The Centers for Medicare and Medicaid (CMS) has issued waivers and flexibilities for hospitals and other select health care organizations in the wake of COVID-19 to ease their burden in providing care during the pandemic.

An overview of the Section 1135 blanket waivers follows, as well as operational considerations your organization—particularly hospitals—should keep front of mind as it makes decisions.

Section 1135 Waiver Background

As described in the Social Security Act (the act), Section 1135 intends to “enable the secretary [of Health and Human Services] to ensure to the maximum extent feasible, in any emergency area and during an emergency period…that sufficient health care items and services are available to meet the needs of individuals in such area enrolled in the programs under titles XVIII, XIX, and XXI.”

The section also allows “heath care providers that furnish such items and services in good faith, but are unable to comply with one or more requirements described in subsection (b), may be reimbursed for such items and services and exempted from sanctions for such noncompliance, absent any determination of fraud or abuse.”

On January 31, 2020, the secretary of the Department of Health and Human Services (HHS) declared a public health emergency under the Public Health Service Act. The president then declared a national emergency on March 13, 2020, under the National Emergencies Act and the Stafford Act. As a result of the declarations, waivers in Section 1135 were permitted.

Blanket Waivers

Subsequent to the president’s national emergency declaration, CMS issued a series of so-called blanket waivers that cover a range of areas. These 1135 blanket waivers apply to federal requirements and don’t apply to state requirements for licensure or conditions of participation. Once approved, the waivers apply automatically.

The waivers discussed below relate to hospitals, psychiatric hospitals, and critical access hospitals (CAHs)—including cancer centers and long-term care hospitals (LTCHs). Please note, these blanket waivers don’t require requests to be filed.

Many, if not most, of these items apply to situations in which an organization experiences a surge or surge capacity is needed. In addition, most if not all, should be consistent with a state’s emergency preparedness or pandemic plan. For more information regarding the definition of surge and surge capacity, see the Department of Health and Human Service’s surge resources. 

Patients

CMS waived the requirement to enforce Section 1867(a) of the Emergency Medical Treatment and Labor Act (EMTALA) regarding the screening of patients offsite from the hospital’s campus.

For hospitals impacted by widespread outbreak of COVID-19, patients’ rights requirements aren’t mandatory for the following areas:

• Timeframes in providing medical record copies
• Requirements related to patient visitation
• Requirements regarding seclusion

Certain requirements related to the provision of information concerning discharge planning are also waived.

All limiting detailed discharge planning for hospitals’ requirements of 42 CFR 482.43(c)—related to post-acute care services—are waived that cover:

• Including a list of post-acute settings available to the patient
• Informing the patient or representative of their freedom to choose
• Disclosing financial interest in home health agencies (HHAs) or skilled nursing facilities (SNFs) recommended in the discharge plan

Certain telemedicine regulatory provisions for hospitals and CAHs are waived to make it easier to provide telemedicine services with an offsite hospital.

Requirements that Medicare patients be under the care of a physician are waived, but care procedures must be consistent with the state’s emergency preparedness plan.

Certain requirements regarding the development and maintenance of nursing care plans for patients are waived.

Reporting

Waivers

The following provisions are waived in relation to reporting:

• Certain requirements of verbal orders to allow more efficient treatment of patients in surge situations; specific regulations implicated include 42 CFR 482.23, 482.24 and 482.635(d)(3)
• Requirements related to ICU deaths and the use of soft wrist restraints; this is to allow more focus on patient care demands due to a surge
• Requirements for hospitals to provide patients information about advance directive policies
• Certain requirements related to utilization review plans
• Certain requirements regarding written policies and procedures to use when evaluating emergencies; this is applicable to surge facilities only
• The development and implementation of emergency preparedness policies and procedures for surge sites
• Certain requirements to provide details of various aspects of quality assurance and performance improvement programs
• Certain requirements related to therapeutic diet manuals approved by the dietitian and medical staff at surge capacity sites

Flexibilities

CMS is providing flexibility for inpatient rehabilitation facilities (IRFs) regarding the 60% rule—a Medicare facility criterion that requires each IRF to discharge at least 60% of its patients with one of 13 qualifying conditions.

Inpatient rehabilitation hospitals or units that don’t comply with the 60% rule will lose the IRF payment classification and instead be categorized as general acute care hospitals.

CMS is also allowing extended neoplastic disease care hospitals to adjust the calculation of the 20-day length of stay requirement for inpatient stays for which the hospital admits and discharges patients.

Staffing

Waivers

The following areas are waived in relation to staffing:

• Certain medical staff requirements related to physicians whose privileges will expire or for new privilege grants to address workforce concerns related to COVID-19
• Provisions of the regulations concerning the staffing and organization of medical records departments
• Minimum personnel qualifications for clinical nurse specialists, nurse practitioners, and physician assistants at CAHs
• Certain requirements regarding staff licensure, certification, and registration at the federal level for CAH staff
• Requirements that out-of-state practitioners be licensed in the state in which they’re providing services

CMS has also waived or modified a number of provider enrollment-related provisions including:

• Screening requirements such as application fee, criminal background check, and site visit waivers
• Postponing revalidation actions
• Expediting applications

Additional Focus Areas

Waivers

Waivers are also in place for additional areas including the following:

• Requirements that certified registered nurse anesthetist (CRNA) be under supervision of a physician; this also applies to CAHs and ambulatory surgery centers and must be consistent with the state’s emergency preparedness plan
• Requirements that CAHs be located in a rural area; this allows the CAH to establish surge site locations
• CAH requirements regarding the number of permitted beds and maximum length-of-stay
• Certain requirements for Medicare conditions of participation and provider-based department requirements where hospitals apply during the PHE

Flexibilities

Permissions are now allowed for the following activities:

• Reusing face masks during the same shift in the compounding area
• Using non-hospital buildings and space for patient care and quarantine sites during surges, provided the location is approved by the state
• Housing acute care patients in excluded distinct part inpatient rehabilitation units or inpatient psychiatric facility units
• Moving hospital patients from an excluded distinct part psychiatric unit to an acute bed
• Excluding patient stays in an LTCH from the calculation of the 25-day average length-of-stay requirement
• Moving hospital patients from an excluded distinct part rehabilitation unit to an acute bed
• Providing hospital services in other health care facilities and setting up temporary expansions sites to increase capacity and allow the creation of surge capacity

The deadline to provide data for the 2019 Occupational Mix Survey has been extended to August 3, 2020.

Considerations

It’s important to note that this summary isn’t all-inclusive and generally addresses waivers and flexibilities related to hospital settings. There are a number of other waiver provisions that address other aspects of the health care system.

Additionally, each item invokes waivers to specific legal and regulatory text that must be examined in detail to determine the exact nature of what’s being waived or relaxed, and a thorough examination of the underlying legal and regulatory framework is required.

Timeframes

Relief under these waivers and other flexibility measures is generally permitted until the emergency is over.

It’s important that providers track actions taken in response and act accordingly. Providers will want to ensure that they have systems in place to return to normal laws, regulations, and rules as soon as the pandemic subsides.

Documentation and Information Tracking

Relief under the waivers is the direct result of the emergency itself, so it’s important that providers document how they’ve applied the waivers specifically to operations or controls.

Actions providers take as a result of dealing with the emergency should allow protection under applicable waivers granted. If the two can’t be tied together, providers risk running afoul of the rules even if they’ve been waived.

Clinical and financial documentation will be key throughout the emergency, which may be challenging during such a trying time. This is important not only to ensure that you’re appropriately benefiting from the waiver, but that you also receive proper reimbursement for your services as necessitated by the emergency.

When submitting claims covered by the blanket waiver, the Disaster Related (DR) condition code should be used. For Part B, the catastrophe and disaster-related (CR) modifier should be used.

Follow-Up Action Plans

Plan to develop a follow-up action plan related to waivers, such as provider enrollment, where some of the controls were reduced.

Consider how your organization will document what was in place during the emergency and then how to validate the enrolled physicians so they now meet your medical staff policies and procedures.

Billing and Front-End Tracking

Applicable billing modifiers and other related billing requirements for institutional providers and noninstitutional providers should be used to track and identify claims that are subject to the emergency and applicable waivers.

Front-end tracking is key. It will be more difficult to unpack activity after the fact once the emergency is declared over and the waivers no longer apply. Tracking information such as daily census of patient type will be challenging during the emergency, but even more so afterward.

This information, however, is a critical statistic for things like cost reporting and DSH determinations. This is especially true when acute patients are treated in non-acute or non-licensed areas of the hospital due to the emergency.

It’s also important that hospitals maintain discrete records of added costs incurred so that in the event there are additional funding pools available to help defray additional costs or lost revenue associated with emergency preparedness, hospitals will be in the best position to relay that data for such purposes.

An example includes the payroll related to the emergency, which would be extraordinary costs due to the emergency.

We’re Here to Help

For more information about Section 1135 and other waivers, application assistance, or subsequent administration, contact your Moss Adams professional.