CMS Issues Interim Final Rule on Medicare/Medicaid Policy in Response to COVID-19 Interim Final Rule

COVID-19 Update

On Monday, the Centers for Medicare & Medicaid Services (CMS) released an interim final rule with comment period outlining new flexibilities to pre-existing Medicare and Medicaid payment policies and provider regulations in the midst of the COVID-19 public health emergency (PHE). The interim final rule—“Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency”—is aimed at assisting providers in responding to the current PHE as well as future disasters by making permanent regulatory changes with time limited activation. The rule is retroactively applicable as of March 1 and took effect on March 31. Comments can be submitted until June 1, 2020. CMS issued the interim final rule alongside the Department of Health and Human Services’ (HHS) announcement of additional flexibilities available using its emergency waiver authority under Section 1135 of the Social Security Act (SSA) (see the Manatt Insights newsletter for more).

The new interim final rule makes changes to provisions in Title 42 of the Code of Federal Regulations in order to effectuate (now and in future disaster or emergency situations) additional operational flexibilities not available under Section 1135. The rule represents a significant effort on CMS’s part to loosen regulations in order to increase healthcare system capacity and capabilities during the emergency. The rule is remarkable for its scope, addressing 30 separate issues across different provider types, and even addressing concerns relating to Medicare Advantage and Part D. Equally impressive are the specific rules CMS has chosen to change. In many cases, CMS’s new flexibilities represent—or go beyond—policies that providers had lobbied for for years, and that CMS had steadfastly resisted. Throughout the rule CMS takes pains to describe how these changes only apply for the duration of the pandemic. But it may be the case that having opened the door for these changes, they might now become the standard of practice once the crisis has passed. Notably, the rule:

  • Expands the use of telehealth services in Medicare
  • Permits hospitals to deliver some inpatient services in patients’ homes or other non-hospital locations, and still be paid under the inpatient fee schedule
  • Provides guidance related to medical resident oversight via telecommunications technology and reimbursement for moonlighting residents
  • Offers flexibility for the use of technology in home health settings
  • Modifies requirements for ongoing payment innovation models and data collection for quality programs

Although issued several days after President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law, the interim final rule appears to have been drafted before the law was passed, as it does not reference the new legislation, and there are some provisions that are in tension with the new law. CMS may need to provide further clarification to ensure the regulation and new statute are in harmony.

Changes to Telehealth Services in Medicare

These provisions include expanding the list of eligible telehealth services, providing flexibility to providers in waiving copayments, introducing new coverage for remote patient monitoring services, reducing frequency limitations on telehealth utilization, and allowing telephonic and secure messaging services to be delivered to both new and established patients.

Expansion of Telehealth Services. CMS added more than 80 new telehealth services, but has not yet expanded the list of eligible distant site practitioners. The new list includes:

  • Emergency department visits
  • Initial and subsequent observation and observation discharge day management
  • Initial hospital care and hospital discharge day management
  • Initial nursing facility visits and nursing facility discharge day management
  • Critical care services
  • Domiciliary, rest home or custodial care services
  • Home visits
  • Inpatient neonatal and pediatric critical care
  • Initial and continuing intensive care services
  • Care planning for patients with cognitive impairment
  • Psychological and neuropsychological testing
  • Therapy services for physical and occupational therapy
  • Radiation treatment management services

Expanded Use of Telephonic Visits (Virtual Check-Ins) and E-Visits (Secure Messages). CMS will now permit virtual check-in and e-visit services to be provided to new and established patients (these services had previously been limited to established patients only). CMS also added coverage for new audio-only telephonic evaluation and management codes.

Expansion of Remote Patient Monitoring Services. CMS added coverage for a range of remote patient monitoring codes and is no longer requiring that the patient have multiple diseases.

Reducing Frequency Limitations. CMS is removing frequency limitations for inpatient visits, skilled nursing facility visits and critical care consult codes.

Other Relevant Changes During the PHE:

  • CMS reinforced that in general, physicians and other practitioners will not be subject to administrative sanctions for reducing or waiving copayments for telehealth services.
  • Clinicians are no longer required to have one “hands-on” visit per month for end-stage renal disease (ESRD) beneficiaries. CMS will also exercise enforcement discretion related to face-to-face visit requirements for patients receiving home dialysis.
  • CMS is waiving the requirement that physicians and nonphysician practitioners perform in-person visits for nursing home residents.
  • Hospice providers can provide services via telehealth if it is feasible to do so, and face-to-face encounters for recertification of the hospice benefit can be conducted via telehealth.
  • CMS clarified that annual consent for virtual check-ins may be obtained at the same time, and not necessarily before the time such a check-in is furnished.
  • CMS will temporarily allow rehabilitation physicians to conduct the required three visits per week via telehealth services, replacing the current face-to-face visit requirement.
  • CMS will expand the services included in Virtual Communication Services for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs), and will allow specific, billable virtual communication services to be available to new patients who have not been seen in the RHC or FQHC within the previous 12 months.
  • The counseling component of Medication-Assisted Treatment (MAT) for Opioid Treatment Programs (OTPs) may be conducted via a telephone call if a Medicare beneficiary does not have technology allowing for a two-way visual and audio connection.

Changes to Certain National Coverage Determination and Local Coverage Determination Requirements

The rule loosens certain conditions CMS or its Medicare Administrative Contractors (MACs) had imposed over time on coverage of items and services through its NCDs or LCDs. NCDs and LCDs are determinations, by CMS or the MACs, that a particular item or service will be covered under Medicare. The NCD or LCD is typically issued with clinical conditions or requirements for evaluations associated with coverage. In this rule, CMS is temporarily waiving, for the duration of the emergency, three of those requirements, whenever they appear in an NCD or LCD:

  • Face-to-face and in-person requirements: Any face-to-face or in-person encounter for evaluations, assessments, certifications or other implied face-to-face service requirement in an NCD or LCD is waived. The waiver does not extend to statutory face-to-face requirements, such as those for power mobility devices.
  • Respiratory, home anticoagulation management and infusion pump policies: During the emergency, CMS will not enforce the clinical indications for coverage across respiratory, home anticoagulation management, and infusion pump NCDs and LCDs. This will loosen eligibility for such items and services as home oxygen, ventilators for home use, infusion pumps and CPAP masks.
  • Consultations or services furnished by or with the supervision of a particular medical practitioner or specialist: To the extent NCDs and LCDs require a specific practitioner type or physician specialty to furnish a service or supervise others, during the emergency the chief medical officer or equivalent of a facility can authorize another physician specialty or other practitioner type to meet those requirements.

Changes to Inpatient Hospital Services Furnished Under Arrangements Outside the Hospital

Current CMS policy does not permit routine hospital inpatient services, such as nursing services, bed and board, medical social services, and provision of drugs, biologicals, supplies, appliances and equipment, to be furnished under arrangements outside the hospital. To increase flexibility and capacity, effective March 1, 2020, and for the duration of the emergency, CMS will permit hospitals to perform routine hospital inpatient services outside the hospital, including “under arrangements” with third parties, and will continue to compensate for such services under the inpatient fee schedule, so long as the hospital exercises control and responsibility over the provision of the services. This change should permit hospitals to begin delivering acute levels of care in locations outside the four walls of the hospital, including in beneficiaries’ homes.

Changes to Medicare and Medicaid Home Health Benefit

Clarification of Homebound Status Under the Medicare Home Health Benefit. This provision clarifies the COVID-19-related circumstances in which a beneficiary would be considered “confined to the home” (or “homebound”) under Medicare’s eligibility rules for home health benefits. In general, Medicare’s homebound rule allows patients to be considered homebound if it is medically contraindicated for the patient to leave the home because it would require a considerable and taxing effort. Under this provision, with a physician certification1 and appropriate assessment and medical record documentation for each specific beneficiary, a physician may determine it is medically contraindicated for a beneficiary to leave the home if they have a confirmed or suspected case of COVID-19, or a condition that may make the beneficiary more susceptible to contracting COVID-19. Under this provision, many Medicare beneficiaries could be considered confined to the home and eligible for Medicare home health services, if they meet all other eligibility requirements for these services.

The Use of Technology Under the Medicare Home Health Benefit During the PHE for the COVID-19 Pandemic. Medicare rules permit home health agencies to furnish services via a telecommunications system (technology), as long as such services do not substitute for in-person home health services ordered as part of a plan of care certified by a physician,1 and are not considered a home health visit for purposes of eligibility or payment. Within these parameters, “remote patient monitoring” has been recognized as one type of service that can be furnished via technology to augment a home health plan of care. The costs of such services are considered an allowable administrative cost.

Revision of Home Health Agency (HHA) Shortage Area Requirements for Furnishing Visiting Nursing Services. CMS recognizes the need for visiting nursing services furnished by RHCs or FQHCs may increase during the PHE. For the duration of the PHE, CMS deems any area typically served by an RHC and any area that is included in an FQHC’s service area plan to have a shortage of HHAs in order to provide flexibility to ensure patient access to nursing services in the home. As such no special justification is required by CMS for RHCs/FQHCs to provide such services. However, RHCs/FQHCs should still check the HIPAA Eligibility Transaction System (HETS) before providing visiting nurse services to ensure that the patient is not already under a home health plan of care and acknowledge visiting nurse services will not be covered by Medicare if services overlap with a 30-day period of home healthcare in HETS.

CMS also clarifies that using an RHC/FQHC visiting nurse service solely to obtain a nasal or throat culture would not be considered a nursing service under this provision, but if, during an otherwise covered RHC/FQHC visit, the nurse obtained a nasal or throat culture, that would be permissible.

Changes to Expand Workforce Capacity for Ordering Medicaid Home Health Services, Medical Equipment, Supplies and Appliances, and Physical Therapy, Occupational Therapy, or Speech Pathology and Audiology Services. This provision expands the workforce and increases timely access to Medicaid home health services, which include part-time or intermittent nursing, home health aide services, medical supplies, equipment, and appliances, and may include therapeutic services, by allowing licensed practitioners practicing within the scope of their practice, to order Medicaid home health services during the PHE. This provision aligns with Medicare rules on who can order medical supplies, equipment and appliances, and allows more seamless access to services for Medicaid beneficiaries, including dual-eligibles. This change does not expand the benefit categories under which these services can be covered; states must continue to cover these services under the home health benefit, unless otherwise allowed by federal regulations.

Changes to Inpatient Rehabilitation Facilities Physician Evaluation Requirements and Clarification Regarding the ‘3-Hour’ Rule

During the PHE period, CMS is removing the post-admission requirement that all IRF patients receive a physical evaluation within 24 hours of arrival to reduce paperwork burden and provide rehabilitation physicians with more flexibility and enable them to focus their time on helping provide care where needed during the emergency. CMS notes that the temporary removal of this requirement does not preclude an IRF patient from being evaluated within the first 24 hours of admission if the IRF believes the patient’s condition warrants such an evaluation.

In addition, CMS clarifies that in cases where an IRF’s intensive rehabilitation therapy program is impacted by the PHE (for example, due to staffing disruptions resulting from self-isolation, infection or other circumstances related to the PHE), the IRF should not feel obligated to meet the industry standards of at least three hours of therapy per day and should make a note to this effect in the medical record.

Changes to Teaching Physician and Residents Regulations

Revisions to Teaching Physician Regulations During the PHE. To increase the capacity of teaching facilities to respond to COVID-19, CMS is amending the teaching physician requirement to allow direct supervision either by physical presence or through interactive telecommunications technology (real-time, audio and video telecommunications) during the key portion of the service in order for the teaching physician to furnish assistance and direction for a select list of services (e.g., evaluation and management, diagnostics, psychiatric services). The exceptions for teaching proximity will not apply in the case of surgical, high-risk, interventional or other complex procedures; services performed through an endoscope; and anesthesia services. CMS seeks comment on whether other procedures should also be exempt from this policy given their complex nature or potential danger to the patient.

Application of the Expansion of Telehealth Services to Teaching Physician Services. CMS specifies that during the PHE period, Medicare may make payment under the physician fee schedule (PFS) for teaching physician services, and 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.

Revisions to Moonlighting Regulations During the PHE. A licensed resident physician is considered to be “moonlighting” when they furnish physicians’ services to outpatients outside the scope of an approved graduate medical education (GME) program. Under current policy, for example, a resident in a hospital’s approved GME program for anesthesia who typically furnishes only anesthesia-related services in an operating room would not be able to provide separately billable physicians’ services if these services were not part of the resident’s approved GME program. As a result, this regulation could unintentionally limit the number of licensed practitioners available to furnish services to Medicare patients and could have the unintended consequence of limiting access to critically needed care.

During the PHE, CMS will allow the 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 to be separately billable physicians’ services for which payment can be made under the PFS, provided that the services are identifiable physicians’ services and meet the conditions of payment for physicians’ services to beneficiaries; the resident is fully licensed to practice by the relevant state; and the services are not performed as part of the approved GME program.

Counting of Resident Time During the PHE. In addition to the payment revisions discussed above, Medicare may also make payment under the PFS for teaching physician services when the resident is furnishing these services while in quarantine under direct supervision of the teaching physician by interactive telecommunications technology.

Currently, there is no provision for a hospital to claim a resident for indirect or direct graduate medical education (DGME) if the resident is performing patient care activities in his or her own home, or in a patient’s home. For the duration of the PHE, CMS is 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 who 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 IME and DGME purposes.

Changes to Innovation Models, Shared Savings and Quality Ratings

Innovation Center Models. This section adds flexibilities for certain Innovation Center alternative payment models to ensure smoother functioning during the PHE.

  • The Medicare Diabetes Prevention Program previously required the delivery of educational and coaching services over a prespecified series of sessions during a fixed time frame, with certain sessions required to be delivered on an in-person basis, and only allowed participants to enroll in one. In consideration that beneficiaries’ schedules may be disrupted and in-person sessions may be risky, this rule removes prior restrictions on virtual visits and allows beneficiaries who are unable to complete the program to re-enroll at a later date.
  • The Comprehensive Care for Joint Replacement Model is modified to assign all episodes their target price regardless of the actual expenditures involved for joint replacement or hip fracture episodes beginning within 30 days of the national health emergency declaration. In addition, the fifth contract year will be extended by three months.

Change to Medicare Shared Savings Program (MSSP) Extreme and Uncontrollable Circumstances Policy. CMS’s previous MSSP Extreme and Uncontrollable Circumstances policy, first released as an interim final rule in 2017, was broadly titled but informed by a recent series of disasters including hurricanes and wildfires. Under the terms of the original policy, model participants in an affected area were offered limited relief in the form of a neutral quality adjustment, except in the case where (1) the circumstances occurred during the quality reporting period, which occurs after the end of a model year, and (2) the quality reporting period was extended to allow more time for reporting. Because the COVID-19 PHE began during the 2019 model year quality reporting period, and because the quality reporting period was extended, the policy would not have applied for 2019 quality performance results. Given CMS concerns that the effects of COVID-19 may extend well into the year, however, the revised policy will apply to the 2019 model year, permitting a neutral adjustment, despite the quality reporting period extension.

For 2020 and beyond, CMS is considering whether the current alternative scoring policy of assigning a neutral quality adjustment will be sufficient to address challenges faced by MSSP Accountable Care Organizations, and may address this and other model design issues in future rulemaking.

Addressing the Impact of COVID-19 on Part C and Part D Quality Rating Systems. The rule makes a series of temporary changes to change how CMS assesses quality for Part C and Part D plans. Typically, these plans are evaluated based on their scores on a series of Healthcare Effectiveness Data and Information Set (HEDIS) quality measures gathered shortly after the end of each year through in-person visits and telephone surveys. Under the rule, plans must curtail ongoing data collection related to 2019 HEDIS measure performance immediately, and are no longer required to collect and submit Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey data for 2020. CMS is delaying the administration of the Medicare Health Outcomes Survey (HOS), another survey that is used in quality measure calculation, by several months and will continue to assess whether further delays are necessary.

The rule also describes updates to calculations for 2021 ratings, which include assigning 2020 scores for the HEDIS, CAHPS and HOS data that would otherwise be missing for use in calculating the 2021 Star ratings. These 2020 scores would reflect HEDIS data from the 2018 performance period, collected in early 2019, and survey data collected in 2019.

For 2022 Star ratings, which reflect HEDIS data from the ongoing 2020 performance year, the rule states that previously planned guardrails meant to add predictability by limiting the degree to which performance cutoffs for certain measures can fluctuate from year to year, will no longer be implemented.

1 Section 3708 of the CARES Act (H.R. 748) expanded the definition to include a nurse practitioner or clinical nurse specialist working in accordance with state law, or a physician assistant under the supervision of a physician.

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