Top 5 CMS provisions providing flexibilities to Medicare and Medicaid regulations during the COVID-19 public health emergency

• On March 30, CMS issued an interim final rule with comment period (IFC) that for the duration of the COVID-19 public health emergency reinterprets regulations related to telehealth, physician supervision, site of service and other regulatory requirements, giving providers more flexibility during the pandemic.
• CMS changed its under arrangements policy during the public health emergency for the COVID-19 pandemic so that hospitals are allowed broader flexibilities to furnish inpatient services, including routine services outside the hospital.
• HFMA published a detailed summary of the CMS interim final rule, which is available here.

On March 30, CMS issued an interim final rule that for the duration of the COVID-19 public health emergency (PHE) offers providers flexibility by reinterpreting regulations related to telehealth, physician supervision, site of service and other regulatory requirements.

The PHE was determined to exist nationwide by the Secretary of Health and Human services under section 319 of the Public Health Service Act on January 31, 2020, as a result of confirmed cases of COVID-19 and will include any subsequent renewals.

CMS believes that providing additional flexibilities to Medicare and Medicaid regulations will help providers combat the COVID-19 pandemic. Below is a summary of the five most significant provisions for hospitals and physicians.

1. Allows inpatient hospital services furnished under arrangements outside the hospital: CMS is changing its under arrangements policy during the PHE for the COVID-19 pandemic so that hospitals are allowed broader flexibilities to furnish inpatient services, including routine services outside the hospital. Effective 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.

Under this change, hospitals will be able to transfer patients to outside facilities, such as ambulatory surgery centers, inpatient rehabilitation hospitals, hotels and dormitories, while still receiving hospital payments under Medicare. An example cited in CMS’s press release envisions a healthcare system using a hotel to take care of patients needing less intensive care while using its inpatient beds for COVID-19 patients. 

The rule emphasizes that hospitals will still need to continue to exercise sufficient control and responsibility over the use of hospital resources in treating patients regardless of whether that treatment occurs in the hospital or outside the hospital under arrangements. 

2. Clarifies that telehealth visits will be paid as in-person services: CMS’s initial press release related to the temporary expansion of Medicare coverage for telehealth services stated that virtual visits will be paid a the same rate as in-office visits. However, the associated billing FAQ stated to continue using Place of Service (POS) code 02, which triggers a lower payment than what is received for in-office services. The IFC addresses this issue by instructing physicians and practitioners who bill for Medicare telehealth services to report the POS code that would have been reported had the service been furnished in person instead of POS code 02.

3. Waives telehealth cost sharing: The Office of Inspector General (OIG) issued a policy statement to notify physicians and other practitioners that they will not be subject to administrative sanctions for reducing or waiving any cost-sharing obligations federal healthcare program beneficiaries may owe for telehealth services furnished consistent with the then-applicable coverage and payment rules.

4. Revises direct supervision requirements: CMS revises the definition of direct supervision to allow for the duration of the PHE direct supervision to be provided using real-time interactive audio and video technology. This change is limited to only the way the supervision requirement can be met and does not change the underlying payment or coverage policies related to the scope of Medicare benefits, including Part B drugs.

This change applies to the supervision of diagnostic services furnished directly or under arrangement in the hospital or in an on-campus or off-campus outpatient department of the hospital. The interim final rule makes similar changes to the direct supervision requirements for select services provided by residents.

5. Changes Medicare Shared Savings Program extreme and uncontrollable circumstances policy: For PY 2020 financial reconciliation, CMS will reduce the amount of an ACO’s shared losses by an amount determined by multiplying the shared losses by the percentage of the total months in the performance year affected by an extreme and uncontrollable circumstance, and the percentage of the ACO’s assigned beneficiaries who reside in an area affected by an extreme and uncontrollable circumstance. At this time, the PHE applies to all counties in the country; therefore, 100% of assigned beneficiaries for all Shared Savings Program ACOs reside in an affected area and the total months affected by an extreme and uncontrollable circumstance will begin with March and continue through the end of the current PHE.

Finally, the factors used to update ACOs’ benchmarks will reflect the national and regional trends related to spending and utilization changes during 2020, including any changes arising from the PHE for the COVID-19 pandemic.

Additionally, the IFC modifies provisions related to advancing Medicare physicians and other suppliers to conform with the guidance issued by CMS on March 28. The rule also relaxes a range of administrative activities that historically have required physician time to create capacity and allowed for telehealth services to support care in a variety of post-acute settings.

HFMA published a detailed summary of the CMS interim final rule. 

Takeaway

First, the flexibility provided in the rule is unprecedented. Some of the things like the relaxation of physician supervision requirements are things that CMS has resisted for years and suddenly overnight allowed (with good reason). The expansion of telehealth codes is … aggressive.  

Second, we’re all seen stories about hospitals expanding capacity by creating ICU beds in ASC surgical suites and acute beds in hotels. The first provision listed above provides a vehicle to allow for hospitals to bill Medicare for services provided in alternative sites of care under their provider number. The next step will be to figure out how the claim should be submitted in instances where ICU level care is provided in a contracted ASC surgical.