Affidavit: Healthcare and the Law - Preparing for the End of the COVID-19 Public Health Emergency

Contributors: Kevin M. Moran, JD'19 and Sean S. Zabaneh
To learn more about Kevin and Sean, click here.

 

Regulatory flexibility during the COVID-19 pandemic is coming to a close in 2023. At the start of the pandemic, the U.S. government declared a public health emergency (PHE) that opened the door for much needed flexibility related to COVID-19 treatment and coverage, telemedicine, and liability immunity for healthcare providers. Waivers of traditional healthcare credentialing, staffing, and reporting requirements were also available. As a result of the PHE, healthcare businesses have now spent nearly three years adjusting their operations and compliance policies accordingly.

On January 30, 2023, the Biden administration announced the PHE will expire on May 11, 2023.1 Because the PHE policies have been in place for nearly three years, healthcare market participants will undoubtedly experience a significant adjustment period that will necessarily involve reeducation of personnel to ensure compliance with applicable laws and regulations. This concern is particularly acute given the recent wave of mergers and acquisitions in the healthcare space during the pandemic.2

Overview of the PHE Policies

The U.S. Department of Health and Human Services (HHS) initially declared the PHE pursuant to Section 319 of the Public Health Service Act in January 2020. A PHE lasts for 90 days and must be renewed to extend beyond that timeframe. The PHE has been renewed several times, including in January 2023, but will expire on May 11, 2023, based on President Biden’s January 2023 announcement.3 In short, the PHE enabled HHS, the Centers for Disease Control and Prevention (CDC), and other agencies to access certain funding and increase staffing to respond to the COVID-19 emergency. The PHE also created waivers of certain requirements for Medicare, Medicaid, CHIP, and private insurance, and provided increased flexibility for telemedicine and other healthcare services, among other things.

Changes to Expect When the PHE Ends

When the PHE comes to a close, many aspects of contemporary COVID-era healthcare will change or no longer be permitted. Healthcare businesses should consider at least the following policy changes that could directly impact their operations.

Reimbursement for COVID-19 Treatments, Testing, and Vaccines. Reimbursement for COVID-19 services may be the most significant anticipated change. During the pandemic and for the duration of the PHE, millions have received free testing, treatments, and vaccines. Depending on the payer, some or all of these services may no longer remain free when the PHE ends. For instance, cost sharing requirements will apply for Medicare recipients upon the end of the PHE for at-home testing (8 per month) and certain treatments, among other things.4 For Medicaid and CHIP enrollees, vaccines will continue as a mandatory benefit for children and adults. However, privately insured individuals could incur out-of-pocket expenses for out-of-network COVID-19 services and vaccines.5 These changes could be quite significant because treatment costs are expected to rise. For example, Pfizer’s two-dose vaccine could rise from $30 per shot to $110-$130.6 And the antiviral therapy, Paxlovid, of which the government purchased 20 million courses at bulk discount for $530 each, is no longer expected to be free for Americans.7

Telehealth. Coverage for telehealth services changed during the PHE for Medicare enrollees. For instance, under the PHE, Medicare beneficiaries could receive telehealth services regardless of patient location (e.g., services would not be limited to rural areas). PHE flexibility also permitted patients to receive telehealth services by phone rather than video. These particular policies will be extended by the Consolidated Appropriations Act through December 31, 2024, regardless of the PHE status.8  However, also during the PHE, HHS waived certain penalties for HIPPA violations against providers providing telemedicine services, and the Drug Enforcement Administration (DEA) permitted telemedicine visits for prescription services for controlled substances without in-person evaluations during the pandemic.9 These policies are expected to end upon conclusion of the PHE, subject to any specifications from the agencies.

Emergency Use Authorizations. During the PHE, the U.S. Food and Drug Administration (FDA) issued hundreds of emergency use authorizations (EUAs) for COVID-19 tests, treatments (antivirals and antibodies), and three vaccines. These EUAs allow the public to access such medical countermeasures before FDA approval. They also are slated to expire shortly after10 expiration of the Section 564 emergency declarations related to EUAs. This means COVID-19 medical countermeasures still under EUAs (e.g., Paxlovid) may be unavailable for use. The FDA has currently approved the Pfizer and Moderna vaccines.11

Liability Immunity for Medical Countermeasures. During the pandemic, HHS announced expanded liability immunity under the Public Readiness and Emergency Preparedness (PREP) Act for licensed and certain unlicensed healthcare professionals providing or prescribing COVID-19 countermeasures, like vaccines, as well as vaccine manufacturers and distributors.12 HHS also extended immunity to pharmacists administering vaccines in certain cases. These immunities will end on October 1, 2024, as stated in the PREP Act declaration.

Stark Law Waivers. The Stark Law “prohibits physicians from referring patients to receive ‘designated health services’ payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies.”13 CMS issued a blanket Stark Law waiver for certain financial arrangements that might not otherwise be allowed, provided the arrangement was necessary for COVID-19 purposes.14 That waiver ends upon expiration of the PHE.

During the PHE, private group health plans subject to ERISA were instructed to disregard the “Outbreak Period” (beginning March 1, 2020, and ending 60 days after the PHE ends) in determining the date for paying COBRA premiums, timeframes for filing claims under the plan’s processing procedures, deadlines for requesting appeals for denials, and other areas.15 The statutory timeframes are expected to resume 60 days after the national emergency declaration expires.

Medicare Reimbursement Flexibility. During the PHE, hospitals received a 20% increase in Medicare payment rates for the treatment of patients diagnosed with COVID-19 through the in-patient prospective payment system.16 Section 1135 waivers were also implemented to increase access to care. For Medicare beneficiaries, HHS also waived its 3-day prior hospitalization requirement for skilled nursing facility (SNF) stays and provided extra coverage for beneficiaries who exhausted their SNF benefits.17 These waivers and increased payment will likely end upon expiration of the PHE.

Key Takeaways for Healthcare Businesses

  • Anticipate and plan. Healthcare providers and businesses should assess which waivers they currently operate under and establish a plan for compliance once those waivers expire. Physician agreements entered during the pandemic should be assessed for Stark Law compliance post-PHE.
  • Be aware of both federal and state policy changes. Even after the end of the PHE, states can decide to offer and continue flexibility around telehealth and other COVID-19-era policy changes. Providers and administrators should keep apprised of additional protections offered in their respective states.
  • Anticipate communication challenges to patients, staff, and/or members. Many participants in healthcare markets, including patients, may not be aware of impending changes to treatment, insurance, and healthcare policies. Advance communication on possible future changes and what to expect will assist in the transition process.


Contact Kevin at: [email protected]
Contact Sean at: [email protected]

Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.

 

References

  1. Exec. Office of the President, Off. of Mgmt. and Budget, Statement of Admin. Policy (Jan. 30, 2023) available at https://www.whitehouse.gov/wp-content/uploads/2023/01/SAP-H.R.-382-H.J.-Res.-7.pdf.
  2. See Dave Muoio, Hospital and health system transactions remain infrequent but hefty in Q3 2022: report, Fiercehealthcare.com (Oct. 12, 2022), available at https://www.fiercehealthcare.com/providers/hospital-and-health-system-transactions-remain-infrequent-hefty-q3-2022-report.
  3. In addition to the PHE, the former administration issued a national emergency declaration under Section 201 of the National Emergencies Act, and HHS issued an emergency declaration for emergency use authorizations (EUA) of medical countermeasures for COVID-19 under Section 564 of the Federal Food, Drug, and Cosmetic Act. HHS also issued a declaration under the Public Readiness and Emergency Preparedness (PREP) Act and provided civil immunity to providers for certain COVID-19 services and treatments. Congress also enacted recent legislation providing regulatory flexibility that is tied to the emergency declarations, including, among other things, the Families First Coronavirus Response Act (FFCRA), the American Rescue Plan Act (ARPA), the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Inflation Reduction Act (IRA), and the Consolidated Appropriations Act (CAA).
  4. See CMS/Dep’t of Labor, FAQs About Affordable Care Act Implementation Part 51, Families First Coronavirus Response Act And Coronavirus Aid, Relief, And Economic Security Act Implementation (Jan. 10, 2022), available at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-51.pdf
  5. See id.
  6. Corinne Reichert, Pfizer Says COVID Vaccine Will Cost Up to $130 Per Dose, CNET (Oct. 21, 2022), available at https://www.cnet.com/health/medical/pfizer-says-covid-vaccine-will-cost-up-to-130-per-dose/.
  7. See Hannah Recht, Paxlovid Has Been Free So Far. Next Year, Sticker Shock Awaits., KHN.org (Dec. 7, 2022), available at https://khn.org/news/article/paxlovid-covid-sticker-shock-insurance/.
  8. Department of Health and Human Services (HHS), Telehealth policy updates (Jan. 23, 2023), available at https://telehealth.hhs.gov/providers/policy-changes-during-the-covid-19-public-health-emergency/telehealth-policy-updates/.
  9. CMS, COVID-19 Emergency Declaration Blanket Waivers for Health Care Provider (Oct. 13, 2022), available at https://www.cms.gov/files/document/covid-19-emergency-declaration-waivers.pdf; see also HHS, Prescribing controlled substances via telehealth (Jan. 28, 2021), available at https://telehealth.hhs.gov/providers/policy-changes-during-the-covid-19-public-health-emergency/prescribing-controlled-substances-via-telehealth/.
  10. Before the EUA declaration is terminated, the FDA will publish a Federal Register notice, and allow for a reasonable period of transition. See FDA, FAQs: What Happens to EUAs When Public Health Emergency Ends? (Jan. 31, 2023), available at https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/faqs-what-happens-euas-when-public-health-emergency-ends#:~:text=The%20declaration%20generally%20lasts%20for,enable%20FDA%20to%20issue%20EUAs.
  11. See FDA.gov, Coronavirus (COVID-19) Update: FDA Authorizes Updated (Bivalent) COVID-19 Vaccines for Children Down to 6 Months of Age (Dec. 8, 2022), available at https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-updated-bivalent-covid-19-vaccines-children-down-6-months.
  12. See PHE.gov, PREP Act Immunity from Liability for COVID-19 Vaccinators (Apr. 13, 2021), available at https://www.phe.gov/emergency/events/COVID19/COVIDVaccinators/Pages/PREP-Act-Immunity-from-Liability-for-COVID-19-Vaccinators.aspx#:~:text=Except%20for%20willful%20misconduct%2C%20a,under%20the%20PREP%20Act%20issued.
  13. HHS Office of Inspector General, Fraud & Abuse Laws (last visited Feb. 1, 2023), available at https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/.
  14. CMS.gov, Blanket Waivers of Section 1877(g) of the Social Security Act Due to Declaration of COVID-19 Outbreak in the United States as a National Emergency (eff. Mar. 1, 2020), available at https://www.cms.gov/files/document/covid-19-blanket-waivers-section-1877g.pdf.
  15. U.S. Department of Labor, EBSA Disaster Relief Notice 2021-01 (2021), available at https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2021-01.
  16. CMS.gov, New COVID-19 Treatments Add-On Payment (NCTAP) (Jan. 23, 2023), available at https://www.cms.gov/medicare/covid-19/new-covid-19-treatments-add-payment-nctap.
  17. CMS: Medicare Shared Savings Program, Skilled Nursing Facility 3-Day Rule Waiver: Guidance (May 2022), available at https://www.cms.gov/medicare/medicare-fee-for-service-payment/sharedsavingsprogram/downloads/snf-waiver-guidance.pdf.