What This Means for COVID-19 Waivers and Funding in the Healthcare Industry
On May 11, 2023, the Department of Health and Human Services (HHS) officially ended the COVID-19 Public Health Emergency (PHE).
According to Section 319 of the Public Health Service Act, agencies and state governments are permitted to take certain emergency actions when there is a PHE. During the COVID-19 PHE, these agencies issued grants, awards, and flexibilities to healthcare providers to continue taking care of their patients during the worst parts of the pandemic. The expiration of the PHE designation has a significant impact on COVID-era funding and flexibilities hospitals, physicians, and other healthcare providers have to understand and plan for.
What healthcare flexibilities were enacted during the COVID-19 PHE?
During COVID, the federal government wanted to make healthcare more accessible and flexible during a time when public health was of a top concern for the country. Here are just a few of the changes that were enacted for this purpose:
- Allowing providers to offer telehealth services for an expanded range of healthcare services, including mental health
- Expanded health care coverage for those on Medicaid or those using insurance policies purchased through the Affordable Care Act (ACA) marketplace
- Cash funding directly to healthcare providers
- Reduced provider reporting requirements
- Eliminated or reduced quality checks
- Covered costs for COVID-19 tests, treatments, and vaccines
- Changes in services provided by and training requirements by non-physician providers
Will these flexibilities be expiring?
Now that the PHE has expired, many of these flexibilities are changing or eliminated altogether, and healthcare providers should be prepared to adjust their operational strategies and adjust their budgets accordingly. Here are some of the most notable changes for healthcare providers.
Telehealth and Home Health Services
During the PHE, the federal government and many states increased access to healthcare by changing how telehealth and home health services were reimbursed. For example, during the PHE, practitioners could bill at a higher rate for telehealth than in the past, and Medicare began covering telehealth for behavior health visits. Currently, lawmakers are looking for ways they can extend these policies, and some are even arguing to make them permanent. But until official laws and regulations are finalized, healthcare providers are in limbo. Providers should consult with their legal teams and accountants about their go-to market strategy .
Healthcare Coverage
During the PHE, the federal government required states participating in federal covid assistance to have continuous enrollment conditions for Medicaid. Although the Consolidated Appropriations Act (CAA) of 2023 unlinked these continuous enrollment requirements from the expiring PHE, this requirement is set to end on March 31, 2023. This means that as of April 1, 2023, many individuals could lose Medicaid coverage if they no longer qualify under their state’s enrollment conditions.
To help improve access to coverage, the Centers for Medicare and Medicaid Services (CMS) allows beneficiaries who are no longer eligible for Medicare coverage to transition into an ACA-approved plan, even if it is outside of the annual enrollment period. This unwinding period is typically 12 months, which gives states the opportunity to educate individuals on how they can prove eligibility for Medicaid under the non-PHE rules, or how they can find alternate coverage, like with an employer’s plan or through the ACA Marketplace.
Affordability of Coverage
During the PHE, healthcare was made more affordable through federal subsidies for individuals seeking insurance through the ACA. Despite the expiration of this benefit under the PHE coverage, the Biden administration extended COVID-era ACA subsidies through the year 2025 under the Inflation Reduction Act.
Financial Relief for Providers
Providers and hospitals were eligible for many different relief packages during the PHE, including the Provider Relief Fund, the Paycheck Protection Program, the COVID-19 Accelerated and Advance Payments Program, the New COVID-19 Treatment Add-on Payment, and others. However, the applications for these programs closed and funds were depleted even before expiration of the PHE.
While CMS does have a few programs still in effect that benefit hospitals and clinicians in 2023, the waivers that were in place during the PHE are set to expire at the end of 2023. This means that program participants will likely be subject to full program requirements beginning in 2024.
Medicare and Medicaid Coverage for COVID-19-Specific Policies
COVID-19-specific coverage is changing with the end of the PHE. Costs incurred for at home diagnostic tests and monoclonal antibody treatments may not be covered under all federal and state programs and reimbursement policies may vary across programs.
Hospitals, physicians’ offices, and others in the healthcare industry will need to take a close look at the allowances that were given at the beginning of the pandemic to see what is changing. With the expiration of the PHE, providers may have to adjust what services are offered, what amounts are reimbursable, how treatments are scheduled, and how to best meet the healthcare needs of their communities. LaPorte recommends that healthcare providers reach out to their reimbursement consultants, legal teams, and accounting professionals to better understand the regulatory ramifications of this change so that they are best prepared for these changes in the ensuing months and years.