Health Reform WK-EDGE Coronavirus Aid, Relief, and Economic Security Act (CARES Act) impacts health industry, health law
Friday, April 3, 2020

Coronavirus Aid, Relief, and Economic Security Act (CARES Act) impacts health industry, health law

By Cathleen Calhoun, J.D.

Highlights of the CARES Act that relate to the health industry and health law are outlined.

On Friday, March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law, a $2 trillion stimulus package. Hospitals, businesses, and individuals will receive urgent financial support through the CARES Act that has resulted from the coronavirus (COVID-19) pandemic. Some highlights of the CARES Act that relate specifically to health law and the health industry include provisions on access to health care for COVID-19 patients, supplies, drugs, Medicare, Medicaid, and telehealth.

Access to health care—COVID-19 patients. Group health plans and insurers must cover and reimburse COVID-19 diagnostic testing providers at pre-emergency-period negotiated rates. If the rates were not previously set, they equal the cash price for services listed on a public website or can be negotiated for a rate lower than that cash price. COVID-19 diagnostic test providers must publicize the cash price for the test or possibly face a civil monetary penalty of up to $300 per day from HHS. Also, under the CARES Act, health care centers are appropriated $1.3 billion for the prevention, treatment, and diagnosis of COVID-19.

Drugs and supplies. The review of drug applications to help with shortages of emergency drugs will be prioritized. At the same time, drug manufacturers have new requirements about reporting a discontinuation and disruption of access to active pharmaceutical ingredients. Manufacturers of certain drugs and medical devices critical to public health during a public emergency must create, maintain, and implement risk management plans related to shortages. Also, those manufacturers will be subject to shortage-related inspections by HHS.

Medicare. A temporary suspension of Medicare sequestration will occur from May 1, 2020 through December 31, 2020. HHS will increase, for purposes of the Medicare hospital inpatient prospective payment system add-on payment, the weighting factor for coronavirus-diagnosed patients discharged during the emergency period. Also during the emergency period, HHS will waive the requirement that patients of inpatient rehabilitation facilities receive at least 15 hours of therapy per week, and a prescription drug plan or MA-PD plan must allow a part D eligible individual reenrolled in a plan to receive a single fill or refill the total day supply prescribed for a covered part D drug. Also, HHS is required to expand the Medicare accelerated payment program to hospitals experiencing significant cash flow problems during the emergency period.

Medicaid. Under the CARES Act, states may disregard the income of a spouse and conduct a Medicaid analysis based on an individual’s eligibility for medical assistance due to a reduction of income. Spousal protections are extended through November 30, 2020. The originally scheduled $4 billion disproportionate share hospital (DSH) reductions are removed for FY 2020 but will take effect December 1, 2020. Also, states may receive the temporary increase of Medicaid Federal Medical Assistance Percentage (FMAP) for a period of 30 days.

Telehealth. Telehealth services in Medicare are greatly expanded. Even those patients without COVID-19 may receive telehealth services. In addition, HHS may temporarily waive or modify the application of portions of the Social Security Act in the case of a telehealth service furnished in any emergency area during the emergency period. Payment is enhanced for telehealth services furnished through a telecommunications system by a federally qualified health center (FQHC) or rural health clinic (RHC). The requirement of face-to-face visits for home dialysis patients and physicians is waived, and a hospice doctor or practitioner is also allowed to provide care through telehealth during the emergency period.

More information on the CARES Act will continue to be provided. Additional information on the COVID-19 topic can be found on our regularly-updated COVID-19 resources page.

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