MDPP sessions on a temporary basis. CMS is also implementing a 3-month extension to the Comprehensive Care for Joint Replacement model performance year 5 and amending the CJR extreme and uncontrollable circumstances policy to be applicable to episodes impacted by the COVID-19 pandemic. 17. Remote Physiologic Monitoring Remote physiologic monitoring services can temporarily be furnished to new patients, as well as to established patients. Further, consent to receive RPM services can be obtained once annually, including at the time services are furnished, during the duration of the COVID-19 public health emergency. RPM codes can also be used for physiologic monitoring of patients with acute and/or chronic conditions. 18. Evaluation and Management (E/M) Services CMS is finalizing, on an interim basis, separate payment for CPT codes 98966-98968 and CPT codes 00441-99443. For these codes, work RVUs as recommended by certain AMA Committees are finalized: 0.25 for CPT code 98966 0.50 for CPT code 98967 0.75 for CPT code 98968 0.25 for CPT code 99441 0.50 for CPT code 99442 0.75 for CPT code 99443. Additionally, CMS is finalizing the recommended direct PE inputs which consist of 3 minutes of post-service RN/LPN/MTA clinical labor for each time code. CMS will also not conduct reviews to consider whether those services were furnished to established patients, and the services may be furnished to new patients as well. To facilitate billing of CPT codes 98966-98968, CMS is designating these codes as “sometimes therapy” services that would require the private practice occupational therapist, physical therapist, and speech-language pathologist to include the corresponding GO, GP, or GN therapy modifier on those claims. CMS is also permitting the office/outpatient E/M level selection for office/outpatient services when furnished via telehealth to be based on MDM or time, with time defined as all of the time associated with the E/M on the day of the encounter. Any requirements regarding documentation of history and/or physical exam in the medical record are removed for office/outpatient services via telehealth, though E/M visits should continue to be documented as necessary to ensure quality and continuity of care. 19. National Coverage Determination and Local Coverage Determination Requirements Certain National Coverage Determinations and Local Coverage Determinations of covered items or services will not apply during the COVID-19 Pandemic, including: face-to-face and in person requirements; clinical indications for certain respiratory, home anticoagulation management and infusion pump policies; and requirements for consultations or services furnished by or with the supervision of a particular medical practitioner or specialist. 20. Part C and Part D Quality Star Ratings CMS is modifying the calculation of the 2021 and 2022 Medicare Part C and D Star Ratings in several ways to address the expected disruption to data collection. The interim final rule: A. replaces the 2021 Star Ratings measures calculated based on HEDIS and Medicare CAHPS data collections with earlier values from the 2020 Star Ratings (which are not affected by the public health threats posed by COVID-19); B. establishes how CMS will calculate or assign Star Ratings for 2021 in the event that CMS’ functions become focused on only continued performance of essential agency functions and CMS and/or its contractors do not have the ability to calculate the 2021 Star Ratings; C. modifies the current rules for the 2021 Star Ratings to replace any measure that has a data quality issue for all plans due to the COVID-19 outbreak with the measure-level Star Ratings and scores form the 2020 Star Ratings; D. in the event that CMS is unable to complete HOS data collection in 2020 (for the 2022 Star Ratings), replaces the measures calculated based on HOS data collections with earlier values that are not affected by the public health threats posed by COVID-19 for the 2022 Star Ratings; E. removes guardrails for the 2022 Star Ratings; and F. expands the existing hold harmless provision for the Part C and D Improvement measures to include all contracts for the 2022 Star Ratings. 21. Ordering Medicaid Home Health Services In addition to physicians, licensed practitioners such as NPs and PAs may order Medicaid home health services during the existence of the PHE for the COVID-19 pandemic. These services include part-time or intermittent nursing, home health aide services, medical supplies, equipment, and appliances, and may include therapeutic services. This change applies to who can order home health services covered under 42 C.F.R. § 440.70(b)(1)–(4). It does not expand the benefit categories where these items can be covered. 22. Origin and Destination Requirements Under the Ambulance Fee Schedule The list of destinations for covered ambulance transportation is expanded to include all destinations, from any point of origin, that are equipped to treat the condition of the patient consistent with EMS protocols established by state and/or local laws where the services will be furnished. 23. Inpatient Hospital Services Furnished Under Arrangements Outside the Hospital The “under arrangements” policy is changed to allow hospitals broader flexibilities to furnish inpatient services, including routine services, outside the hospital. For services provided for discharges for patients admitted to the hospital during the PHE for COVID-19 beginning March 1, 2020, if routine services are provided under arrangements outside the hospital to its inpatients, these services are considered as being provided by the hospital. 24. Advance Payments to Suppliers Furnishing Items and Services under Part B Under Medicare Part B, the definition of advance payments to suppliers furnishing items and services will change from a payment made by the carrier to a payment made by the contractor, and payments under emergency exceptions will be permitted. CMS is also increasing the advance payment limit from 80 percent of the anticipated payment to 100 percent.

The COVID-19 pandemic has led to rapid and drastic changes to health care delivery in the United States, including as it relates to arrangements between health care providers and physicians that may implicate the federal physician self-referral law, or “Stark Law.” On March 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued much-anticipated nationwide blanket waivers of sanctions under the Stark Law for “COVID-19 Purposes” (the “Stark Blanket Waivers”), which are available here. The Stark Blanket Waivers have a retroactive effective date of March 1, 2020 and will continue through the end of the Public Health Emergency (“PHE”) that was declared related to the COVID-19 outbreak. The Stark Blanket Waivers, which were issued under Section 1135 of the Social Security Act, permit numerous flexibilities to ensure that: “(1) sufficient health care items and services are available to meet the needs of individuals enrolled in the Medicare, Medicaid, and CHIP programs; and (2) health care providers . . . that furnish such items and services in good faith, but are unable to comply with one or more of the specified requirements of [Stark] as a result of the consequences of the COVID-19 pandemic, may be reimbursed for such items and services and exempted from sanctions for such noncompliance, absent the government’s determination of fraud or abuse.” These flexibilities provide welcome relief for health care providers that are facing much uncertainty and overwhelm in this time of rapid and drastic change. Stark is a strict liability law with very significant civil penalties and prohibitions on billing the Medicare program associated with its violation. However, during the PHE, CMS will reimburse for services provided pursuant to referrals that would otherwise violate Stark, and will not impose penalties, as long as the Stark Blanket Waivers are followed. It is important to keep in mind that each Stark Blanket Waiver is limited to the specific circumstances described in the waiver. Health care providers are required to satisfy every condition of the Stark Blanket Waiver in order to take advantage of it, so special attention should be paid to the requirements. CMS cautioned that any remuneration described in the Stark Blanket Waivers must be directly between the entity and: (1) the physician or the physician organization in whose shoes the physician stands under 42 C.F.R. § 411.354(c); or (2) the immediate family member of the physician. Further, CMS cautioned that the remuneration and referrals described in the Stark Blanket Waivers must be solely related to “COVID-19 Purposes.” CMS specifies that “COVID-19 Purposes” means, for purposes of the Stark Blanket Waivers: Diagnosis or medically necessary treatment of COVID-19 for any patient or individual, whether or not the patient or individual is diagnosed with a confirmed case of COVID-19; Securing the services of physicians and other health care practitioners and professionals to furnish medically necessary patient care services, including services not related to the diagnosis and treatment of COVID-19, in response to the COVID-19 outbreak in the United States; Ensuring the ability of health care providers to address patient and community needs due to the COVID-19 outbreak in the United States;  Expanding the capacity of health care providers to address patient and community needs due to the COVID-19 outbreak in the United States; Shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 outbreak in the United States; or Addressing medical practice or business interruption due to the COVID-19 outbreak in the United States in order to maintain the availability of medical care and related services for patients and the community. There are eighteen Stark Blanket Waivers. It is critical to know that each waiver is specific in its requirements and application, so health care providers should not rely on this summary in order to use a Stark Blanket Waiver. Instead, providers should carefully review the details of each waiver prior to making a decision to proceed with an arrangement in reliance on a waiver. A few of the Stark Blanket Waivers are briefly summarized as follows: Remuneration to a physician that is above or below fair market value for services personally performed by the physician. Rental charges paid to a physician that are below fair market value. Remuneration to a physician in the form of medical staff incidental benefits or non-monetary compensation that exceeds the limits set forth in applicable Stark regulations. Loans to a physician with below fair market value interest rates or on terms that are not available from a traditional lender. Referrals by a physician owner of a hospital that temporarily expands its facility capacity above its baseline number without prior application and approval of the facility expansion as required under Stark. Referrals by physicians in a group practice in a location that does not qualify as the “same building” or “centralized building” as typically required under Stark. Referrals by a physician to an entity with which the physician has a compensation arrangement that does not satisfy the writing or signature requirements of the applicable Stark exception, as long as all of the other requirements of the exception are met (unless the other requirements have been waived under one or more of the Stark Blanket Waivers). While no data or notification is required to be submitted to CMS in order to use the Stark Blanket Waivers, parties seeking to utilize the Stark Blanket Waivers should develop and retain records related to the use of the waivers in order to support the fact that the decision to use the waivers was for COVID-19 Purposes, and to document that each requirement of the waiver was satisfied. These records must be made available to the Secretary of the Department of Health and Human Services upon request. At the end of the document setting forth the Stark Blanket Waivers, CMS provided two pages of examples of the application of the Stark Blanket Waivers. CMS clarified that unless a Stark Blanket Waiver expressly applies only to a specific type of entity (e.g., a home health provider), then the examples that CMS provided which reference a hospital would apply to any entity that furnishes designated health services. Finally, CMS provided the email address for individuals to use to submit inquiries about the blanket waivers, available here: 1877CallCenter@cms.hhs.gov. We note that individual waivers of sanctions under the Stark Law are still available and may be granted upon request submitted to the email address noted above. Such individual waiver requests are a good option for a party to consider if an existing or proposed arrangement does not appear to qualify for a Stark Blanket Waiver (or an existing Stark exception). * * * For assistance in determining whether an existing or proposed arrangement complies with a Stark Blanket Waiver and/or for inquiries regarding individual waiver requests, please contact the authors or your regular Dorsey & Whitney LLP attorney. Dorsey is closely monitoring the rapidly evolving legal landscape related to the COVID-19 pandemic. You can access Dorsey’s health law blog related to health law updates, available here. You can also access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here.

On March 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) published a compilation of COVID-19 Emergency Declaration Blanket Waivers for Health Care Providers (each, a “Blanket Waiver”). Section 1135 of the Social Security Act gives CMS the authority to issue waivers that ease requirements for providers affected by an emergency if: (1) the President makes an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the “Stafford Act”); and (2) the Secretary of the Department of Health and Human Services declares a Public Health Emergency (“PHE”), both of which have now occurred in light of COVID-19. CMS is permitted to issue both blanket waivers and provider/supplier requested waivers on a case-by-case basis. Blanket waivers apply to all applicable providers and suppliers, while individual waivers apply only to the requesting provider or supplier. A provider or supplier need not request a provider/supplier-specific waiver of a requirement if CMS has issued a blanket waiver addressing the same requirement. It is important to note that 1135 waivers apply solely to federal requirements and do not apply to state licensure or other requirements. Any applicable state requirements (e.g., licensure) must also be addressed with the relevant state agency. Another important note of caution is that these 1135 waivers often include specific details and requirements. It is critical for health care providers to review the waivers carefully before taking action under them. To that end, providers should visit the CMS Coronavirus Waivers & Flexibilities website, here, to locate the specific guidance and requirements from CMS about the type of program waiver(s) being sought. CMS has provided numerous Frequently Asked Questions (“FAQ”) documents and provider-specific fact sheets that detail the details about and limits of the available waivers and flexibilities for each type of provider (hospital, skilled nursing facility, physicians, laboratories, home health providers, etc.). Additionally, this website contains links to all of the waivers provided in each state. The following is a summary of the Blanket Waivers CMS has made available to providers and suppliers on March 30, 2020. These Blanket Waivers are retroactively effective back to March 1, 2020 and will continue through the end of the emergency declaration. I. Hospital Waivers The Blanket Waivers include significant regulatory relief for hospitals. The following is a summary of the hospital-specific Blanket Waivers, and here is a CMS Fact Sheet that was published for hospitals to further explain these specific Blanket Waivers: a. Temporary Expansion Sites (a.k.a. Hospitals Without Walls) Under this Blanket Waiver, hospitals are permitted to offer health care services in locations that are not currently part of the hospital. Previously, hospitals would have been required to meet Life Safety Code and other regulatory provisions and obtain approvals to provide services in a new location. This waiver will help hospitals set up temporary expansion sites to offer inpatient services (e.g., nursing, room and board) in locations such as shell space in a hospital, parking structures, dormitories and the like – as long as the hospital exercises control and oversees the services provided at the location, and as long as the location is approved by the state (to ensure safety and comfort for patients and staff). CMS is also allowing currently enrolled ambulatory surgery centers (“ASCs”) to temporarily enroll as hospitals by calling the COVID-19 Provider Enrollment Hotline to complete and sign an attestation form in order to enroll and provide services during the PHE as a hospital. CMS also encourages other entities (e.g., freestanding emergency departments which are not currently allowed to enroll in Medicare) to call the COVID-19 Provider Enrollment Hotline to complete and sign an attestation form in order to enroll and provide services during the PHE. Further, CMS is allowing hospitals to change their provider-based locations to address patient needs, as well as allowing additional flexibilities related to inpatient services furnished under arrangements. Moreover, hospitals are permitted to screen patients at locations off of a provider’s campus, in order to avoid the spread of COVID-19. Further, for surge facilities in off campus departments, CMS is waiving the requirements to have policies and procedures for evaluating emergencies so these facilities do not need to focus time on drafting policies and procedures but rather can focus on patient care needs. b. Relaxed Paperwork, Policies, Cost Reporting, Filing Deadlines and Enrollment Requirements For hospitals that are impacted by a widespread outbreak of COVID-19, the timeframes for providing patients a copy of their medical records are waived, as are the requirements related to visitation and seclusion. Additionally, CMS is granting a 30-day post-discharge requirement to complete medical records, CMS is waiving medical records department staffing requirements, and also waiving specific requirements for the form and content of the medical record and the medical record completion requirements. Further, verbal orders can be authenticated more than 48 hours after the fact (although read-back verification is still required). CMS is also waiving requirements to provide information about advanced directives to patients. Further, To ensure that hospitals and critical access hospitals focus on patient care and ensuring patients are discharged in an appropriate setting, as opposed to focusing on the paperwork and other regulatory obligations, CMS is waiving the detailed regulatory paperwork and other requirements related to discharge planning. For example, CMS recognizes that during the PHE, hospitals may not be able to use specific quality metrics and other data, or a comprehensive list of nursing homes in the area, to select a nursing home or home health agency. However, hospitals are still required to work with families to ensure that the discharge meets patients’ care needs. Further, CMS is waiving the entire condition of participation related to utilization review plans and committees, nursing care plans, having available a current therapeutic diet manual, developing and implementing emergency preparedness policies and procedures and communication plans, as well as waiving the detailed provisions governing a hospital’s quality assessment and performance improvement program (although hospitals must still have such a program in place). CMS has established a toll-free hotline for all providers as well as significant flexibilities in provider enrollment. See here for additional information from CMS on provider enrollment relief, as well as our previous blog post on this topic, available here. Further, CMS is waiving the signature and proof of delivery requirements for Part B drugs and durable medical equipment (although the delivery and the fact that a signature could not be obtained due to COVID-19 should be documented in the record). Additionally, CMS is delaying the cost-report filing deadlines until June and July, and CMS is extending the data submission deadlines for hospitals on the reporting of occupational mix of employees until August 3, 2020. Further, Medicare Administrative Contractors (“MACs”), Qualified Independent Contractors (“QICs”), and Independent Review Entities (“IREs”) are allowed to grant extensions to providers on appeals and are permitted to offer other flexibilities on filings and deadlines. c. Critical Access Hospitals (“CAHs”) Without Walls CAHs are now permitted to exceed their 25 bed limit and the 96 hour length of stay limit. CMS is also permitting CAHs to treat patients in urban areas (they typically must be located in a rural area) as needed in order to establish surge locations. Further, CMS is waiving the restrictions on CAHs’ ability to establish off campus provider based locations, and to establish the normally restricted co-location arrangements with other providers. CMS is waiving the minimum personnel qualification requirements at CAHs for clinical nurse specialists, nurse practitioners and physician assistants, and CMS is deferring to the state for the requirements of staff licensure, certification or registration, which will allow more flexibility to CAHs in states where federal requirements are more stringent. d. Distinct Part Units CMS is also now allowing hospitals to house acute care patients in excluded distinct part units (as long as the unit’s beds are appropriate for acute inpatients). Hospitals are permitted to bill for the care provided in the distinct part unit under the Inpatient Prospective Payment System. Providers should annotate in the medical record to explain that the care was provided in the distinct part unit due to capacity issues related to the PHE. Hospitals are also now permitted to provide care in acute care beds and units for patients who would normally be treated in distinct part psychiatric units or distinct part rehabilitation units, as long as the acute beds and units are appropriate for such patients. Hospitals should continue to bill under the Inpatient Psychiatric or Inpatient Rehabilitation Prospective Payment System for those patients, and annotate in the medical record to explain that the care was provided in the acute care unit due to capacity issues or other exigent circumstances related to the PHE. e. Telemedicine CMS is waiving telemedicine restrictions on hospitals and CAHs to make it easier for these providers to provide telemedicine for their patients through agreements with off-site hospitals, in order to improve access to specialty care. f. Workforce CMS is waiving the sterile compounding requirements to allow the re-use of face masks. CMS is also waiving the 2-year reappointment period for medical staff re-credentialing, the requirement that patients in a hospital be under the care of a physician (to allow other practitioners like physician assistants and APRNs to be used to the fullest extent possible), and CMS is waiving the requirement for CRNAs to work under the supervision of a physician. Further, CMS has stated that Hospitals do not have to designate in writing the personnel qualified to perform specific respiratory care procedures or the amount of supervision required for personnel to carry out those procedures. II. Long-Term Care, Skilled Nursing Facilities, and Nursing Facility Waivers The Blanket Waivers provide a number of flexibilities related to nursing services. See here for the CMS fact sheet published specifically for long term care facilities. CMS is waiving the 3-day prior hospitalization requirement for coverage of a skilled nursing facility (“SNF”) stay, waiving the timeframe requirements for certain data submission for SNFs and long-term care (“LTC”) facilities, and allowing nursing homes to suspend pre-admission screening and annual resident review assessments. Certain physical environment requirements are now waived, allowing for expanded use of non-SNF buildings or non-resident rooms in a LTC facility for patients in certain emergency circumstances. To promote social distancing: requirements that residents participate in-person in resident groups are waived; requirements related to room-sharing and moving a resident’s room are waived for the purpose of grouping or separating residents with respiratory illness symptoms and/or residents with a confirmed COVID-19 diagnosis from residents without these symptoms or diagnosis; and physicians and non-physician practitioners may conduct visits through telehealth options when previously the visits were required to be in-person. CMS is also partially waiving training and certification requirements required for nurse aids employed for longer than four months at a facility in order to assist with potential staffing shortages. CMS has waived certain resident transfer and discharge requirements in particular circumstances, though advance notification and receiving facility agreements are generally still required, and related care planning requirements are also waived in certain circumstances. Additionally, CMS is delaying the cost-report filing deadlines until June and July, and CMS is extending the data submission deadlines for hospitals on the reporting of occupational mix of employees until August 3, 2020. Further, Medicare Administrative Contractors (“MACs”), Qualified Independent Contractors (“QICs”), and Independent Review Entities (“IREs”) are allowed to grant extensions to providers on appeals and are permitted to offer other flexibilities on filings and deadlines. III. Home Health, Hospice, ESRD, and DMEPOS Waivers CMS has provided FAQ documents on these waivers for home health, here; for hospice, here; for ESRD Facilities, here; and for DME Suppliers, here. Under the Blanket Waivers, CMS provided extensions for home health, hospice, and ESRD providers to complete certain assessment required for Medicare reimbursement. CMS also waived certain home health, hospice and ESRD in-person assessment, visit, and supervision requirements to reduce the need for ordinary course check-ins and to allow for greater use of telehealth. In addition, hospices are relieved of the requirement to provide non-core hospice services, such as physical therapy, occupational therapy, and speech-language pathology. In providing additional flexibility in timing and in-person visits, CMS’s goal is to support containment efforts for at-risk populations and to free up professional resources to focus on treatment of those infected with coronavirus and to focus on operations related to the pandemic. In addition, CMS is waiving certain routine audits, maintenance, and certification requirements for ESRD Facilities and ESRD Facility staff. Again, CMS is attempting to free up resources and provide flexibility to support providers’ focus on pandemic-related efforts. CMS authorized the establishment of Special Purpose Renal Dialysis Facilities (“SPRDF”) to mitigate transmission among the at-risk population. Such facilities do not require a federal survey to be completed before providing services. CMS is allowing physicians that are appropriately credentialed at a certified dialysis facility to provide care at a “designated isolation location” such as a SPRDF without separate credentialing. Dialysis services may now also be provided in nursing homes and SNFs, so long as the services and necessary equipment and supplies are provided by personnel of the resident’s usual Medicare-certified dialysis facility. In an effort to expedite supply of and reimbursement for DMEPOS, CMS is waiving the replacement requirements (such as the face-to-face requirement, a new physician’s order, and new medical necessity documentation) for DMEPOS that are lost, destroyed, irreparably damaged, or otherwise rendered unusable. DMEPOS suppliers must still provide a narrative description about why the equipment must be replaced. IV. Practitioner Licensure, Provider Enrollment, Appeals, and Medicaid/CHIP Waivers CMS has provided a specific fact sheet describing the waivers and flexibilities available for physicians and other clinicians, available here. The Blanket Waivers are intended to ease the burden on the health system in order to allow providers to focus on patient care. To that end, CMS is temporarily waiving the Medicare reimbursement requirements that out-of-state practitioners be licensed in the state in which they are providing services when they are licensed in another state when the following four conditions are met: The practitioner must be enrolled in Medicare; The practitioner must have a valid license to practice in the state which relates to his or her Medicare enrollment; The services must be furnished, whether in-person or remote via telehealth, in a state in which the emergency is occurring in order to contribute to relief efforts in his or her professional capacity; and The practitioner must not be excluded in any state that is part of the PHE. Please note that the foregoing Medicare reimbursement waiver for licensure does not waive state or local licensure requirements. As a result, providers must review the state licensure requirements in each jurisdiction prior to delivering telehealth to patients in that location. Please see the blog post we published on this topic of telehealth opportunities here. Additionally, CMS has taken a number of steps to ease the provider enrollment requirements. See here for additional information from CMS on provider enrollment relief, as well as our previous blog post on this topic, available here. CMS has set up a hotline for physicians and non-physician practitioners to enroll and receive temporary Medicare billing privileges. Additionally, CMS has taken the following steps to facilitate the enrollment of providers in the wake of the COVID-19 outbreak, including: Waiver of certain screening requirements, including application fees, background checks, and site visits; Postponement of revalidation actions; Allowing licensed providers to render services outside their state of enrollment;  Expediting pending or new applications;  Easing telehealth restrictions; and Allowing physicians and non-physician practitioners to terminate opt-out status early and enroll in Medicare. Regarding appeals, the new waivers grant broad powers to MACs, QICs, and IREs to relax the requirements of federal regulations regarding the appeals process in FFS, and Parts C and D. MACs, QIEs, and IREs are instructed to allow extensions to file an appeal and to permit the waiver of requests for timeliness requirements for additional information to adjudicate appeals. MACs, QICs, and IREs are now allowed to process an appeal even with incomplete Appointment of Representation forms as outlined in federal regulations. Additionally, MACs, QICs, and IREs can now process appeals that do not meet the required elements of those same federal regulations. MACs, QICs, and IREs are given broad flexibility with respect to other parts of the appeals process so long as good cause requirements are satisfied. Finally, regarding Medicaid and CHIP, the new waivers permit states to request approval that certain statutes and implementing regulations be waived under section 1135. To request such an approval, states may submit an 1135 waiver request directly to their Center for Medicaid and CHIP Services (CMCS) state lead or Jackie Glaze, Acting Director, Medicaid and CHIP Operations Group, Center for Medicaid and CHIP Services at CMS by e-mail (Jackie.Glaze@cms.hhs.gov) or by letter. CMS sets forth a number of examples of the kinds of requests that states can make under this waiver, including: Waiver of prior authorization requirements for FFS programs; Waiver of out-of-state requirements for providers to provide care to another state’s Medicaid enrollees impacted by COVID-19; Temporary suspension of provider enrollment and revalidation requirements to increase access to care; Temporary waiver of state licensure requirements; Temporary suspension of requirements for pre-admission and annual screening requirements for nursing home residents. CMS encourages states to assess their needs and take advantage of these waivers. To assist states with the waiver request process and provide additional guidance, CMS released the Medicaid and CHIP Disaster Response Toolkit, which can be found here. Further, the CMS Coronavirus Waivers & Flexibilities website, here, contains a link to each state’s request for waivers and the responses from CMS. V. Stark Waivers On the same date, CMS also issued much-anticipated Blanket Waivers of sanctions under the federal physician self-referral law, or “Stark Law,” for “COVID-19 Purposes.” These Blanket Waivers are set forth here. Please see our separate post, available here, with detailed information about these Stark Law Blanket Waivers. * * * If you have questions about the new CMS waivers, please contact the authors or your regular Dorsey & Whitney LLP attorney. Dorsey is closely monitoring the rapidly evolving legal landscape related to the COVID-19 pandemic. You can access Dorsey’s health law blog related to health law updates, available here. You can also access Dorsey’s coronavirus resource center, which contains a wide variety of legal resources related to the coronavirus outbreak, available here.

The COIVD-19 pandemic is placing new and unprecedented demands on both taxable and tax-exempt employers and their employees. One option many employers may not have previously considered is the use of a tax-exempt employee assistance fund. Depending on the structure of the fund, declaration of qualified disaster is an important requirement for the fund to issue financial assistance to individuals. Although the Internal Revenue Service (“IRS”) has yet to issue official guidance confirming the COVID-19 pandemic as a “qualified disaster” under Section 139 of the Internal Revenue Code (the “Code”), the President declared a national emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (“Stafford Act”) due to extraordinary circumstances resulting from COVID-19. A qualified disaster relief payment is defined under Section 139(c)(2) of the Code to include a federally declared disaster as defined by Section 165(i)(5)(A) of the Code, which defines the term as any disaster subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Stafford Act. If employers do not already have an established employee assistance fund, deciding and implementing the most beneficial structure during a crisis can seem daunting. We have experience forming and implementing employee assistance funds, and quickly and efficiently navigating the application for tax-exempt status with the IRS. Below is an overview of issues employers should consider when contemplating a new employee assistance fund program. What is an employee assistance fund? The term employee assistance fund (“EAF”) is generally used to describe several types of employer-sponsored Section 501(c)(3) (all subsequent references to “Section” shall mean Sections of the Code) charitable tax-exempt organizations designed to provide emergency, need-based financial assistance to an employer’s work force in the event of disaster or personal hardship impacting individual employees or their families. EAFs are typically structured as a public charity, a donor advised fund, or a private foundation. A Section 501(c)(3) EAF must serve a charitable class, which must be large enough or sufficiently indefinite that the community as a whole, rather than a pre-selected group of people, benefits from the EAF grants. EAFs may restrict benefits to a certain company’s employees and still serve a charitable class so long as the EAF’s assistance policy is open-ended and include employees affected by any current or future disasters or emergencies. What are the distinguishing characteristics of an EAF structured as a public charity? An EAF established as a public charity described in Sections 509(a)(1) and 170(b)(1)(A)(vi) receives its funding primarily through donations from the general public, usually through donations from the company’s individual employees. A public charity EAF can provide financial assistance in response to any type of disaster or employee emergency hardship, so long as the related employer does not control the organization. Generally, these requirements are met when non-executive (i.e., rank and file) employees comprise a significant portion of both the board of directors and the committee that selects eligible individuals for need-based distributions from the EAF. Unlike a donor advised fund or a private foundation, a public charity EAF can provide assistance to eligible individuals in response to any type of disaster or employee emergency hardship situation. What are the distinguishing characteristics of an EAF structured as a donor advised fund? A donor advised fund is a community foundation-type of organization that maintains separate funds or accounts on behalf of individual or corporate donors. The donors then receive advisory privileges over the distribution of the donated funds, but such distributions must still be made for charitable purposes. While a donor advised fund is usually classified as a public charity, important distinctions for donor advised EAFs are subject to additional restrictions. Typically, a donor advised fund (whether or not an EAF) cannot make grants to individual persons. However, a donor advised EAF can make grants to individual employees and their family members if: the EAF makes need-based distributions adequately documented by the EAF; the EAF’s sole purpose is to provide relief after a qualified disaster as defined in Section 139; and eligible recipients are selected by a committee independent from the sponsoring employer. What are the distinguishing characteristics of an EAF structured as a private foundation? EAFs structured as private foundations are typically funded solely through donations by an employer, and not by contributions from individual employees or the general public. Like the donor advised EAFs, an EAF structured as a private foundation may only provide need-based assistance to employees or family members impacted by a qualified disaster as defined in Section 139. Also, the private foundation EAF’s selection committee must be independent from the employer, and payments to or for the benefit of individuals who are directors, officers, or trustees of the private foundation may subject the foundation to the self-dealing rules under Section 4941. Are payments from an EAF taxable to the individual recipients? No. Payments from a Section 501(c)(3) EAF as a result of a disaster or emergency hardship are considered to be gifts and are excluded from the recipient’s gross income under Section 102. Are disaster relief payments taxable if received directly from an employer and not made through an EAF? It depends. If the payment meets the definition of a qualified disaster relief payment under Section 139 for qualified disaster expenses that are not otherwise covered by insurance or other reimbursements, such payments are not subject to income tax, self-employment tax, or other employment taxes even if made directly from an employer. Are donations to an EAF tax-deductible? If recognized by the IRS as a Section 501(c)(3) organization, donations by individuals or corporations to an EAF may eligible as a deduction as a charitable contribution under Section 170. Changes included in the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) includes expanded Section 170 deductions for both individuals (itemizers and non-itemizers) and corporations. Are there restrictions on EAF payments to individuals? Yes, particularly when made by an EAF structured as a donor advised fund or a private foundation that are limited to Section 139 qualified disaster relief payments. As relevant to payments from an EAF, qualified disaster relief payments are defined in Section 139(b) to include any amount paid (regardless of the source) for the benefit of an individual: to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster; to reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster; and by a person engaged in the furnishing or sale of transportation as a common carrier by reason of the death or personal physical injuries incurred as a result of a qualified disaster. Qualified disaster relief payments do not include payments for expenses paid for by insurance or other reimbursements, or income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Can an EAF provide assistance to other businesses? It depends, but an EAF structured as a public charity likely has the most latitude to provide financial assistance to other businesses as it is not limited to qualified disaster relief-type payments. For example, a charitable organization may provide assistance to a for-profit business if the assistance is a reasonable means of accomplishing a charitable purpose (e.g., relief of the poor and distressed or lessening the burdens of government), and any benefit to private interests is incidental to the accomplishment of such charitable purpose.

With the aim of enabling providers to focus attention and resources on fighting the COVID1-19 pandemic, CMS announced over the weekend that it intends to alleviate some of Medicare participating providers' and suppliers' financial burden by expanding its Medicare accelerated and advance payment (AAP) program to a broader group of Medicare Part A providers and Part B suppliers for the duration of the public health emergency. Medicare accelerated and advance payments are typically employed for emergency funding for scenarios in which claims submissions or processing is disrupted; the announcement is at once historic and yet also wholly in scope with the scale of and disruption caused by the pandemic. The expedited payments have been employed usually during natural disasters such as tornadoes, flooding, and the like, and may also be used during a national emergency. Lawmakers are recognizing the scale and scope of what providers are facing (and will continue to face), so CMS is expanding the Medicare accelerated and advance payments program eligibility to all applicable Medicare providers and suppliers, throughout the US, during the public health emergency related to COVID-19. The payment amount will vary by applicable provider or supplier depending on what amount is requested; the payments are potentially substantial. The permitted payment amounts are based on applicants’ historical Medicare payment amount for the requested time period and as permitted by category. Most providers and suppliers may request up to 100% of their historical Medicare payment amount for a three-month period. Inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100% of their historical Medicare payment amount for a six-month period. Critical access hospitals may request up to 125% of their historical Medicare payment amount for a six-month period. In addition, CMS has extended the repayment date to begin 120 days after the payment is issued; the timeline for repayment again varies by organization type but is not less than 210 days. Providers and suppliers interested in seeking these payments may request the appropriate specific amount using the Accelerated or Advance Payment Request form provided on your Medicare Administrative Contractor’s (MAC’s) website. For example, the MAC, WPS, has recently updated its AAP application form, available here, which can simply be e-mailed to WPS at the email address located at the bottom of the one-page application. In order to be able to qualify for this expansion, a few conditions apply, and are worth double-checking as to whether any of these are true of your organization. The requesting providers or suppliers: Must have billed Medicare for claims within 180 days immediately prior to the date of signature on the provider’s/supplier’s request form; Must not be in bankruptcy proceedings, nor be under active medical review or program integrity investigation; and Must not have any outstanding delinquent Medicare overpayments. If any of the above conditions apply, then your organization would not be eligible to apply under this COVID-specific expansion. This expansion of the AAP program takes effect immediately, and CMS aims to issue payments within seven days of a request. Details about reconciliation and recoupment, as well as instructions as to how to apply, may be found in the CMS fact sheet found here. If you have any questions about the announcement or the application process, please contact the author(s) or your regular Dorsey attorney or Dorsey Health Strategies consultant.

On March 27, 2020, the President signed into law the “Coronavirus Aid, Relief, and Economic Security Act’’ (“CARES Act”). The CARES Act is the third phase of the federal government’s response to the coronavirus following two other laws to support American families and address health sector needs that were approved on March 6, 2020 (Phase I here) and March 18, 2020 (Phase II here). The CARES Act includes provisions which provide cash payments and other resources to help individuals, small businesses, state and local governments and hospitals/healthcare providers. The CARES Act includes four sections (called “Titles”) and each title addresses a different topic. This e-update summarizes Title III of the CARES Act titled “Supporting America’s Health Care System in the Fight Against the Coronavirus”. Title III provides much needed financial assistance to the health care industry, as well as additional guidance and other provisions which provide information on waivers and other benefits to help hospitals and others who are on the front lines of fighting the COVID-19 pandemic. The following is a summary of the major provisions of Title III, organized in order by section numbers under the CARES Act but does not address subtitle B – Education Provisions and subtitle C – Labor Provisions. We will provide links to summaries of other provisions in the CARES Act prepared by our colleagues throughout the firm as they become available. Click here to read the summary.

CMS announced today (with the details found here in its answers to Frequently Asked Questions) that in acknowledgment of the extreme circumstances posed by COVID-19, it will exercise enforcement discretion with respect to any Physician Payments Sunshine Act Open Payments reporting that is submitted after the March 31, 2020 deadline. CMS explained that while it does not have authority to delay the submission deadline (since that deadline is set by federal statute), CMS is sensitive to the challenges caused by the COVID-19 pandemic, and will exercise enforcement discretion by considering the impact of these circumstances on an entity’s ability to submit the information on time. Entities that submit data after the deadline should include the phrase “COVID-19 Impact” in an assumption statement along with the explanation about their COVID-19-related circumstances. If you have any questions about this year’s Open Payments reporting or how to submit data, please contact the author or your regular Dorsey attorney or Dorsey Health Strategies consultant.

On Monday, March 23, 2020, the Center for Medicare and Medicaid Services (“CMS”) released Frequently Asked Questions on Medicare Provider Enrollment Relief related to COVID-19 (“FAQs”), available here. The recent Public Health Emergency declaration by the Secretary of the Department of Health and Human Services provided a broad 1135 waiver on enrollment screening requirements, application fees, criminal background checks, site visits, and certain licensure requirements. The FAQs provided guidance to providers on how CMS is exercising its authority under the 1135 waiver and on how to navigate enrollment during this emergency period. Expedited Enrollment; Revalidation Included in the FAQs were toll-free hotlines available to provide expedited enrollment. The applicable Medicare Administrative Contractor has the authority to screen and enroll physician and non-physician practitioners in Medicare on a temporary basis telephonically, and, if approved, to provide follow-up documentation of such approval. The effective date of the physician or non-physician practitioner’s billing privileges may be as early as March 1, 2020. Upon the lifting of the Public Health Emergency declaration, those who received temporary billing privileges through the expedited process will be asked to resubmit through the appropriate CMS-855 application. Note that this expedited telephonic enrollment process is only for physician and non-physician practitioners; all other providers and suppliers, including DMEPOS suppliers, must enroll and submit changes of information via the traditional CMS-855 application. Those applications will be expedited if received after March 1, 2020 with processing times of 7 business days for web applications and 14 business days for paper applications. Any applications received prior to March 1, 2020 are being processed in accordance with existing timelines; web applications processed within 45 days and paper applications processed within 60 days. CMS is temporarily ceasing revalidation efforts for all Medicare providers or suppliers. Upon the lifting of the Public Health Emergency, CMS will resume revalidation activities. CMS also is currently postponing DME accreditation and reaccreditation timetables and deadlines. A DME supplier should still comply with accreditation requirements; however, formal accreditation from an accrediting organization will be postponed. CMS still plans to monitor billing activity during the emergency period. Licensure The FAQs clarified that, although the 1135 waiver allowed CMS to waive, on an individual basis, the Medicare requirement that a physician or non-physician practitioner must be licensed in the state in which he or she is practicing, the waiver is not available unless all of the following four conditions are met: 1) the physician or non-physician practitioner must be enrolled in Medicare; 2) the physician or non-physician practitioner must possess a valid license to practice in the state which relates to his or her Medicare enrollment; 3) the physician or non-physician practitioner is furnishing services – whether in-person or via telehealth – in a state in which the emergency is occurring in order to contribute to relief efforts in his or her professional capacity; and 4) the physician or non-physician practitioner is not affirmatively excluded from practice in the state or any other state that is part of the 1135 emergency area. CMS clarified that the 1135 waiver does not have the effect of waiving state or local licensure requirements or any requirement specified by a state or a local government as a condition for waiving its licensure requirements. Those separate state requirements would continue to apply unless waived by the state. If you have any questions about this alert please contact the author or your regular Dorsey attorney.

The Dorsey Health Law blog team keeps readers up-to-date on relevant topics in the health care industry. In order to do so, the members of the blog team communicate regularly with other practice groups within the firm for applicable updates from client publications. For this post, we would like to thank Dorsey’s Jillian Kornblatt and Anabel Cassady for the linked article: FFCRA Employment Benefit Exclusions for Health Care Providers and Emergency Responders

The Dorsey Health Law blog team keeps readers up-to-date on relevant topics in the health care industry. In order to do so, the members of the blog team communicate regularly with other practice groups within the firm for applicable updates from client publications. For this post, we would like to thank Dorsey’s Scott Goldsmith for the linked article: FCC Narrows the TCPA's Emergency Purpose Exception Amid Pandemic While Greenlighting Certain Emergency Messages by Hospitals, Health Care Providers, and Government

Since the COVID-19 outbreak, many health care providers have had a myriad of HIPAA questions, including questions about whether they can share some types of information and, if so, the type of information they can share with first responders who may have been exposed. Today, the Office for Civil Rights (OCR) published guidance outlining the already-existing HIPAA provisions that permit health care providers to share the name or other identifying information of an individual who has been infected with or exposed to the virus, with paramedics, other first responders, law enforcement and public health authorities, available here. The guidance addresses some of the most relevant disclosures that are allowed under HIPAA without the individual’s authorization: when needed for treatment, when required by law to notify a public health authority when necessary to prevent or lessen a serious and imminent threat to the health and safety of a person of the public, and when responding to a request by a correctional institution or law enforcement official that has custody of an inmate or other individual. As a reminder, except for disclosures that are required by law or disclosures for treatment purposes, health care providers are required to make reasonable efforts to limit the information to that which is “minimum necessary” to accomplish the purpose of the disclosure. The OCR also provided a couple of helpful examples that will be relevant to health care providers in the coming days.  Here is one of them: “Example: A covered entity, such as a hospital, may provide a list of the names and addresses of all individuals it knows to have tested positive, or received treatment, for COVID-19 to an EMS dispatch for use on a per-call basis. The EMS dispatch (even if it is a covered entity) would be allowed to use information on the list to inform EMS personnel who are responding to any particular emergency call so that they can take extra precautions or use personal protective equipment (PPE). Discussion: Under this example, a covered entity should not post the contents of such a list publicly, such as on a website or through distribution to the media. A covered entity under this example also should not distribute compiled lists of individuals to EMS personnel, and instead should disclose only an individual’s information on a per-call basis. Sharing the lists or disclosing the contents publicly would not ordinarily constitute the minimum necessary to accomplish the purpose of the disclosure (i.e., protecting the health and safety of the first responders from infectious disease for each particular call).” Additional articles about the application of HIPAA during the COVID-19 outbreak, and other legal resources applicable to the COVID-19 outbreak are available here and here.  Please contact the author or your regular Dorsey attorney with any questions about this guidance.  

As the number of COVID-19 cases increases exponentially, healthcare providers in the United States are bracing for an unmanageable number of critically ill patients.  While it is impossible to predict to what extent the virus will overwhelm hospitals in the U.S., Italy foretells a realistic and grim scenario.  In early March, the Italian College of Anesthesia, Analgesia, Resuscitation and Intensive Care published guidelines educating Italian physicians on how to conduct “disaster medicine” triage—an approach that recognizes the potential need to base triage decisions on which patients are most likely to survive, and prioritizing treatment for those patients.  Traditional disaster medicine or “wartime” triage can result in the denial of medical care for patients with preexisting health conditions or patients above a certain age. The collective hope is that the COVID-19 pandemic never requires hospitals in the U.S. to adopt disaster medicine triage practices.  If it does, healthcare providers will be forced to make triage decisions they have never faced before, and certain patients will succumb to the virus after seeking—and being denied—complete medical care. By its nature, wartime triage (or some variant thereof) will also mean modified rules for a new world.  What may normally be considered medical malpractice will become acceptable under the exigent conditions of the pandemic.  The applicable standard of care, which necessarily turns on the unique circumstances of the situation at hand, will shift, and providers’ actions will be analyzed within the prism of an unprecedented state of emergency.  See, e.g., Estate ex rel. Campbell v. Calhoun Health Servs., 66 So. 3d 129 (Miss. 2011) (applicable standard of care may take into account mass casualty situation in the emergency room). Stated differently, providers will not be held to the standard of care applicable in a normal emergency room setting, but instead a unique disaster medicine standard that will grant far more latitude to physicians.  That standard, however, is not yet clear.  Physicians may reasonably disagree on what constitutes the best patient care in wartime or mass casualty triage situations.  The issue is extremely complex and there is no obvious “right” approach at this time. The unique features of COVID-19 itself may also impact potential medical malpractice claims.  There is no current cure for COVID-19, so while physicians can treat the symptoms, they cannot yet address the underlying cause.  As a result, it will be difficult for any potential plaintiff to establish definitively that admission to a hospital or access to a ventilator would have prevented the patient’s death.  Absent evidence that the patient’s death was primarily caused by a provider’s decision, rather than COVID-19 and/or other contributing factors, medical malpractice claims will fail. That said, extenuating circumstances do not always deter medical malpractice plaintiffs.  See, e.g., LaCoste v. Pendleton Methodist Hosp., LLC, 966 So. 2d 519 (La. 2007) (plaintiffs pursued medical malpractice claims against a New Orleans hospital for wrongful death arising from facility deficiencies related to Hurricane Katrina); Husband v. Tenet HealthSystems Mem. Med. Ctr., Inc., 16 So. 3d 1220 (La. Ct. App. 2009) (wrongful death class action against hospital and providers involved in care during Hurricane Katrina). Therefore, in order to protect physicians who may end up in uncharted waters, and to ensure the best patient care possible in difficult circumstances, healthcare providers may want to prepare for the possibility of wartime triage.  Some potential steps include: Establishing clear policies and guidelines that govern the implementation and application of disaster triage practices. These guidelines could be adaptations of mass casualty incident plans that are more specifically tailored to COVID-19.  The goal is to provide guidance appropriate to the facility and the circumstances so that providers do not need to make ad hoc decisions on their own.  Once established, hospitals may also need to reassess the guidelines as the situation develops. Ensuring that all providers are familiar with evolving guidelines and fully understand the decision-making criteria. Extensive training and simulations may not be feasible, but basic knowledge of the guidelines will help keep care consistent. Emphasizing the need for proper documentation of all care decisions. While maintaining medical records will not seem like a priority in the chaos and tumult of an overflowing emergency department, good documentation will be critical to providing quality care and important for the defense of any future medical malpractice claim. Remaining attuned to the publication of national guidelines and the adoption of local laws that may provide limited liability protections during crises. Existing triage guidelines may help hospitals establish their own framework for handling disaster triage decisions. At this moment, healthcare providers should be focused on patient care and their own health and well-being, not potential legal liability.  But specific planning for the potential need for disaster medicine triage can provide comfort, consistency and protection for patients and providers on the front line.

In light of the COVID-19 pandemic, the Food and Drug Administration (“FDA”) issued recent non-binding guidance (“Guidance”) on the conduct of ongoing clinical trials of medical products. The FDA acknowledges that the public health emergency may result in unavoidable protocol modifications and/or deviations. Quarantines, site closures, travel limitations, interruptions in the supply chain for the investigational product, and infection of site personnel and trial subjects can all disrupt  protocol-specified procedures, such as mandatory visits, administration of the investigational product, or laboratory testing.  The Guidance provides FDA’s thinking on how sponsors, clinical investigators, and Institutional Review Boards/Independent Ethics Committees (“IRBs”) should, notwithstanding the current challenges, approach trial participant safety, compliance with good clinical practices (GCP) and risks to trial integrity. Highlights from the Guidelines include: Trial Participant Safety It is clear that for each changed circumstance necessitated by the COVID-19 emergency, trial sponsors (together with investigators and IRBs) should first consider the impact on participant safety.  Decisions regarding continued participant recruitment, continued use of an investigational product, changing patient monitoring practices, discontinuing the trial, or other modifications should be considered with trial participant safety as the paramount factor. FDA considers it critical that trial participants be informed of all changes that could impact them. Participants may not be able to travel to investigational sites for protocol-mandated visits.  Sponsors should evaluate whether alternative methods for safety assessments, such as delayed patient visits, phone calls, or virtual visits, are sufficient to assure trial participant safety. If any trial participants are unable to access the investigational product or the investigational site, they may need additional safety monitoring. Sponsors may also consider whether there are alternative means to administer the investigational product when scheduled site visits are impracticable.  However, FDA states that regulatory requirements regarding investigational product accountability remain in effect and should be addressed and documented. COVID-19 Screening; Changes to Study Protocol The FDA states that COVID-19 screening procedures mandated by the investigational site do not need to be reported as an amendment to the protocol (even if performed during clinical study visits), unless the sponsor is incorporating the data collected as part of a new research objective. In addition, although sponsors are encouraged to engage with IRBs as soon as possible about urgent or emergent protocol changes, such changes to study protocols or informed consent as a result of COVID-19 that are intended to minimize or eliminate immediate hazards or to protect the life and well-being of trial participants may be implemented without IRB approval or amendment, or before filing an IND or IDE with FDA, but must be reported after such implementation. Documenting and Analyzing Study Changes and Impact In addition to trial participant safety, the other key takeaway from the Guidance is that FDA expects sponsors to document and explain all efforts to minimize the impact of any protocol modifications or deviations on the safety of trial participants and study data integrity.  This documentation should include: (1) what contingency measures were implemented to manage study conduct (including their duration and how they were necessitated by COVID-19); (2) a listing of all affected participants by unique study identifier, and a description of how the individual’s participation was affected; and (3) analysis and discussions addressing the impact of such contingency measures on the safety and efficacy results reported for the study. Importantly, if there are missed visits, changes in visit schedules, or other facts that result in missing information, then each affected case report form should include specific information that explains the missing data and its relationship to COVID-19.  This information should also be summarized in the clinical study report. If changes in the study protocol lead to changes to efficacy assessment methods, amendments in data management or statistical analysis plans, the FDA requests that the sponsor consult with the applicable FDA review division. The FDA states that sponsors, investigators, and IRBs should all consider adopting policies and procedures (or revisions to existing policies) to address potential disruption as a result of COVID-19. The FDA provided examples of potential changes: impact on the informed consent process, study visits and procedures, data collection, study monitoring, adverse event reporting, changes to investigations, site staff, and monitoring resulting from regional or nationally imposed travel restrictions or quarantine measures or illness. Depending on the nature of revisions to the policies and procedures, applicable regulations may require a protocol amendment. Undoubtedly, the current public health emergency will impact ongoing clinical trials.  The extent and nature of that impact will vary depending on the trial, the investigational product, the disease being studied in the trial, the ability to conduct safety monitoring, and other factors.  The FDA recognizes these facts, and the Guidance stresses two fundamental points.  First, all trial activity, and each modification or deviation to a trial protocol, should be assessed with trial participant safety as the principal consideration.  Second, all changes necessitated by COVID-19 should be carefully documented and analyzed in the clinical trial report to explain their connection to COVID-19 and their impact on participant safety and trial data integrity. A copy of the full guidance issued by the FDA can be found at: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/fda-guidance-conduct-clinical-trials-medical-products-during-covid-19-pandemic If you have further questions, please contact the authors or any member of Dorsey & Whitney’s health care transactions and regulations practice group.

On March 9, 2020, the Centers for Medicare and Medicaid Services (“CMS”) Quality, Safety and Oversight Group (“QSO”) issued a memorandum, QSO-20-15, providing guidance to health care providers related to the Emergency Medical Treatment and Labor Act (“EMTALA”) implications regarding the COVID-19 pandemic. EMTALA is a Federal law that requires all Medicare-participating hospitals (including critical access hospitals (“CAHs”)) with dedicated emergency departments (“EDs”) to perform an appropriate medical screening exam (“MSE”) for all individuals who come to their EDs to determine if the individual has an emergency medical condition (“EMC”), regardless of their ability to pay.  If there is no EMC, the hospital’s EMTALA obligations end.  If there is an EMC, the hospital must treat and stabilize the EMC within its capability or transfer the individual to a hospital that has the capability and capacity to stabilize the EMC. Hospitals with specialized capabilities may not refuse an appropriate transfer under EMTALA if they have the capacity to treat the transferred individual. In the wake of the COVID-19 pandemic, many hospital EDs are under increased strain due to an influx of patients with suspected or confirmed cases of COVID-19.  Hospitals are concerned not only about their ability to handle this unprecedented increase in ED patients but also about their ability to minimize the risk of exposure of COVID-19 to other ED patients as well as healthcare workers.  CMS released their guidance to address these concerns and to remind hospitals of their EMTALA obligations during the COVID-19 pandemic. On March 13, 2020, the Secretary of the U.S. Department of Health And Human Services (“HHS”) waived certain EMTALA requirements following President Trump’s declaration that the COVID-19 pandemic constitutes a national emergency. The HHS waiver specially waives sanctions for the “direction or relocation of an individual to another location to receive medical screening pursuant to an appropriate state emergency preparedness plan or for the transfer of an individual who has not been stabilized if the transfer is necessitated by the circumstances of the declared Federal public health emergency for the COVID-19 pandemic.” Below is a FAQ of the guidance for Medicare-participating hospitals (including CAHs) issued by CMS as well as a summary of the EMTALA waivers issued by HHS. What do the screening, stabilization, and transfer requirements for hospitals under EMTALA look like in light of the implications of COVID-19? Generally speaking, Medicare-participating hospitals must, at a minimum, (1) provide a MSE to every individual who comes to the ED for examination or treatment for a medical condition to determine if they have an EMC (an EMC is present when there are acute symptoms of sufficient severity such that the absence of immediate medical attention could reasonably be expected to result in serious impairment or dysfunction); (2) provide necessary stabilizing treatment for individuals with an EMC within the hospital’s capability and capacity; and (3) provide for transfers of individuals with EMCs, when appropriate. Every hospital with a dedicated ED is required to conduct an appropriate MSE for all individuals who come to the ED, including individuals who are suspected of having COVID-19, regardless of whether they arrive by ambulance or are walk-ins, unless an EMTALA waiver applies (see FAQ #7 below). Every ED is expected to have the capability to apply appropriate COVID-19 screening criteria when applicable, to immediately identify and isolate individuals who meet the screening criteria to be a potential COVID-19 patient, and to contact their state or local public health officials to determine next steps. Is my hospital required to accept transfers of patients with suspected or confirmed cases of COVID-19 from small or rural hospitals that do not have appropriate or sufficient isolation facilities or equipment? Yes.  If your hospital has the capacity and the specialized capabilities needed for stabilizing treatment, then you are required to accept appropriate transfers from hospitals without such capacity and capabilities.  Hospitals should continue to coordinate with state and local public health officials regarding placement of individuals who meet COVID-19 assessment criteria and the most current standards of practice for treating COVID-19 as this situation continues to develop. The situation continues to change on a near-hourly basis. How will CMS determine whether an EMTALA violation has occurred? CMS has stated they will evaluate the capabilities and capacity of both the referring and recipient hospitals to determine whether a violation has occurred.  Because of the dynamic situation, this evaluation would include the recommendations of the Centers for Disease Control and Prevention (“CDC”) at the time the suspected violation occurred.  At the time of this writing, the CDC’s recommendations focus on factors such as the individual’s recent travel, exposure history, and presenting signs and symptoms in differentiating the types of capabilities hospitals should have to screen and treat individuals who have or may have COVID-19.  See the CDC website for the most current infection prevention and control recommendations for hospital patients with suspected or known cases of COVID-19 (https://www.cdc.gov/coronavirus/2019-ncov/hcp/clinical-guidance-management-patients.html). All hospitals are required to accept appropriate transfers of individuals with EMCs if the hospital has the specialized capabilities an individual requires for stabilization and the capacity to treat these individuals. This obligation applies regardless of whether the hospital has a dedicated ED. What are the requirements for alternative screening sites our hospital sets up on campus? Hospitals may set up alternative screening sites on campus.  CMS highlights that the MSE does not have to take place in the ED. A hospital may set up alternative sites on its campus to perform MSEs.  Individuals may be redirected to these sites after being logged in. The redirection and logging in can even take place outside the entrance to the ED.  The person doing the directing should be qualified (e.g., an RN) to recognize individuals who are in need of immediate treatment in the ED.  The content of the MSE varies according to the individual’s presenting signs and symptoms. It can be as simple or as complex, as needed, to determine if an EMC exists.  MSEs must be conducted by qualified personnel, which may include physicians, nurse practitioners, physician’s assistants, or RNs trained to perform MSEs and acting within the scope of their State Practice Act. Finally, the hospital must provide stabilizing treatment (or appropriate transfer) to individuals found to have an EMC, including moving them as needed from the alternative site to another on-campus department. What are the requirements for alternative screening sites our hospital sets up off campus? Hospitals may set up screening at off-campus, hospital-controlled sites.  CMS guidance states that hospitals and community officials may encourage the public to go to these sites instead of the hospital for screening for influenza-like illness (“ILI”).  However, a hospital may not tell individuals who have already come to its ED to go to the off-site location for the MSE unless it is done pursuant to a state emergency preparedness plan. Unless the off-campus site is already a dedicated ED (“DED”) of the hospital, as defined under EMTALA regulations, EMTALA requirements do not apply. The hospital should not hold the site out to the public as a place that provides care for EMCs in general on an urgent, unscheduled basis. They can, however, hold it out as an ILI screening center.  The off-campus site should be staffed with medical personnel appropriately trained to evaluate individuals with ILIs. If an individual needs additional medical attention on an emergent basis, the hospital is required, under the Medicare Conditions of Participation, to arrange referral/transfer. Prior coordination with local emergency medical services is advised to develop transport arrangements. What if a screening suggests possible COVID-19? If an individual “comes to the emergency department” (as defined at 42 C.F.R. § 489.24(b)), the hospital must provide that individual with an appropriate MSE.  It is a violation of EMTALA for hospitals with EDs to use signage that presents barriers to individuals suspected of having COVID-19 from coming to the ED.  However, use of signage to direct individuals to alternative screening locations on campus would be acceptable. If, consistent with applicable standards for COVID-19 screening, a hospital determines an individual who has come to the ED may have COVID-19, the hospital is expected to isolate the patient immediately and coordinate with their state or local public health officials.  CMS expects all hospitals to, within their capability, provide MSEs and initiate stabilizing treatment while maintaining isolation in accordance with COVID-19 standards of practice. How do the EMTALA waivers relating to the COVID-19 outbreak change my hospital’s obligations under EMTALA? On March 13, 2020, the Secretary of HHS waived certain EMTALA requirements following the President’s declaration that the COVID-19 pandemic constitutes a national emergency. The HHS waiver specially waives sanctions for the “direction or relocation of an individual to another location to receive medical screening pursuant to an appropriate state emergency preparedness plan or for the transfer of an individual who has not been stabilized if the transfer is necessitated by the circumstances of the declared Federal public health emergency for the COVID-19 pandemic.” The new EMTALA waiver permits a hospital to (1) redirect an individual to another location — including another hospital — to receive an MSE without first performing an MSE at the hospital if it is done pursuant to a state emergency preparedness plan, or (2) transfer an individual who has not yet been stabilized to another location if such actions are necessary and the result of circumstances due to the COVID-19 pandemic. HHS makes clear that the EMTALA waivers do not apply to any actions taken by a hospital that discriminate against individuals on the basis of their source of payment or ability to pay. The EMTALA waiver under Section 1135 does not appear to be a blanket waiver, so providers wishing to use the waiver may require “case-by-case” requests and approvals from your CMS Regional Office. “ The waiver is retroactively effective back to March 1, 2020 and will remain in effect for the duration of the national emergency period, unless terminated sooner.