COVID-19 Legal Update: CARES Act Health Care Provisions

In response to the COVID-19 pandemic, Congress has enacted sweeping legislation — the Coronavirus Aid, Relief, and Economic Security (CARES) Act — designed to reinforce key industries and protect families. Many of the CARES Act provisions address the unique needs of the health care community. This article highlights some of the relevant policy and funding provisions.

Recapitalization of Emergency Fund

Congress appropriated $100 billion dollars to capitalize the "Public Health and Social Services Emergency Fund." The funds will be used, in part, to reimburse "eligible health care providers" for "health care-related expenses or lost revenues attributable to coronavirus." While the Department of Health and Human Services will establish the specifics for disbursement of these funds, some key details are provided in the statutory text.

Eligible providers. This term includes, among other entities, Medicare and Medicaid enrolled suppliers and providers, and any for-profit and nonprofit entities specified by HHS that provide diagnosis, testing or care for individuals with possible or actual COVID-19 infections.

Fund distribution. Eligible providers will need to submit an application for funds with a statement justifying the need for the funds. The payments will be available for:

• Coverage for loss revenue;
• Building or construction of temporary structures;
• Medical supplies and equipment, including personal protective equipment and testing supplies;
• Increased workforce and training;
• And more.

Medicare

Expansion of Medicare Accelerated Payments Program. Hospitals experiencing financial difficulty due to delays in receiving payment for Medicare services provided may be eligible for an accelerated or advance payment. To get payments to hospitals more quickly, the CARES Act:

• Increases the prepayment amount from 70% to 100% of expected Medicare payments.
• Increases the length of time accelerated payments may cover from three months to six months.
• Delays the start of recoupment of any overpayments from 90 days to 120 days.
• Extends the due date for any outstanding balances from 90 days to one year.

The process and required forms for advance payment requests vary for each Medicare Administrative Contractor locality. Additionally, the Centers for Medicare & Medicaid Services has established a COVID-19 hotline for each MAC to assist with these requests.

Suspension of 2% Medicare sequester. The annual 2% cut in Medicare payments to hospitals, physicians and other providers is canceled for the rest of calendar year 2020. To offset the added expense of the cancellation, the CARES Act extends the sequester by one year, through 2030.

Expanded telehealth coverage. The CARES Act broadly, though temporarily, expands telehealth coverage under Medicare. Some key provisions include:

• Relaxing the prior requirement that coverage be restricted to real-time audio-visual technology, allowing coverage for phone-based services.
• Suspending the requirement that a care provider must have seen a patient in person within the past three years.

There are many more relevant provisions in the 800-page act. For assistance understanding the impact of the CARES Act on operations, updating policies and procedures, or navigating the process for requesting emergency funds, please contact a member of Robinson Bradshaw's Health Care Practice Group.