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Telemedicine Related Medicare Revocation Actions for Failure to Provide Access to Documentation are on the Rise!

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Medicare Revocations of a Provider's Billing Privileges(September 25, 2020):  In recent years, many individuals (especially younger members of our work force) have embraced the chance to supplement their income through short-term engagements in the “gig economy.”  Notably, both professionals and non-professionals alike have found flexible, part-time opportunities online, allowing them to work remotely as independent contractors.  A number of physicians, nurse practitioners and physician assistants have taken advantage of the chance to participate in the gig economy, working virtually and providing telemedicine services for patients.  Unfortunately, many of these licensed professionals have conducted little or no due diligence into the companies engaging them to conduct evaluations by phone, video or asynchronously.  In some cases, the company engaging these licensed professionals to provide telemedicine evaluations has been alleged to have illegally funneled prescriptions issued by these professionals to third-party durable medical equipment (DME) suppliers.  Associated physicians, nurse practitioners and physician assistants (collectively referred to as “Telemedicine Providers”) have then found themselves subject to administrative sanctions, civil liability, and, in some case, criminal prosecution.  This article examines the Medicare revocation actions that have resulted from a Telemedicine Provider’s failure to provide access to documentation related to telemedicine services that are currently being pursued by Medicare Administrative Contractors (MACs) around the country.

I.  Overview of Statutory and Regulatory Concerns When Providing Telemedicine Evaluations:

With the advent of COVID, both governmental and private payors alike have supported the expansion of telehealth / telemedicine services.  Coverage and payment rules have been expanded by most payors and patients have welcomed the opportunity to be evaluated remotely by their caregiver.  Generally, the current wave of telemedicine related enforcement actions has been unrelated to the coverage expansions resulting from the spread of COVID.  The vast majority of Medicare revocation actions associated with improper telemedicine business practices have been related to pre-COVID conduct.   An overview of these improper telemedicine cases is provided below:

  • Intermediary marketing companies.  Over the last few years, licensed providers with prescribing authority have been actively recruited by an intermediary company[1] OR have responded to an online advertisement seeking to hire physicians, nurse practitioners or physician assistants to perform remote telemedicine evaluations. These companies essentially serve as middlemen – they are not typically participating providers or suppliers in the Medicare program.
  • Lists of beneficiaries to be evaluated remotely are assembled by the intermediary marketing companies. Using a variety of patient recruiting and screening methods, representatives of the intermediary marketing company will work to assemble a list of prospective beneficiaries who have expressed an interest in being evaluated for DME.  The intermediary marketing company then provides these beneficiary lists to Telemedicine Providers who have been engaged to conduct remote assessments and evaluations[2] of these individuals. After completing an evaluation, the Telemedicine Provider then decides whether it is medically necessary and appropriate to order DME for the beneficiary. Typically, the licensed providers have been paid a fixed amount of $25 — $30 for each telemedicine evaluation conducted.
  • Beneficiaries have no control of where an order or prescription is referred.  In the cases we have handled, orders for DME have NOT been issued to a supplier, pharmacy or testing laboratory selected by the patient.  Instead, the order has been directed by the intermediary marketing company to a particular supplier, pharmacy or testing laboratory with whom the company has a business relationship.[3]
  • Unified Program Integrity Contractors (UPICs) are using data mining to identify potentially fraudulent telemedicine business relationships.  Through an analysis of billing data, UPICs have noted that some DME suppliers have billed Medicare for items based on orders issued by a physician, nurse practitioner or physician assistant who did NOT bill Medicare for an associated Evaluation and Management (E/M) service, either directly or through an appropriate reassignment relationship.
  • UPIC requests for medical records have often gone unanswered or unfulfilled.  Both UPICs and a variety of state and federal law enforcement agencies around the country have been investigating questionable telemedicine related business relationships.  One of the essential steps in investigating the propriety of these claims has included an assessment of the beneficiary’s medical records, along with the telemedicine evaluation conducted.  These medical records and intake documents are often maintained by the intermediary marketing company and have not been downloaded or maintained by the ordering physician, nurse practitioner or physician assistant. Moreover, the contracts between the parties often prohibit the physician from retaining copies of documents. In several cases we have handled, the licensed provider’s relationship with the intermediary marketing company was terminated long ago and the provider no longer has access to the beneficiary records now being requested.
  • Telemedicine providers are often unaware that a marketing company is engaging in illegal kickback activities.  Licensed providers are not usually privy to the terms of any business relationship between an intermediary marketing company and an associated DME supplier.  Both UPICs and law enforcement agencies around the country are investigating these telemedicine related business relationships.

II. Medicare Revocation Actions Based on a Provider’s Failure to Provide Access to Documents are Being Pursued by CMS Around the Country:

The failure to respond or comply with a UPIC request for records is one of the many bases[4] that CMS may assert to revoke a provider’s enrollment in the Medicare program, along with any corresponding provider agreement. As provided by 42 C.F.R. § 424.535(a)(10):

Ҥ 424.535 РRevocation of enrollment in the Medicare program.

(10) Failure to document or provide CMS access to documentation. (i) The provider or supplier did not comply with the documentation or CMS access requirements specified in § 424.516(f). . .”

As 42 C.F.R. § 424.516(f) provides:

  • 424.516 – Additional provider and supplier requirements for enrolling and maintaining active enrollment status in the Medicare program.

“(f) Maintaining and providing access to documentation. (1)(i) A provider or a supplier that furnishes covered ordered, certified, referred, or prescribed Part A or B services, items or drugs is required to –

(A) Maintain documentation (as described in paragraph (f)(1)(ii) of this section) for 7 years from the date of service; and

(B) Upon the request of CMS or a Medicare contractor, to provide access to that documentation (as described in paragraph (f)(1)(ii) of this section).

(ii) The documentation includes written and electronic documents (including the NPI of the physician or, when permitted, other eligible professional who ordered, certified, referred, or prescribed the Part A or B service, item, or drug) relating to written orders, certifications, referrals, prescriptions, and requests for payments for Part A or B services, items or drugs.

(2)(i) A physician or, when permitted, an eligible professional who orders, certifies, refers, or prescribes Part A or B services, items or drugs is required to

(A) Maintain documentation (as described in paragraph (f)(2)(ii) of this section) for 7 years from the date of the service; and

(B) Upon request of CMS or a Medicare contractor, to provide access to that documentation (as described in paragraph (f)(2)(ii) of this section).

(ii) The documentation includes written and electronic documents (including the NPI of the physician or, when permitted, other eligible professional who ordered, certified, referred, or prescribed the Part A or B service, item, or drug) relating to written orders, certifications, referrals, prescriptions or requests for payments for Part A or B services, items, or drugs.” (emphasis added).

III.  Medicare Revocation Actions for the Failure to Provide Medical Records Have Typically Sought a 10-Year Re-Enrollment Bar.

CMS extended the maximum re-enrollment bar that can be applied after a revocation from three years to ten years through a Final Rule, which was published on September 10, 2019 and became effective November 4, 2019.[5]  Although a 10-year re-enrollment bar is supposed to be reserved for cases involving serious misconduct, CMS has been actively seeking a 10-year re-enrollment bar in cases where the basis for exclusion is the failure to provide access to documentation.[6]

  • What is the impact of a Medicare revocation action?  The imposition of a 10-year re-enrollment bar can effectively destroy a health care provider’s practice.  Moreover, it will likely limit a provider’s employment options.  Additional potential consequences of having your Medicare enrollment revoked are discussed below.
  • Depending on the facts, the role you played in a telemedicine fraud case may result in a referral to the U.S. Department of Justice (DOJ) for investigation and possible prosecution. Since 1994, CMS has participated in an interagency agreement with the DOJ which allows CMS program integrity contractors (in this case, UPICs) to send health care fraud referrals directly to the DOJ without having to first route the referral through the Office of Inspector General (OIG).  Your involvement in a telemedicine related fraud case will be carefully evaluated.  For instance, did you actually conduct evaluations by phone, video or asynchronously OR did you perform an evaluation based solely on the medical information and intake documents provided to you by an intermediary marketing company?
  • You will be likely be barred from enrolling in the Medicare program for a period of 10 years. In light of the cases we have handled since the issuance of the November 4th Final Rule, it appears to be CMS’s policy to seek to impose a 10-year enrollment bar in revocation cases based on a violation of 42 C.F.R. § 424.535(a)(10).
  • You will likely be placed on Medicare’s “Preclusion List.” Individuals and entities that have been revoked from Medicare, are under an active reenrollment bar, AND CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program may qualify to be placed on the Medicare Preclusion List.  The Preclusion list is made available to Medicare Advantage and Part D plans.   If placed on the Preclusion List, an individual or entity will not be permitted to enroll in the Medicare Part C or Part D programs.
  • A Medicare revocation action may result in the revocation of your enrollment as a provider in your state’s Medicaid program. Using Texas as an example, Rule § 371.1703(a) of the Texas Administrative Code provides that:

“(a) The OIG may terminate the enrollment or cancel the contract of a person by debarment, suspension, revocation, or other deactivation of participation, as appropriate. The OIG may terminate or cancel a person’s enrollment or contract if it determines that the person committed an act for which a person is subject to administrative actions or sanctions. . . .

(b)(7) a provider that is terminated or revoked for cause, excluded, or debarred under Title XVIII of the Social Security Act or under the Medicaid program or CHIP program of any other state;[7]

  • A Medicare revocation action will result in a report being sent to the National Practitioner Databank (NPDB). As the NPDB Guidebook[8] notes, “formal or official actions such as revocation of suspension of a license, certification agreement, or contract for participation in government health care programs; reprimand; censure; or probation,” is considered to be a final adverse action and must be reported by a Federal agency.
  • A report to the NPDB may result in an investigation by your State Medical Board. A revocation action based on your failure to provide records to a UPIC may generate a collateral investigation by your state licensing board since you are likely required to maintain adequate patient records.  For instance, under Rule § 165.1(a) of the Texas Administrative Code, a licensed physician is required to maintain an “adequate medical record” for each patient that is complete, contemporaneous and legible.  Your failure to maintain a copy of the records you reviewed when making a telemedicine evaluation may constitute a violation of your obligations under the Texas Medical Practice Act. As such, you may be subject to disciplinary action.
  • A Medicare revocation of your billing privileges may result in the termination of your hospital credentialing. Many hospitals require that a physician, nurse practitioner or physician assistant be enrolled in the Medicare program (or at the very least, be eligible to enroll in the Medicare program), in order to be credentialed and granted privileges.  If you have been barred from enrollment in Medicare, you may not be eligible to obtain privileges at a hospital.
  • Termination from commercial payor agreements. Unfortunately, Medicare revocation actions are often used by commercial payors as a basis for terminating a provider from their plan.
  • Loss of employment. The collateral consequences of a Medicare revocation action can greatly limit your ability to work for a practice or entity that treats Medicare and Medicaid patients.   As a result, you may be terminated from employment.

IV.  Responding to a UPIC Request for Records:

We cannot overemphasize the seriousness of a UPIC request for records, especially when those records are related to your telemedicine evaluation of a patient’s DME needs.  Remember – UPICs are tasked with identifying suspected cases of fraud and abuse being committed against the Medicare and Medicaid programs.   Should you fail to provide records requested by a UPIC, the proposed revocation of your Medicare billing privileges may be the least of your problems.  Therefore, it is essential that you engage qualified health law counsel to represent you and guide you through this administrative process.  Liles Parker attorneys have extensive knowledge of the Medicare revocation process and have successfully represented multiple physicians and nurse practitioners in the appeal of a proposed revocation action, including those involving failure to respond to a records request.  For a free consultation, give us a call.  We can be reached at: (202) 298-8750.

Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent individuals and entities around the country in connection with administrative audits (UPIC audits / private payor audits), civil False Claims Act cases, and criminal violations of the Federal Anti-Kickback Statute and EKRA.  Are you currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1]  Often the companies identify themselves as “locum tenens” agencies, or “telemedicine providers.” Most have a contract the physician signs that (1) doesn’t permit the physician to retain any patient records, and (2) requires the physician to agree not to file any claims or bill the patient.

[2] A variety of telemedicine compliance issues arise at this stage of the agreement.  Many times, the physician does not directly speak with the patient.  The physician’s agreement with the intermediary may say that the physician is supposed to conduct their telemedicine services “in compliance with their state licensing law” but most physicians have no idea what their state law requires.

[3] Licensed providers are not usually privy to the terms of any business relationship between a telemedicine marketing company and an associated DME supplier, compound pharmacy or testing laboratory.

[4] For an overview of the various reasons that a provider’s Medicare enrollment and billing privileges may be revoked, please see our article titled 42 CFR Sec. 424.535(a) Medicare Revocation Actions — Your Medicare Billing Privileges Can be Revoked For a Host of New Reasons. Are You Facing a Medicare Revocation Action? If so, You Must Act Fast to Preserve Your Appeal Rights.(March 9, 2020).

[5] See Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process, 84 Fed. Reg. 47794 (Sep. 10, 2019).

[6] See 42 C.F.R. § 424.535(a)(10).

[7] Title 1, Part 15, Rule § 371.1703(a) of the Texas Administrative Code, “Termination of Enrollment or Cancellation of Contract.”

[8] NPDB Guidebook (October 2018), (Page E-81).

Sober Home and Recovery Residence Fraud Enforcement Efforts are on the Increase – Are Your Sober Home Business Practices Legal?

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(September 12, 2020):  This has been a rough year for sober home and recovery residence owners, operators and their health care business partners. Literally everyone has been adversely impacted by the public health crisis generated by the rapid spread of COVID-19. While most health care and providers obtained a temporary reprieve from, Medicare, Medicaid and private payor administrative audits[1], many state and federal law enforcement agencies (such as the Federal Bureau of Investigation (FBI), the Department of Health and Human Services, Office of Inspector General (OIG), state Medicaid Fraud Control Units (MFCUs) have continued to investigate allegations of wrongdoing against sober home and recovery residence owners, operators, managers and their health care business partners.  Moreover, these investigative agencies have continued to make referrals to federal and state prosecutors for possible civil and / or criminal enforcement.  This article provides a review of the government’s sober home and recovery residence prosecution efforts and examines the current enforcement landscape.

I.  Alcohol and Drug Addiction Treatment Industry Overview:

The care and treatment of individuals with alcohol and drug abuse issues is estimated to cost $42 billion in 2020.  More than 14,000 treatment and aftercare facilities current treat more than 3.7 million individuals in the United States.[2]  With the expansion of insurance eligibility under the Affordable Care Act,[3] the number of individuals who covered by health insurance has continued to grow over the last decade.

A broad continuum of care is available to individuals seeking treatment for alcohol and drug addiction and dependency issues.  The most intensive level of care is typically provided in an inpatient setting.  Patients residing in inpatient treatment centers are often still dependent on alcohol or drugs and need the intensive level of care to complete a supervised detoxification (detox) program.[4]  After successfully completing a supervised detox program, these individuals are typically discharged from an inpatient treatment facility to a lower level of care such as afforded in a Partial Hospitalization Program (PHP), Intensive Outpatient Program (IOP),[5] or Outpatient Program (OP).  Individuals being treated on an outpatient basis (whether PHP, IOP or OP) often elect to live in a drug and alcohol-free group home or similar facility with other individuals going through recovery.  These supportive, drug and alcohol-free facilities are often referred to as a:

  • Sober Home.
  • Halfway House.
  • Recovery Residence.

In this article, we will collectively refer to the three recovery facilities listed above as a sober home or recovery residence. These facilities are primarily group homes and residential facilities comprised of individuals with a shared history of alcohol or drug abuse who are now in recovery.  Individuals who reside in a sober homes or a recovery residence typically pay rent to live in this supportive, group setting.

II.  Sober Home and Recovery Residence Business Relationships Can Lead to Violations of the Anti-Kickback Statute or the Eliminating Kickbacks in Recovery Act:

Living in a sober home or recovery residence has traditionally served as an essential step in the drug and alcohol recovery process.  While most sober homes do not directly provide and bill insurance for clinical services, the residents of a sober home or recovery residence have a number of ongoing primary care and drug screening needs that must be met.  For instance, recurrent laboratory testing may be needed to verify that a resident is, in fact, remaining alcohol and drug free.  A number of sober homes have therefore engaged a licensed physician to serve as the facility’s Medical Director to oversee and order periodic drug screening tests to verify an individual’s compliance with the rules.[6]  Drug screening tests (such as a urinalysis) conducted on insured patients are then billed by the testing In addition to engaging a Medical Director, a sober home may also establish a business relationship with a testing laboratory and with other types of medical providers (such therapists, counselors, DME suppliers).  When a sober home’s Medical Director orders drug screening for residents, it isn’t unusual for a favored testing laboratory to collect blood and urine samples from residents at their sober home.   Physicians, testing laboratories and other health care providers and suppliers would then bill a sober home resident’s insurance company (such as Medicare, Medicaid, TriCare, FEHBP, Railroad Retirement or a private payor).[7]   Unfortunately, this is where the sober home business model typically runs afoul of state and federal regulatory and statutory requirements. Depending on the facts, the conduct could represent a violation of the federal Anti-Kickback Statute.

Kickbacks arrangements between referring sober homes / recovery residences and testing laboratories are problematic even if only private payors are affected by the improper conduct.  Under the Eliminating Kickbacks in Recovery Act (EKRA)(covered in section 8122 of “The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” (SUPPORT Act)), it is unlawful to solicit, receive or pay any remuneration (including any kickback, bribe or rebate) directly or indirectly, in return for referring a patient or patronage to a recovery home, clinical treatment facility or laboratory. This is intended to address a number of opioid related issues and it extends these prohibitions to services covered by a private payers as Medicare, Medicaid and other government programs. In addition, since the language of the act is very broad and the term laboratory is not limited to just those laboratories associated with substance abuse services, enforcement actions under EKRA could potentially reach laboratories outside the scope of substance abuse treatment. It could also implicate sales and marketing procedures that have been standard components of many laboratory business models and criminal sanctions under EKRA include fines up to $200,000 and up to 10 years imprisonment for kickbacks with respect to services covered by any type of health care benefit program in or affecting interstate or foreign commerce.

III. Sober Home / Recovery Home Risk Areas:

In recent years, federal auditors have dedicated considerable resources to their assessment of sober homes and recovery residence.  As the Government Accountability Office (GAO) found, the national prevalence of sober homes (referred to as “recovery residences” in GAO’s report) is unknown because there is not comprehensive data that can be relied on to arrive at this figure.[8] The GAO found that four of the five states it reviewed had conducted (or were in the process of conducting) law enforcement investigation of:

“unscrupulous behavior and potential insurance fraud related to recovery homes and outcomes of some of these investigations included criminal charges and changes to health insurance policies.”[9]

While not exhaustive, there are a number of common regulatory fraud risk areas that have been identified by state and federal investigators and prosecutors when investigating treatment centers, sober homes and recovery residences.  For example:

Fraudulent Coding. (Massachusetts Medicaid False Claims Act — M.G.L.c. 118E, § 21A ET SEQ.).  In this Massachusetts case, a physician and his addiction treatment clinic have been indicted for allegedly committing health care fraud against MassHealth, the state’s Medicaid program.  One of the allegations is that the physician billed for the administration of Vivitrol and was able to circumvent the limits on Vivitrol reimbursement by coding some of the Vivitrol treatments as chemotherapy treatments rather than as a treatment to prevent a relapse associated with alcohol or drug abuse.   The government has not detailed how the defendants were able to get past the Medicaid payment restrictions.

Patient Brokering. (Massachusetts “All-Payor” State Anti-Kickback Statute — G.L.c. 175H, §3)(Federal Anti-Kickback Violations — 42 U.S.C. § 1320a-7b(b)(1)(A): When investigating allegations of “patient brokering,” a representative of the Massachusetts Attorney General’s Office testified before Congress that the AG’s Office had been receiving reports that state residents have been lured to out-of-state addiction treatment providers by paid recruiters who promised them free travel to an addiction treatment center in a warm-weather state. When the patients discovered that the treatment they were to receive was low quality or nonexistent, they were often left thousands of miles from home with no health insurance, no access to the medical care they needed, and no resources to return home. In the most tragic cases, these young people suffered fatal overdoses following their continued opioid use without treatment.”[10]  As a result, the Massachusetts AG’s Office opened criminal investigations into addiction treatment fraud and issued a Consumer Advisory, alerting patients and their families that they should be wary of unsolicited offers for free out-of-state addiction treatment.

Illegal Business Relationships (Involving Claims Submitted to Federal / State Payors). (Federal Anti-Kickback Violations — 42 U.S.C. § 1320a-7b(b)(1)(A)).[11]: Generally, sober home and recovery residences do not qualify as health care providers or suppliers and are unable to be credentialed and participate in health benefits programs.  As a result, they cannot bill insurance payors. Some sober home and recovery residence owners and operators have entered into unscrupulous, often illegal referral business relationships with physicians, nurse practitioners, physician assistants, testing laboratories, and others. In exchange for the referral of their residents for medical and clinical services (often in the form of drug screen testing), sober home and recovery home owners, operators (and affiliated Medical Directors) have received a “referral fee” or kickback from the servicing health care provider or supplier who then bills the resident’s insurance company for payment.

Illegal Business Relationships (Involving Submitted to Private Payors).  (Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories — 18 U.S.C. § 220): Despite the fact that EKRA has now been in place for almost two years,  only a handful of cases have been prosecuted under EKRA.  While illegal sober home conduct was not cited, a recent EKRA case out of the District of New Jersey did allege that a drug treatment center illegally paid a marketing company for patient referrals. To identify patients, the marketing company used a nationwide network of recruiters who were instructed to identify individuals addicted to alcohol or drugs AND were covered under a health care benefit program.  The drug treatment center allegedly paid the marketing company approximately $5,000 for each referral.  The marketing company then supposedly paid a percentage of the referral funds received to its recruiters.  Notably, the government alleged that the drug treatment facility tried to disguise the kickbacks as a “monthly fee” paid to the marketing company.  

Business Relationships Resulting in the Violation of the Health Care Fraud and Anti-Kickback Statutes. (Conspiracy to Commit Health Care Fraud — 18 U.S.C. §1349).[12] In this recent case a multi-agency task force[13] investigated the business practices of a Florida osteopathic physician in his role as “Medical Director” for more than 50 addiction treatment facilities and sober homes.  Unlike most relationships where a physician has been engaged to serve as Medical Director, the physician in this case was paid only a nominal salary.  Instead, federal prosecutors have alleged that the physician benefited from the relationship by getting access to a “stable” of insured addiction treatment patients residing in sober homes and addiction treatment centers.   As Medical Director, the physician in this case is alleged to have signed more than 136 standing orders for medically unnecessary urinalysis tests.  These urinalysis tests were processed by testing laboratories that sometimes paid kickbacks to referring sober homes and addiction treatment centers.  As the Criminal Complaint states:  “In addition, the entire referral network made possible by [Medical Director] authorizing such false and fraudulent testing for these addiction treatment centers, sober homes, and testing laboratories by his signing of standing orders often facilitated kickback relationships between these parties and individual recruiters or brokers for these entities, as the sober home and treatment center owners (through these brokers) received kickbacks from the owners and operators of the laboratories in return for sending specimens their way for testing.”  Ultimately, the government has further alleged the standing orders signed by the government resulted in the improper billing of hundreds of millions of dollars of medically unnecessary urinalysis tests and other fraudulent treatments.  Finally, prosecutors have claimed that the defendant Medical Director did not meaningfully review the results of the tests he ordered.  The government has estimated that the fraudulent conduct resulted in approximately $681 million for urinalysis laboratory tests and other medical services billed to the Medicare program and to private payors.  Of this total, approximately $121 million was paid to government and private payors.  The defendant physician (serving as Medical Director) is currently charged with Conspiracy to Commit Health Care Fraud and Wire Fraud (18 U.S.C. §1349).  The government has also filed a Criminal Forfeiture (18 U.S.C. §982(a)(7) count against the physician in an effort to recover to losses incurred by federal health care benefit programs due to the fraud.

Ordering of Medically Unnecessary Controlled Substances.Distributing Controlled Substances Without a Legitimate Medical Purpose. (21 U.S.C. § 841(a)(1).[14]  In a recent Florida case, an internal medicine physician and a licensed mental health counselor were indicted for their roles[15] in the distribution of controlled substances that were not medically necessary and had no legitimate medical purpose.  As the indictment statement, the defendant physician knowingly and intentionally distribute and dispense outside the scope of professional practice and not for a legitimate medical purpose, a controlled substance.”

Aiding or Abetting in the Performance of Illegal Conduct(Principals — 18 U.S.C. § 2).  In the same Florida case discussed above, a licensed mental health counselor was implicated in the illegal dispensing conduct of the principal offender, the ordering physician.

Wrongfully Prescribing Controlled Substances After a Medical License or Controlled Substance Registration has been Suspended(Conspiracy to Unlawfully Distribute a Schedule III Controlled Substance — 21 U.S.C. 846).[16]   In one case, a physician employed as the Medical Director at a substance abuse treatment center was charged by indictment with one count of conspiracy to distribute controlled substances in relation to his employment at the center. While serving as Medical Director, his medical license was suspended.  Nevertheless, the physician continued to prescribe controlled substances for individuals at the treatment center over a five-month period.

IV.  Conclusion:

The business practices of sober homes and recovery residences are under microscope.  It is therefore essential that you carefully review your business relationships and practices to ensure that you are complying with state and federal regulations and statutes.  Steps you can take include, but are not limited to:

Develop and implement an effective Compliance Program for your sober home / recovery residence.

Properly train your staff on their duties and obligations under the law.

Exercise caution before entering into any business relationships with drug treatment centers, physicians, DME companies, and other entities to whom your sober home / recovery residence may make referrals.  Additionally, watch our for marketing companies who may want to send you possible patient referrals.  Contact your attorney before entering into these relationships! 

Conduct a GAP analysis of your business practices.

DOJ is holding owners, operators and management officials to a level of responsibility consistent with their position in the organization.

Educate your owners, operators and managers regarding the “Yates Memo” and DOJ’s interest in individual accountability.

Have your contracts and agreements reviewed by health law counsel before executing the documents.

Finally, if you or your sober home / recovery residence is ever investigated, it is critical that you engage qualified health law counsel to represent your interests. Need assistanceGive us a call for a free consultation:  1 (800) 475-1906.

Robert W. LilesRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent individuals and entities around the country in connection with administrative audits (UPIC audits / private payor audits), civil False Claims Act cases, and criminal violations of the Federal Anti-Kickback Statute and EKRA.  Are you currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1] On March 30, 2020, the Centers for Medicare and Medicaid Services (CMS) suspended most Medicare Fee-For-Service (FFS) medical reviews because of the COVID-19 pandemic. Many private payors also curtailed their audit activities for several months.

[2] The U.S. Addiction Rehab Industry (January 2020).  A summary of this report can be found at: https://www.marketresearch.com/Marketdata-Enterprises-Inc-v416/Addiction-Rehab-12943155/?progid=91619

[3] The Affordable Care Act was enacted on March 23, 2010. Pub. L. 111- 148.

[4] When an individual stops using drugs or taking alcohol, detoxification (commonly referred to a “detox”) occurs.  Detox is essentially the process of allowing drugs and alcohol to be removed or flushed out of an individual’s body.  Inpatient detox programs are designed to medical and mental support to an individual while he / she goes through the withdrawal process.

[5] Under the guidelines issued by U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Center for Substance Abuse Treatment (SAMHSA) and the American Society of Addiction Medicine (ASAM), Intensive Outpatient Programs (IOPs) are formal abuse treatment programs that are required to be overseen by a qualified medical professional, and to have a formal treatment plan to be used in the patient’s care.

[6] A sober home’s Medical Director may also offer primary care services to residents.

[7] Both governmental and private payor health plans qualify as “health care benefit programs” under 18 U.S.C. §24(b).

[8] Government Accountability Office (GAO) report entitled “SUBSTANCE USE DISORDER – Information on Recovery Housing Prevalence, Selected States’ Oversight, and Funding.” (GAO-18-315) (March 2018, Page 6).  https://www.gao.gov/assets/700/690831.pdfA representative of GAO was subsequently asked to testify before the Committee on Finance, United States Senate on October 24, 2019 (GAO-20-214T). GAO’s report on this testimony is available at:  https://www.gao.gov/assets/710/702271.pdf

[9] GAO-18-315, page 7.

[10] Hearing Before the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce, House of Representatives, Testimony of Eric M. Gold. Serial No. 115-87, (December, 12, 2017).

[11] Federal Anti-Kickback Violations, 42 U.S.C. § 1320a-7b(b)(1)(A.

[12] Attempt and Conspiracy, 18 U,S,C, §1349.

[13] Comprised of the FBI, the Drug Enforcement Administration (DEA), and the Internal Revenue Service – Investigative and Forensic Service (IRS).

[14] See 21 U.S.C. § 841(a)(1).

[15] In this case, the licensed mental health counselor was implicated in the illegal dispensing conduct through the operation of 18 U.S.C. §2.  As the statutory provision provides:

“(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal. 

(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.”

Aider and abettor liability is distinct from accessory after the fact under 18 U.S.C. § 3. An aider and abettor, unlike an accessory after the fact, is punishable as a principal.

[16] See 21 U.S.C. 846

Medicaid After-Hours Claims Audits (CPT 99050 & CPT 99051) by State Medicaid Regulators are Continuing.  Are Your Medicaid After-Hours Claims Compliant?

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Medicaid After-Hours Claims Audits(June 3, 2020):  By 2027, national health spending is expected to exceed $6 trillion.  Notably, health spending will rise from a share of approximately 17.9% of the Gross National Product (GNP) to 19.4% during this time period.[1]  Understandably, Medicare and Medicaid program officials have ramped up their efforts to reign-in the costs of these government payor programs.  One of the continuing areas of concern that has contributed to the high cost of Medicaid services is the use of hospital emergency room services by Medicaid recipients for the care of non-urgent medical issues.  In response, many State Medicaid plans (especially Medicaid Advantage plans) have taken steps to make it easier for plan beneficiaries to obtain care by their primary care provider after normal business hours rather than be forced have to seek significantly more expensive hospital emergency room assistance during evenings, weekends and holidays, when their primary caregiver’s offices would normally be closed. This article reviews the billing of Medicaid after-hours claims (CPT 99050, CPT 99051) in more detail and discusses the types of deficiencies that have been noted by regulators when auditing these services.

I.  Background of the Medicaid After-Hours Claims Issue:

The non-emergency use of hospital emergency room services by Medicaid participants has been a long-standing problem of almost four decades.  As early as 1983, the Department of Health and Human Services (HHS), Office of Inspector General (OIG) noted that there was a high rate of hospital emergency room misuse by Medicaid recipients who would utilize high-cost emergency rooms for the care and treatment of non-emergency medical issues. At that time, it was estimated that over one-half to two-thirds of Medicaid emergency room visits” were non-emergent.[2] As the OIG’s 1983 report further noted, Medicaid recipients were found to be visiting hospital emergency rooms for non-urgent care largely because other sources of care [were] either unavailable or inaccessible to the them.”  The OIG concluded that at least half of Medicaid beneficiary emergency room visits could have been more appropriately treated in community care settings. Notably, the root cause of the problem was clearly understood by the government long ago:

The use of emergency rooms for non-urgent care results primarily from the recipient’s lack of access to primary care during or after office hours.  Often the Medicaid recipient does not have a doctor that they see on a regular basis.  Recipients may not live near a participating physician or may lack transportation to get to the physician’s office.  A recipient may not be able to go to the physician’s office during normal office hours, and may have difficulty reaching the physician after hours.[3] (emphasis added).

II. State Medicaid Coverage Issues of CPT Code 99050 and CPT Code 99051:

If a participating provider treats a Medicaid recipient after normal business hours, a number of State Medicaid plans now permit a participating provider to bill an appropriate Evaluation and Management (E/M) code AND bill CPT 99050 or CPT 99051 as an additional charge to reflect the fact that after-hours care was provided.  As the 2019 American Medical Association Current Procedural Terminology manual reflects, CPT 99050 and CPT 99051 are defined as follows:

  • CPT 99050Service(s) provided in the office at times other than regularly scheduled office hours, or days when the office is normally closed (i.e., holidays, Saturday or Sunday), in addition to basic service.
  • CPT 99051Service(s) provided in the office during regularly scheduled evening, weekend, or holiday office hours, in addition to basic service.

The Office of Inspector General provided the following example to demonstrate proper billing of CPT 99050:

“[A] physician’s office may be open from 9 a.m. to 5 p.m., Monday through Friday. A physician treating a beneficiary in that office at 7 p.m. on a Thursday may bill for CPT code 99050 in addition to the evaluation and management code for the visit.[4]  

With the incorporation of these codes into their payment schemes, State Medicaid plans have effectively encouraged primary care providers to make themselves, and / or members of their staff, available beyond regularly scheduled office hours, and weekends, to care for Medicaid patients.  The expanded availability of these Medicaid providers has therefore made it less likely that Medicaid patients would seek care for non-emergent medical conditions from hospital emergency rooms.  Unfortunately, the coding and billing requirements applied by State Medicaid regulators often unwritten and / or in direct contradiction of what a Medicaid provider has been told by one or more Medicaid Advantage payor plans.  As a result, the billing of CPT 99050 and CPT 99051 has led to a number of State investigations and audits of these codes.

III.  Overview of CPT 99050 and CPT 99051 Medicaid After Hours Claims Audit Enforcement Efforts:

A number of State Medicaid regulatory authorities have been actively auditing the claims practices of physicians and other providers who have been billing for after-hours services using CPT 99050 and CPT 99051.  While the audit findings have varied from one state to another, the government has generally argued that providers have incorrectly billed for after-hours services when such services did not qualify for coverage and payment.  Examples of state Medicaid after-hours claims audit initiatives include the following:

Texas

  • Despite the fact that Texas physicians and practices have seen dramatic drops in revenues since March 2020 due to the COVID-19 crisis, the Texas Health and Human Services Commission, Office of Inspector General (HHSC-OIG) have continued to aggressively audit CPT 99050 claims billed by Medicaid providers. Notably, many of these audits have focused on physician practices in the Rio Grande Valley.  As of May 2020, Medicaid after-hours claims audits remain ongoing throughout Texas.
  • Last year, HHSC-OIG reached a settlement with a physician in Pharr, Texas for $297,549 for the alleged improperly billing of Medicaid after-hours claims. Government investigators claimed that the provider was improperly reimbursed for Medicaid after-hours services, in contravention to the billing requirements set out in the provider’s Medicaid managed care contract and HHSC program policy.[5]
  • That same month, the government regulators reached a similar settlement with a physician practice in Mission, Texas in the amount of $61,310. [6]
  • Notably, Texas has recently upped-the-ante, so to speak, by issuing a “Clarification Statement” meant to further explain its coverage of Medicaid after-hours claims. Effective February 1, 2020, Texas Medicaid & Healthcare Partnership (TMHP)[7] now takes the position that:“After-hours procedures are limited to one per day, same provider.” [8]

What is meant by this “Clarification Statement”?  Great question.  At this time, TMHP has not issued any additional guidance setting out the parameters of this new rule.

New Jersey

  • In this case, the New Jersey Office of the Comptroller, Medicaid Fraud Division, (New Jersey Comptroller) alleged that one of its Medicaid providers had improperly billed 99050 for services which it provided during “regular office hours.”[9] In its decision, the New Jersey Comptroller argued that because CPT 99050 was an add-on code, it should not be utilized and billed frequently, and that the provider’s frequent use of the code indicated improper usage.
  • To determine the practice’s regular business hours, the New Jersey Comptroller reviewed the hours of operation that were listed in the credentialing documents which the provider submitted to enroll in the payor’s managed care network, and the hours of operation listed on the payor’s online provider portal. The New Jersey Comptroller then compared these times against the times and dates of service which were listed in the claims submitted by the provider to determine whether the provider regularly treated patients on weekends and federal holidays (July 4th, Labor Day, Thanksgiving, Christmas, New Year’s Day, Easter, and Memorial Day).  After completing this analysis, the New Jersey Comptroller argued that dates and times which were submitted with the Medicaid provider’s claims showed that the Medicaid provider regularly operated during weekends and federal holidays, and that these times were considered regular office hours for purposes of the after-hours code.
  • The New Jersey Comptroller concluded that the Medicaid provider had improperly used CPT 99050 despite the fact that the Medicaid payor had reassured the provider that it was properly billing the code, and had awarded the Medicaid provider a $100,000 bonus for saving the payor over $600,000 in emergency room visits. Although the New Jersey Comptroller acknowledged the provider’s receipt of this award, it concluded that the practice’s receipt of this award did not overcome the practice’s allegedly improper use of CPT 99050.

Alabama

  • Although not as recent as the cases currently being pursued in Texas and New Jersey, it is worth noting that a Federal case out of the Northern District of Alabama held that a healthcare provider had improperly used the after-hours billing code for weekend visits when the clinic’s normal business hours, as advertised on the clinic’s website and written to all insurance companies, were 7 days a week from 8:00 am to 6:00 pm.[10]

South Carolina

  • The South Carolina Department of Health & Human Services advised that providers with regular scheduled evening and weekend office hours should not use CPT 99050 for services provided during those times or for treating patients whose visits lasted longer than the facility’s posted hours.[11]

Connecticut

  • A Connecticut Medicaid pediatric practice, agreed to pay $65,378 to settle allegations that it violated the False Claims Act by improperly billing after-hours billing code CPT 99050.[12] The U.S. Attorney’s Office for the District of Connecticut alleged that the practice had improperly billed the after-hours code when the practice was open for business and regularly scheduling patients for same-day sick visits.

IV.  Responding to an Audit of Your Medicaid After-Hours Claims:

While the basic rules for the billing of after-hours codes are well established, the way that coverage and payment requirements are being interpreted by State Medicaid regulators widely vary from one jurisdiction to another.  Some of the problems we are seeing include, but are not limited to the following:

  • State Regulators Don’t Always Go By Your Agreements with the Medicaid Advantage Plans. Medicaid providers typically negotiate what constitutes after-hours with each Medicaid Advantage payor plan. The negotiated understanding of what constitutes after-hours is often expressly defined in the provider’s contract.  It is not uncommon for the definition of after-hours to differ from one Medicaid Advantage plan to another.  Despite the fact that a provider may have reached an agreement with a provider, State Medicaid regulators conducting audits of CPT 99050 and CPT 99051 have often disregarded the definition set out in the contract and denied payment of these claims, citing a number of reasons why the claims don’t qualify for coverage and payment.
  • Incomplete Documentation. A number of the cases we have reviewed have involved health care practices who have failed to keep and / or maintain records of when a patient arrived and left their offices.  The failure to keep proper records will inevitably lead to denials of CPT 99050 and CPT 99051.
  • Failure to Maintain a Patient Signature Sheet. Even if your practice electronically checks in a patient when they arrive at your office, it is important to also obtain a patient signature which reflects when the patient arrived.
  • Inconsistent Posting of Office Hours. Regardless of what your Medicaid Advantage provider contract may state with respect to what constitutes after-hours, you may find that signage, online posts, and / or a practice’s “Google Your Business” listing indicates that a practice is supposedly open at a time that is consider after-hours by a Medicaid Advantage plan.   In the event of Medicaid claims audit, the government may try to argue that since an online listing indicated that a time was within your regular business hours, the practice cannot be paid for CPT 99050 and CPT 99051.

Ultimately, the way these cases are being handled appears to vary from state to state.  How should you respond if your Medicaid after-hours claims are audited?  We recommend you immediately contact experienced health law counsel to assist with the defense of these claims. For a free consultation, call:  1 (800) 475-1906.

Robert W. LilesRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with claims audits and investigation.  Are your “After-Hours” claims being audited by State Medicaid Regulators?  Give us a call.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

 

 

 

 

[1] CMS Office of the Actuary Releases 2018-2027 Projections of National Health Expenditures, February 20, 2019.  https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf

[2] Testimony of Michael Mangano, Deputy Inspector General, before the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce, House of Representatives, on February 28 and March 26, 1992. (See page 422).  During his testimony, Mr. Mangano cited OIG’s September 1983 report entitled “Non-Emergency Use of Hospital Emergency Departments by Medicaid and Medicare Beneficiaries.”  https://archive.org/stream/medicaidprogrami00unit/medicaidprogrami00unit_djvu.txt

[3] Ibid, page 424.

[4] Id.

[5] See OIG Medicaid Program Integrity recovers $14 million in third quarter, OIG HHSC (July 12, 2019), https://oig.hhsc.texas.gov/latest-news/oig-medicaid-program-integrity-recovers-14-million-third-quarter

[6]    Id.

[7] The Texas Medicaid & Healthcare Partnership (TMHP) is the claims administrator for Texas Medicaid under contract with the Texas Health and Human Services Commission.

[8] TMHP is still in the process of adding this language to Texas Medicaid Provider Procedures Manual, Medical and Nursing Specialists, Physicians, and Physician Assistants Handbook, and the Children with Special Health Care Needs (CSHCN) Services Program Provider Manual.

[9] Final Audit Report – Ocean County Internal Med. Assoc., P.C.’s Use of AMA’s CPT Code 99050, N.J. Office of Comptroller (July 11. 2018), at 11-12, https://www.nj.gov/comptroller/news/docs/ocima_far.pdf.

[10] No. CV 5:10-cv-2843-IPJ, 2014 U.S. Dist. LEXIS 195885, at *6 (N.D. Ala. July 29, 2014), aff’d, United States ex rel. Salters v. Family Care, Inc., No. 5:10-cv-2843-LSC, 2016 U.S. Dist. LEXIS 173433 (N.D. Ala. Dec. 15, 2016).

[11] See Provider Perspective, 1 S.C. Dep’t of Health and Hum. Serv., at 1 (2008), at https://www.scdhhs.gov/internet/pdf/provider%20newsletterfinal.pdf.

[12] See Pediatric Practice Pays $65,378 to Settle Allegations Under the False Claims Act, FBI (May 27, 2010), https://archives.fbi.gov/archives/newhaven/press-releases/2010/nh052710.htm.

The Coronavirus Aid, Relief and Economic Security (CARES) Act: Provisions Relevant to Healthcare Providers

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By Michael Cook, Jennifer Papapanagiotou & Andy Lynch –  Partners at Liles Parker, PLLC.

(March 31, 2020):  On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act[1] passed the House of Representatives by a voice vote. The President then signed the bill into law. The bill is the third round of federal government support in the wake of the coronavirus public health crisis and associated economic fallout, succeeding the $8.3 billion in public health support passed two weeks ago and the Families First Coronavirus Response Act.  Liles Parker has published a series of articles highlighting the waivers and other actions taken by the Centers for Medicare & Medicaid Services and other Federal and State agencies to ease the burden on healthcare providers during the COVID-19 public health emergency.[2]  This article is the first in a two-part series that will highlight some of the more significant provisions of the Cares Act.

I.   Support for Healthcare Providers

  • Section 3211, Supplemental Awards for Health Centers: The CARES Act provides for supplemental awards for FY 2020 for federally qualified health centers, including an additional $1,320,000,000 for the prevention, diagnosis, and treatment of COVID-19 or the detection of SARS-CoV-2.
  • Sections 3212 – 3213, Reauthorizations of HRSA Rural Development and Telehealth Network Grant Programs: The Act reauthorizes HRSA’s Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement grant programs, as well as the Telehealth Network and Telehealth Resource Center grant programs.
  • Section 3214, Modernization of the Public Health Service: The legislation creates a Ready Reserve Corps to ensure that there are enough doctors and nurses ready to respond to public health emergencies like COVID-19.
  • Section 3215, Limitation of Liability for Volunteer Health Professionals During COVID-19 Emergency Response: This section holds harmless from liability under federal or state law, health care professionals who volunteer their service during the public health emergency for the COVID-19 pandemic declared by the Secretary of HHS.  There are a number of conditions that must be satisfied for this limitation of liability to be effective.

Among these, the limitation of liability covers only professionals who are truly volunteers and who do not receive compensation in the course of providing health care services in the diagnosis or treatment of COVID-19.  The professional must be acting within the scope of her/his license, registration, or certification under the State of licensure/certification, and may not exceed the scope of the license/certification of similar professionals in the State in which the action or omission occurs.  The limitation of liability does not cover willful or criminal misconduct, gross negligence and other similar types of flagrant misconduct.

The provision applies only to conduct that occurs on or after the date of enactment of the CARES Act and is only in effect during the period of the public health emergency declared by the Secretary during the pandemic.

  • Section 3216, Flexibility for Members of the National Health Service Corps During the Emergency Period: During the period of the emergency declaration, this provision allows the Secretary to temporarily re-assign members of the National Health Services Corps to provide service outside of the areas to which they have been assigned to respond to the COVID-19 pandemic. The assignment would need the member’s voluntary agreement and would need to be “within a reasonable distance” of the original assignment, and the member would need to maintain the number of hours originally required of her/him.    

II.   Provisions Affecting Coverage and Payment Under the Medicare & Medicaid Programs

  • Section 3701, Health Savings Accounts for Telehealth Services: This section allows a high-deductible health plan (HDHP) with a health savings account (HSA) to cover telehealth services prior to a patient reaching the deductible, increasing access for patients who may have the COVID-19 virus and protecting other patients from potential exposure.
  • Section 3702, Over-the-Counter Medical Products without Prescription: This section allows patients to use funds in HSAs and Flexible Spending Accounts for the purchase of over-the-counter drugs and menstrual care products without a prescription from a physician. This section appears to reverse the ACA and makes permanent the over-the-counter drug changes during the 2020 plan year and after.
  • Section 3703, Expanding Medicare Telehealth Flexibilities: This section eliminates the requirement included in the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (Public Law 116-123) that limits the Medicare telehealth expansion authority during the COVID-19 emergency period to situations where the physician or other professional has treated the patient in the past three years. This enables beneficiaries to access telehealth, including in their home, from a broader range of providers, reducing COVID-19 exposure for the duration of the public health emergency.
  • Section 3704, Allowing Federally Qualified Health Centers and Rural Health Clinics to Furnish Telehealth in Medicare: This section allows, during the COVID-19 emergency period, Federally Qualified Health Centers and Rural Health Clinics to serve as a distant site for telehealth consultations. A distant site is where the practitioner is located during the time of the telehealth service. This section will allow FQHCs and RHCs to furnish telehealth services to beneficiaries in their home. Medicare will reimburse for these telehealth services based on payment rates similar to the national average payment rates for comparable telehealth services under the Medicare Physician Fee Schedule. It will also exclude the costs associated with these services from both the FQHC prospective payment system and the RHC all-inclusive rate calculation.
  • Section 3705, Expanding Medicare Telehealth for Home Dialysis Patients: This section eliminates a requirement during the COVID-19 emergency period that a nephrologist conduct some of the required periodic evaluations of a patient on home dialysis face-to-face, allowing these vulnerable beneficiaries to get more care in the safety of their home.
  • Section 3706, Allowing for the Use of Telehealth during the Hospice Care Recertification Process in Medicare: Under current law, hospice physicians and nurse practitioners cannot conduct recertification encounters using telehealth. This section allows, during the COVID-19 emergency period, qualified providers to use telehealth technologies in order to fulfill the hospice face-to-face recertification requirement.
  • Section 3707, Encouraging the Use of Telecommunications Systems for Home Health Services in Medicare: This section requires the Department of Health and Human Services (HHS) to issue clarifying guidance encouraging the use of telecommunications systems, including remote patient monitoring, to furnish home health services consistent with the beneficiary care plan during the COVID-19 emergency period.
  • Section 3708, Improving Care Planning for Medicare Home Health Services: This provision enables nurse practitioners, clinical nurse specialists, and physician assistants to order home health services, and certify and recertify patients for home health care. These changes also apply to Medicaid and become effective when HHS publishes implementing regulations, which must be within six months of the enactment of the CARES Act.  Unlike many of the provision of the Act, this provision is permanent and survives the end of the emergency.
  • Section 3709, Adjustment of Sequestration:  The CARES Act suspends the mandatory 2% global reductions under the sequestration order for the period May 1 through the remainder of calendar year 2020.
  • Section 3710, Medicare Hospital IPPS Add-On Payment for COVID-19 Patients During Emergency Period: The Act increases DRG weights by 20% for patients diagnosed with COVID-19 during the emergency period.
  • Section 3711, Increasing Access to Post-Acute Care During the Emergency Period: The Act waives certain requirements for inpatient rehabilitation facilities (IRFs) and long-term acute care hospitals (LTCHs).  For IRFs, the provision waives the requirement that a patient receive at least 15 hours of therapy per week.  For LTCHs, the provision waives the requirement of a payment adjustment where an LTCH does not have a discharge percentage of 50% of patients who would meet the eligibility requirements during the emergency period.  The provision also waives the site-neutral payment rate for discharges occurring during the emergency period that are in response to the public health emergency.
  • Section 3712, Revising Payment Rates for DME Under Medicare During the Emergency Period: This Section prohibits scheduled payment reductions in Medicare DME during 2020 and the emergency period.
  • Section 3715, Providing Home and Community-Based Services in Acute Care Hospitals:  A number of waivers under sections 1915 and 1115 of the Social Security Act provide for home and community-based services for individuals who otherwise would require care in a hospital, nursing facility, or ICF/MR.  This provision allows states to cover these services to individuals under certain of these waivers while they are in an acute care hospital if they meet certain conditions, including that they are identified in the individual’s care plan, not provided through the hospital, not a substitute for services that the hospital is otherwise required to provide, and are designed to ensure a smooth transition to the community and preserve the individual’s functional abilities.
  • Section 3719, Expansion of Medicare Hospital Accelerated Payment Program During COVID-19 Public Health Emergency: During the period of the emergency, this provision expands the accelerated hospital payment program by allowing acute care hospitals, cancer hospitals, children’s hospitals, and critical access hospitals (CAHs) to apply for up to 6-months’ advance payment of up to 100%, and for CAH’s 125%, of anticipated payments.  The provision also provides for 120 days before claims are offset to recoup these payments and not less than 12 months after the date of the first accelerated payment before the outstanding balance must be paid in full.

Administrative Implementation to Encompass All Providers:  On March 28, 2020, CMS published a press release and a Fact Sheet that expanded the availability of the accelerated advance payment program to all Medicare participating health care providers and suppliers.  These advance payments will be based on historical payments.  The Press Release states that “… [t]he payments can be requested by hospitals, doctors, durable medical equipment suppliers and other Medicare Part A and Part B providers and suppliers.”  The applicants must: have billed Medicare for claims within 180 days of the request; not be in bankruptcy; not be under active medical review or program integrity investigations; and not have delinquent Medicare overpayments.  Applications are made to the MACs, and CMS anticipates that payments will be issued within seven days of a request.  Providers described in the legislation, above, can request payments for an amount for up to a six-month period, while other types of providers can request up to a three-month period.  The Fact Sheet provides further instructions on the process.[3]

  • Section 3720, Delaying Requirements for Enhanced FMAP to Enable State Legislation Necessary for Compliance: The The Families First Coronavirus Relief Act increases State Federal assistance matching percentages (FMAP) percentages by 6.2% during the calendar quarters that encompass the emergency period if the State meets certain conditions, one of which was that it did not increase premiums in excess of what they were on January 1, or impose new premiums, during this period.  This provision gives any state that has raised or imposed such premiums since January 1, a thirty-day delay in the enforcement of that requirement – presumably to provide the State an opportunity to come into compliance without losing the increased matching rate.

III.   Health and Human Services Extenders

  • Section 3811, Extension of Money Follows the Person Rebalancing Demonstration: The CARES Act extends and provides funds for the demonstration through November 30, 2020.
  • Section 3812, Extension of Spousal Impoverishment Protections: This section of the Act extends certain protections from spousal impoverishment through November 30, 2020 to help a spouse of an individual who qualifies for nursing home care to live at home in the community.
  • Section 3813, Delay of DSH Reductions: The CARES Act delays Medicaid DSH reductions that were to begin on May 23, 2020, to begin, instead, on December 1, 2010.

IV.   Economic Stabilization and Assistance to Severely Distressed Sectors of the United States Economy

Title IV of the Act provides $500 billion in funding for loans and financial assistance to mid-size and large businesses, states and municipalities and non-profits.  $46 billion of these funds are specially allocated to the airline industry and industries critical to national security.  Assistance to airlines and national security industries will be via direct U.S. Department of Treasury loans and investments.

The remaining $454 billion is available to assist other businesses, states and municipalities and non-profits. The financial assistance will be made available via a Federal Reserve Act Section 13(3) program to provide financing through banks and other lenders.  This assistance targets businesses employing between 500 and 10,000 employees.  The assistance is contemplated primarily as low interest loans (interest rate not exceeding 2% per annum) with payments of principal and interest deferred for the first six months or longer.

The Act provides conditions on eligibility and terms and conditions of loans, including:  (i) economic conditions make the loan necessary to support ongoing operations, (ii) funds will be utilized to retain or restore at least 90% of workforce, (iii) prohibitions on dividends and stock buybacks while the loan is outstanding, and (iv) restrictions on offshoring jobs and a requirement that a majority of employees are based in the U.S. Other requirements, terms and conditions for loans and assistance will be determined and set forth in the Department of Treasury and Federal Reserve guidelines.  Title IV assistance does not provide for future loan forgiveness.

Application procedures and guidelines for the Title IV program are to be published shortly by the Department of Treasury and the Federal Reserve.

V.   HHS – Public Health and Social Services Emergency Fund

The CARES Act establishes a $100 billion “Public Health and Social Services Emergency Fund” to reimburse eligible providers for health care related expenses or lost revenues that are attributable to the coronavirus.  The Act further defines eligible health care providers to be public entities, Medicare or Medicaid enrolled suppliers and providers, and other entities that the Secretary includes that provide diagnosis, testing, or care for individuals with possible or actual cases of COVID-19.  These funds are available for building or construction of temporary structures, leasing of properties, medical supplies and equipment including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity.  To be eligible, providers are required to apply to HHS.

VI.   Conclusion:

Liles Parker attorneys and staff are closely monitoring HHS, CMS and CDC guidance and will update as new information becomes available. Please contact us with questions or for assistance with your response to this unprecedented National Emergency.

CARES ActCARES ActCARES Act

 

 

 

 

 

Michael Cook, Jennifer Papapanagiotou and Andy Lynch are Partners at Liles Parker, PLLC.  They each have decades of experience representing health care providers and suppliers and other businesses around the country in connection with a wide range of matters.  Questions regarding the impact of recent coronavirus guidance on your organization?  Call Liles Parker for a free consultation.  We can be reached at:  1 (800) 475-1906.

[1] See this link for a full copy of the CARES Act.

[2] For a collection of all articles written by Liles Parker attorneys related to the COVID-19 public health emergency, please visit our webpage at this link.

[3] The CMS Press Release on the Accelerated and Advanced Payment process can be accessed here and the Fact Sheet can be accessed here.

Operating a Medical Practice in Texas during the COVID-19 Pandemic

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Texas SNF Providers are Under Audit(March 30, 2020): The COVID-19 pandemic is unprecedented and has resulted in President Trump declaring a National Emergency[1] and Secretary Alex Azar, of the US Department of Health & Human Services (HHS) to declare a public health emergency[2] for the nation. The effects of this pandemic have been felt across the country, and understandably, numerous disruptions to clinic operations have occurred. These uncertainties have left providers questioning the types of procedures that can be completed during the pandemic.  This article examines COVID-19 related guidance from the Texas Governor’s Office, the Texas Medical Board (Board}, and the Texas Attorney General’s Office with respect to medical clinics in Texas. However, this review is not exhaustive. It should be kept in mind that due to the rapidly evolving nature of this public health emergency, that any guidance would need to be constantly updated. Therefore, it is strongly recommended that a practice consult with legal counsel to address any concerns specific to their practice.

I.    The Impact of COVID-19 on Telemedicine Laws in Texas:

When possible, it is highly advisable that practices conduct visits through telemedicine or postpone visits that are able to be completed at a later date. During the pandemic, some Medicare telemedicine laws have been relaxed to expand coverage.[3] In addition, some states have expanded access to telemedicine as well. Texas is one of the states that has expanded access to telemedicine services.

  • Expansion of Telemedicine.

On March 14, 2020, the Governor of the State of Texas, Greg Abbott, approved the Board’s request to temporarily suspend Texas Occupation Code 111.005 (a)-(b) and Title 22, Chapter 174.6 (a)(2)-(3) of the Texas Administrative Code. Pursuant to these suspensions, Texas has approved phone only consults as telemedicine. Specifically, the Board has advised: “Telemedicine, including the use of telephone only, may be used to establish a physician-patient relationship. This expanded use of telemedicine may be used for diagnosis, treatment, ordering of tests, and prescribing for all conditions. The standard of care must be met in all instances.” These suspensions are in effect until the March 13, 2020 disaster declaration is lifted or expires or they are terminated by the Office of the Governor.[4] It is important to note that only encounters that are initiated by a patient, or the patient’s proxy decision maker, are allowed to qualify as telemedicine under these rule changes.[5]

  • Telemedicine for Chronic Pain.

On March 19, 2020, Governor Abbott approved the Board’s request to temporarily suspend 22 TAC § 174.5(e)(2)(A). This law previously stated, “Treatment of chronic pain with schedule drugs through the use of telemedicine medical services is prohibited.”[6] According to the Board, this “waiver allows telephone refill(s) of a valid prescription for treatment of chronic pain by a physician with an established chronic pain patient. Due to the seriousness of the opioid crisis and the need to ensure there is proper oversight of chronic pain management, this suspension is only in effect until April 10, 2020.”[7] The Board also added however, that the physician “remains responsible for meeting the standard of care and all other laws and rules related to the practice of medicine. The standard of care must still be maintained related to the treatment of chronic pain patients.” This order opens up the possibility of continuing to treat some chronic pain patients via telemedicine which previously was not possible.

However, there are still many instances that telemedicine cannot adequately address the needs of a patient. Therefore, providers in Texas need to be aware of the new limitations placed on them when completing non-urgent elective procedures or surgeries.

II.   Executive Order GA-09:

On March 22, 2020, the Governor Abbott, issued Executive Order No. GA-09. Executive Order GA-09 ordered that:

[A]ll licensed health care professionals and all licensed health care facilities shall postpone all surgeries and procedures that are not immediately medically necessary to correct a serious medical condition of, or to preserve the life of, a patient who without immediate performance of the surgery or procedure would be at risk for serious adverse medical consequences or death, as determined by the patient’s physician;

PROVIDED, however, that this prohibition shall not apply to any procedure that, if performed in accordance with the commonly accepted standard of clinical practice, would not deplete the hospital capacity or the personal protective equipment needed to cope with the COVID-19 disaster.

GA-09 applies to the entire state of Texas and is currently in full force and effect until 11:59 p.m. on April 21, 2020 unless the order is modified, amended, rescinded, or suspended by the governor.[8]

  • Related Texas Attorney General Guidance.

On March 23, 2020, Texas Attorney General, Ken Paxton, warned all licensed health care professionals and all licensed health care facilities, including abortion providers, that they must postpone all surgeries and procedures that are not immediately medically necessary. It was clarified that this prohibition applies to all surgeries and procedures that are not immediately medically necessary, “including routine dermatological, ophthalmological, and dental procedures, as well as most scheduled healthcare procedures that are not immediately medically necessary such as orthopedic surgeries or any type of abortion that is not medically necessary to preserve the life or health of the mother.”[9] Attorney General Paxton noted that the failure to comply with the executive order can result in penalties of up to $1,000 or 180 days of jail time.[10]

  • Related CDC Guidance.

The CDC recommends that elective surgeries at inpatient facilities be rescheduled as necessary and recommends that urgent inpatient diagnostic and surgical procedures be moved to outpatient settings when feasible. In addition, any non-urgent outpatient visits should be rescheduled.[11]

  • Related CMS Guidance.

 CMS has issued guidelines regarding “Adult Elective Surgery and Procedure Recommendations: Limit all non-essential planned surgeries and procedures, including dental, until further notice.” CMS also included a tiered framework with guidance regarding the types of procedures that should be completed or postponed.[12]

  •  Texas Medical Board Emergency Rules and Guidance.

On March 24, 2020, the Texas Medical Board (Board) issued guidance stating that it will enforce Executive Order GA-09 and passed emergency Board rules to enforce the “Executive Order’s prohibition against performing surgeries or medical procedures that are not immediately medically necessary through April 21, 2020.”[13]

A.  Board Emergency Rules.

On March 23, 2020, the Board adopted emergency rules to enforce Executive Order GA-09. These rules allow the Board to quickly act if it is determined that a licensee is in violation of the Executive Order. The emergency rules have amended 22 TAC § 187.57(c) and 22 TAC § 178.4(d). The Board updated 22 TAC § 187.57(c) to amend the current definition of “Continuing Threat to the Public Welfare” to include the “performance of a non-urgent elective surgery or procedure.”[14] The Board also amended 22 TAC § 178.4(d) to require immediate reporting of “any physician scheduling to perform, preparing to perform, performing, or  who has performed a non-urgent elective surgery or procedure.”[15]

B.  Board Guidance and Answers to Frequently Asked Questions (FAQs):

The Board has recognized that there are different levels of need for “elective” surgeries. These levels of need can be distinguished by terms such as “urgent,” “emergent,” “or acuity.” Despite the differences in terminology used, the Board has stated that the physician must determine “if these types of procedures are delayed or canceled, will a patient be at risk for serious adverse medical consequences or death.”[16]

Due to the changes in 22 TAC § 187.57(c), the Board defined procedures that are “urgent or elective urgent” as “a surgery or procedure is scheduled where there is a risk of patient deterioration of disease progression that is likely to occur if the procedure is not undertaken immediately and/or the surgery or procedure is significantly delayed. The resulting decline in the patient’s health could make them more vulnerable to COVID-19 and other issues.”[17]

As Executive Order GA 09 and 22 TAC § 187.57(c) provides that this prohibition does not apply to a procedure that, if performed in accordance with the commonly accepted standard of clinical practice, would not deplete the hospital capacity or the personal protective equipment (PPE) needed to cope with the COVID-19 disaster. What does this mean?  As the Board’s guidance reflects:

“Executive Order GA O9 stated that PPE and hospital capacity needed to fight COVID-19 should not be depleted. Because PPE and hospital capacity are a critical need, procedures under this section of Executive Order GA 09 and 22 TAC § 187.57(c) must still meet the criteria of being medically necessary to prevent ‘risk for serious adverse medical consequences or death, as determined by the patient’s physician,’ regardless of the office, facility, local, regional, or state availability of PPE and hospital capacity.[18]

In order to assist providers with determining whether a surgery or procedure can be performed, the Board has drafted a number of questions for the provider to consider:

Question #1: Does this prohibition apply to me or my practice location?

“The prohibition applies to ALL licensed healthcare providers and their delegates. It also applies to all licensed healthcare facilities. If you are a licensed healthcare professional or delegate, or performing the medical act in a licensed healthcare facility, proceed to #2.

Question #2:  Is the medical act a surgery or procedure?

  • Yes, proceed to #3.

  • No, I am performing other medical acts, such as a history, physical exam, non-invasive diagnostics, or ordering/performing lab tests. If your answer is no, you may proceed with the medical act.

Question #3:  If the medical act is a surgery or procedure, then you must ask the following questions:

  • Is this immediately medically necessary to correct a serious medical condition or to preserve the life of a patient?

  • Would this patient, without immediate performance of the surgery or procedure, be at risk for serious adverse medical consequences or death? If you answer yes to either of the above questions, you can proceed with the medical act. You should document the medical necessity and serious risk in the patient’s medical record. In determining how to answer the above questions, please review the above discussion of urgent vs. non-urgent and elective surgery or procedure.

Also note that performance of the following medical acts would generally not be considered immediately medically necessary/pose a serious risk:

Routine dermatological procedures;

  • Routine ophthalmological procedures;
  • Routine dental procedures;
  • Nonemergent orthopedic surgeries;
  • Cosmetic and plastic surgeries;
  • Nonsurgical cosmetic procedures; and
  • Abortion not medically necessary to preserve the life or health of the mother.

If a physician determines that an elective surgery is necessary and that the surgery would not violate Executive Order GA-09 or Board rules, the Board advised: “Documentation is key. It is very important that the medical record clearly reflects why the elective surgery or procedure was urgent and necessary to prevent serious adverse medical consequences or death. This documentation could include information on the patient’s medical history, prescriptions, lab results, imaging, or other relevant factors used to help make the determination of the urgent necessity of the elective surgery or procedure.” Therefore, if a surgery or procedure must be performed, it is very important that the physician clearly document why the procedure or surgery was necessary at this time.

The Board has also stated in its guidance that the performance of a non-urgent elective procedure may be determined by the Board to be a continuing threat to public welfare. If the Board received a complaint of this nature, it “may result in a temporary suspension or restriction hearing with or without notice depending on the circumstances. Any Board action to restrict or suspend a licensee’s license, even if temporary, will trigger a mandatory report to the National Practitioner Data Bank (NPDB).”[19]

 III.  Conclusion:

If a surgery or procedure is elective and it is possible to postpone the procedure, the procedure should be postponed. However, where a patient who without immediate performance of the surgery or procedure would be at risk for serious adverse medical consequences or death, as determined by the patient’s physician, it may be performed. While the rules state that if the procedure were performed in accordance with the commonly accepted standard of clinical practice, the [non-urgent elective surgery or procedure] would not deplete the hospital capacity or the personal protective equipment needed to cope with the COVID-19 disaster, then the physician may perform the procedure. However, the Board has clearly stated that due to the pandemic, all surgeries must meet the criteria of being medically necessary to prevent “risk for serious adverse medical consequences or death, as determined by the patient’s physician.”

If a practice in Texas is going to perform any surgeries or procedures while these rules are in effect, the decision to perform the surgery or procedure must be made on a case by case basis. The physician will need to make a determination that the specific patient would be at risk for a serious adverse medical consequences or death without performance of the procedure. These findings would need to be clearly documented in the patient’s record along with any support for the findings. A Texas physician who performs any procedure during this disaster should be prepared to defend the procedure in front of the Board if necessary.

Physicians should be aware though that the Board has significant authority to enforce the recently passed emergency legislation. Physicians are required under the newly enacted laws to immediately report “any physician scheduling to perform, preparing to perform, performing, or who has performed a non-urgent elective surgery or procedure.”[20] If a physician was reported for having performed a non-urgent elective surgery or procedure, it could result in a temporary suspension hearing with or without notice depending on the circumstances. Any Board action to restrict or suspend a licensee’s license, even if temporary, would trigger a mandatory report to the NPDB. Therefore, if a physician believed that any of the surgeries or procedures performed by another physician were non-urgent, that physician would be required to immediately report the performing physician. The performing physician could then have to defend the action before the Board at a temporary suspension hearing. As the Board can temporarily suspend a practitioner without notice, the provider may not have an opportunity to defend the procedures until after the suspension has been put in effect. In addition, the suspension would be reported to the NPDB which would then send out a notice to all payors the provider is credentialed with. Therefore, all providers should be aware that the performance of any procedure or surgery at this time comes at a risk and therefore, only truly necessary procedures or surgeries should be completed.

Liles Parker attorneys and staff are closely monitoring HHS, CMS and CDC guidance and will update this article as new information becomes available. Please contact us with questions or for assistance with your response to this unprecedented National Emergency.

Call Meaghan McCormick for help with an 1155 waiver.Meaghan McCormick is an Associate at Liles Parker, Attorneys & Clients at Law.  She has experience representing health care providers and suppliers around the country in connection with a wide range of health law matters.  Questions regarding the impact of recent coronavirus guidance on your organization?  Call Liles Parker, PLLC for a free consultation.  We can be reached at:  1 (800) 465-1906.

[1] Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, Issued on March 13, 2020.  A link to the declaration can be found here.

[2] Determination that a Public Health Emergency Exists, issued by Secretary Azar on January 31, 2020.  A link to the determination can be found here.

[3] An article that discusses the updates made by Medicare for telemedicine can be accessed here.

[4] The Board’s press release regarding these changes can be accessed here.

[5] The Board’s responses to the FAQs regarding telemedicine during Texas disaster declaration for COVID-19 pandemic can be accessed here.

[6] 22 TAC § 174.5(e)(2)(A) can be accessed here.

[7] The Board’s Press Release regarding the waiver for chronic pain patients can be accessed here.

[8] The full text of the order can be accessed here.

[9] It should be noted that some providers have filed suit against Texas regarding Attorney General Paxton’s declaration.

[10] Press release from Texas Attorney General Ken Paxton can be accessed here.

[11] CDC guidance for healthcare facilities can be accessed here.

[12] CMS’ guidance and tier list can be accessed here.

[13] The Board’s press release regarding the emergency rules passed to enforce Executive Order GA-09 can be accessed here.

[14] The amended 22 TAC § 187.57(c) can be accessed here.

[15] The amended 22 TAC § 178.4(d) can be accessed here.

[16] The Board’s responses to the FAQs regarding non-urgent, elective surgeries and procedures during Texas disaster declaration for COVID-19 pandemic can be accessed here.

[17]  Id.

[18] Id.

[19] Id.

[20] The amended 22 TAC § 178.4(d) can be accessed here.

Coronavirus Update – New FAQs and Toolkits for Telehealth, Telemedicine & Medicare Provider Enrollment

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(March 27, 2020): Liles Parker published an article covering CMS’ blanket waiver of certain telehealth requirements on March 16, 2020, with an updated version posted March 17, 2020.[1] This article covers developments since March 17, 2020 related to CMS telehealth requirements and provider enrollment activities in response to the COVID-19 public health emergency, as well as the Drug Enforcement Administration’s recent waiver permitting practitioners to prescribe controlled substances via telemedicine.

We recommend providers carefully review the CMS and DEA guidance specific for each service or activity for complete details or contact a Liles Parker attorney for more information.

I.   Medicare Telehealth Waiver:

On March 17, 2020, CMS announced a waiver of certain telehealth coverage requirements so that Medicare beneficiaries can receive a wider range of services from their doctors without having to travel to a healthcare facility.[2]Since then, the agency has published toolkits for general and ESRD providers that answer a number of key questions.[3]

The initial announcement regarding the blanket waiver published March 17, 2020 included the following key takeaways:

  • Effective for services starting March 6, 2020 and for the duration of the COVID-19 Public Health Emergency, Medicare will make payment for Medicare telehealth services furnished to patients in all areas of the country in all settings.
  • During this period, Medicare will make payment for Medicare telehealth services furnished to beneficiaries in any healthcare facility and in their home.
  • The Medicare coinsurance and deductible would generally apply to these services. However, the HHS Office of Inspector General (OIG) is providing flexibility for healthcare providers to reduce or waive cost-sharing for telehealth visits paid by federal healthcare programs.
  • To the extent the 1135 waiver requires an established relationship, HHS will not conduct audits to ensure that such a prior relationship existed for claims submitted during this public health emergency.
  • HHS’ Office of Civil Rights will exercise enforcement discretion and waive penalties for HIPAA violations against health care providers that serve patients in good faith through everyday communications technologies, such as FaceTime or Skype, during the COVID-19 nationwide public health emergency.[4]

Note that the waiver does not restrict coverage to patients with coronavirus or symptoms of coronavirus. Any service that a provider can safely deliver via telehealth and is on CMS’ list of approved telehealth services[5] will be permitted under the new waiver. This waiver of Medicare program and HIPAA requirements will last for the duration of the COVID-19 public health emergency.

II.   Medicare Telehealth FAQs

CMS updated its COVID-19 FAQs after publishing the March 17, 2020 telehealth waiver notice.[6] The FAQs answer several key questions we have received from clients in the last several days, including the following:

  • Question: For purposes of the statutory requirement that a patient have a face-to-face encounter with a physician or an allowed non-physician practitioner in order to qualify for Medicare home health care, can this encounter occur via telehealth during a pandemic outbreak of an infectious disease?

Answer: The face-to-face encounter, as described at 1814(a)(2)(C) and 1835(a)(2)(A) of the Social Security Act, can be performed via telehealth in accordance with the requirements under 1834(m)(4)(C) of the Social Security Act. Under the expansion of telehealth under the 1135 waiver, beneficiaries are able to use telehealth technologies with their doctors and practitioners from home (or other originating site) for the face-to-face encounter to qualify for Medicare home health care.

  • Question: Can the distant site practitioner furnish Medicare telehealth services from their home? Or do they have to be in a medical facility?

Answer: There are no payment restrictions on distant site practitioners furnishing Medicare telehealth services from their home. Individual providers may use their MAC hotline number to verbally update their practice location over the phone and would be effective immediately so practitioners could continue providing care without a disruption.

Liles Parker recommends that if a distant site practitioner intends to provide telehealth services and does not have their home listed on the enrollment file as a practice location, he or she should call their Medicare Administrative Contractor (MAC) to add it. Please also see the additional information below on CMS provider enrollment waivers.

We note that CMS’ telehealth waiver does not relax or remove incident to supervision requirements. We recently reviewed whether a distant site practitioner (for example, a clinical psychologist), and someone under their supervision who is not enrolled in the Medicare program (for example, a licensed counselor), could collaborate via telemedicine to care for a Medicare patient. The scenario would involve the licensed counselor providing individual therapy services via telemedicine technology. The patient would be an established patient with a plan of care established by the clinical psychologist. The psychologist and licensed counselor would not be in the same location. As of the publication of this update, CMS has not relaxed or waived the supervision requirements for incident to services; therefore, this telehealth service would not be covered unless the supervising psychologist and licensed counselor are in the same location. We will continue to monitor CMS’ FAQs and other guidance for any changes.

III.   State Medical Board Telehealth and Other Waivers:

We recommend that you check with your State licensing board to verify state requirements for telemedicine if you are unfamiliar with what is permitted in your state and the State in which you wish to provide telehealth services. The Federation of State Medical Boards (FSMB) is maintaining a list of state actions that include waivers of licensure requirements, license renewal requirements, and other state medical board actions in response to the COVID-19 public health emergency.[7] Many of these waivers address physicians from out-of-state rendering telehealth and/or telemedicine services in states where they are not licensed. Keep in mind that a physician must meet the licensing requirements both in the state where he or she is licensed and in the state where the patient being seen via telemedicine is located.

Liles Parker has advised numerous clients with regard to telemedicine services and is ready to assist you in understanding both Medicare and relevant state law during this unprecedented public health emergency.

IV.   DEA Waiver to Regarding Controlled Substance Prescribing via Telemedicine

DEA is doing its part to support enhanced telemedicine services during the COVID-19 public health emergency as well. In a recently posted FAQ,[8] DEA informed the healthcare community that while a prescription for a controlled substance issued by means of the Internet (including telemedicine) must generally be predicated on an in-person medical evaluation (21 U.S.C. 829(e)), the Controlled Substances Act contains certain exceptions to this requirement. One such exception occurs when the Secretary of Health and Human Services has declared a public health emergency, as Secretary Azar did on January 31, 2020.

On March 16, 2020, the Secretary of HHS, with the concurrence of the Acting DEA Administrator, designated that the telemedicine allowance under section 802(54)(D) applies to all schedule II-V controlled substances in all areas of the United States. Accordingly, as of March 16, 2020, and continuing for as long as the Secretary’s designation of a public health emergency remains in effect, DEA-registered practitioners in all areas of the United States may issue prescriptions for all schedule II-V controlled substances to patients for whom they have not conducted an in-person medical evaluation, provided all of the following conditions are met:

  • The prescription is issued for a legitimate medical purpose by a practitioner acting in the usual course of his/her professional practice;
  • The telemedicine communication is conducted using an audio-visual, real-time, two-way interactive communication system; and
  • The practitioner is acting in accordance with applicable Federal and State laws.

Provided the practitioner satisfies the above requirements, the practitioner may issue the prescription using any of the methods of prescribing currently permitted, including electronically (for schedules II-V) or by calling in an emergency schedule II prescription to the pharmacy, or by calling in a schedule III-V prescription to the pharmacy.

DEA clarified that the term “practitioner” includes a physician, dentist, veterinarian, or other person licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he or she practices, to prescribe controlled substances in the course of his/her professional practice.

V.   Additional Details on Medicare Provider Enrollment Waivers:

CMS issued a blanket waiver related to provider enrollment requirements[9] on March 13, 2020. That waiver included the following, as further explained the new FAQs published by CMS as of March 22, 2020:[10]

  • For Physicians and Non-Physician Practitioners:
    • Establishes toll-free hotlines for non-certified Part B suppliers, physicians and nonphysician practitioners to enroll and receive temporary Medicare billing privileges
    • Waives the following screening requirements:
      • Application Fee – 42 C.F.R § 424.514
      • Criminal background checks associated with fingerprint-based criminal background checks – 42 C.F.R § 424.518
      • Site visits – 42 C.F.R § 424.517
      • Postpones all revalidation actions 
  • For All other providers and suppliers (including DMEPOS):
    • Expedites any pending or new applications from providers
      • All clean web applications will be processed within 7 business days and all clean paper applications in 14 business days.
    • Waives the following screening requirements for all applications received after March 1, 2020:
      • Application Fee – 42 C.F.R § 424.514
      • Criminal background checks associated with fingerprint-based criminal background checks – 42 C.F.R § 424.518
      • Site visits – 42 C.F.R § 424.517
      • Postpones all revalidation actions;

CMS’ new FAQs include a list of the toll-free hotline numbers for each Medicare Administrative Contractor where physicians and non-physician practitioners[11] can call to receive immediate, temporary billing privileges in a jurisdiction where they are not already enrolled, or to add new practice locations to an existing enrollment. Callers should be prepared to provide the Legal Name of the enrolling practitioner, National Provider Identifier (NPI), Social Security Number, a valid in-state or out-of-state license, address information and contact information (telephone number). If basic screening criteria are met, the MAC will advise the physician or non-physician practitioner during the call that provisional billing privileges have been granted and will follow-up with a letter. If you need a retroactive effective date, the MACs may backdate your provisional enrollment as far as March 1, 2020. Individuals who receive these provisional privileges will be asked to file initial enrollment applications after the public health emergency declaration is lifted.

Note that for physicians enrolling in a MAC jurisdiction where they are not currently licensed, CMS is permitting this under its waiver authority so long as the following conditions are met:

  1. The physician or non-physician practitioner must be enrolled as such in the Medicare program.
  2. The physician or non-physician practitioner must possess a valid license to practice in the State which relates to his or her Medicare enrollment.
  3. The physician or non-physician practitioner is furnishing services – whether in person or via telehealth – in a State in which the emergency is occurring in order to contribute to relief efforts in his or her professional capacity.
  4. The physician or non-physician practitioner is not affirmatively excluded from practice in the State or any other State that is part of the 1135 emergency area.

CMS’ provider enrollment waiver does not supersede State or local licensing requirements. As we mentioned above, many States are waiving out-of-state licensing requirements or streamlining their process to get a temporary license. As stated above, we recommend that you check with your State licensing board to verify state requirements both in the state where the physician or non-physician practitioner is licensed and in the State where he or she wishes to render services either in-person, or via telehealth or telemedicine.[12]

Liles Parker provides assistance to all types of providers seeking to enroll in the Medicare program.

V.   Conclusion:

Liles Parker attorneys and staff are closely monitoring HHS, CMS and CDC guidance and will update as new information becomes available. Please contact us with questions or for assistance with your response to this unprecedented National Emergency.

covid-19 public health emergencyJennifer Papapanagiotou is a Partner at Liles Parker, Attorneys & Clients at Law.  She has decades of experience representing health care providers and suppliers around the country in connection with a wide range of regulatory actions.  Questions regarding the impact of recent coronavirus guidance on your organization?  Call Jennifer for a free consultation.  She can be reached at:  1 (800) 465-1906.

[1] See the March 16, 2020 article (updated March 17, 2020) here.

[2] Medicare Telemedicine Health Care Provider Fact Sheet, dated March 17, 2020, can be found here. Frequently Asked Questions expanding on the fact sheet and giving more details on implementation can be found here.

[3] The CMS General Provider Telehealth and Telemedicine Tool Kit can be found here. The ESRD Provider Telehealth and Telemedicine Tool Kit can be found here.

[4] HHS’s Office of Civil Rights is maintaining a website with more information on this topic here.

[5] You can find CMS’ list of approved telemedicine services here.

[6] The updated FAQs from CMS last updated on March 23, 2020 can be accessed here.

[7] The FSMB list of state licensing board actions related to the COVID-19 public health emergency can be found here.

[8] DEA’s FAQ can be found here.

[9] COVID-19 Emergency Declaration Health Care Providers Fact Sheet, dated March 13, 2020, can be found here.   Provider enrollment waivers of certain requirements are outlined in the guidance.

[10] The CMS 2019-Novel Coronavirus (COVID-19) Medicare Provider Enrollment Relief Frequently Asked Questions (FAQs) can be accessed here.

[11] Other provider types will need to file an enrollment application via PECOS or a paper application with the appropriate Medicare Administrative Contractor; however, the MACs will be expediting processing of all applications as indicated in the FAQs.

[12] The Federation of State Medical Boards list of state licensing board actions related to the COVID-19 public health emergency can be found here.

DOJ is Aggressively Investigating Allegations of Wrongdoing Related to COVID-19 Fraud and the Current National Emergency

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DOJ is aggressively prosecuting instances of COVID-19 fraud and related wrongdoing.(March 27, 2019):  We live in trying times.  As the coronavirus disease (COVID-19) has spread both globally and throughout the United States, the government has taken a number of steps to address the current pandemic.  On March 13, 2020, President Donald Trump officially declared that the COVID-19 outbreak constitutes a national emergency.[1]  Within 72 hours of the issuance of President Trump’s declaration,  William Barr, the Attorney General of the United States, determined it was necessary to issue a memorandum to the 94 U.S. Attorney’s Offices around the country stressing the fact that Department of Justice (DOJ) prosecutors must remain diligent in their efforts to detect, investigate and prosecute wrongdoing related to the COVID-19 crisis.  This article examines the various COVID-19 fraud concerns that DOJ has already raised and sets out steps you can take to reduce your level of regulatory risk.

I.   Overview of DOJ Guidance of COVID-19 Fraud and Related Wrongdoing:

As mentioned above, on March 16, 2020, the Attorney General issued guidance[2] to the 94 U.S. Attorney’s Office around the country noting that it is essential that the justice system remain functioning throughout the national emergency.  It is also worth noting that U.S. Attorney’s Offices has been directed to prioritize the detection, investigation, and prosecution of all criminal conduct related to the current pandemic.”

Less than a week after issuing this initial guidance, the DOJ announced on Sunday, March 22, 2020, that it had filed its first enforcement action in the Western District of Texas related to COVID-19 fraud.  As set out in the Civil Complaint filed by the government, the defendants have been alleged to have engaged in a “wire fraud scheme seeking to profit from the confusion and widespread fear surrounding COVID-19” through the company’s sale of World Health Organization (WHO) vaccine kits.  As the government notes, at this time, there are no legitimate COVID-19 vaccines and the WHO is not distributing such a vaccine.  As Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division stated at the time:

“The Department of Justice will not tolerate criminal exploitation of this national emergency for personal gain . . . We will use every resource at the government’s disposal to act quickly to shut down these most despicable of scammers, whether they are defrauding consumers, committing identity theft, or delivering malware.”[3]

Even more recently, on March 25, 2020, the U.S. Attorney’s Office for the Central District of California announced that it had filed a criminal complaint against an individual who allegedly solicited investments in a company that was marketing pills that would prevent coronavirus infections.  The defendant’s company was also supposedly marketing an injectable cure for individuals battling COVID-19. The complaint charges the individual with a single count of attempted wire fraud. [9]

II.   Specific Guidance Issued by Deputy Attorney Rosen on COVID-19 Fraud:

Shortly thereafter, on March 25, 2020, Deputy Attorney General, Jeffrey A. Rosen issued guidance titled “Department of Justice Enforcement Actions Related to COVID-19.” [4]  As the guidance notes, there are a number of specific statutory authorities that Federal prosecutors may find applies to assert if COVID-19 fraud or wrongdoing is identified.  These statutory authorities include, but are not limited to:

Federal Statutory Authority 
15 U.S.C. § 1 — Trusts, etc. in Restraint of Trade Illegal; Penalty
15 U.S.C. § 2 – Monopolizing Trade a Felony; Penalty
15 U.S.C. § 14 – Sale etc., on Agreement not to Use Goods of Competitor
15 U.S.C. § 1263 Prohibited Acts (Introduction of Misbranded or Banned Hazardous Substances into Interstate Commerce)
15 U.S.C. § 2068 – Prohibited Acts (Sale, Manufacture, Distribution or Import of a Consumer Product or other Product that is not in Conformity with Consumer-Product-Safety Regulations)
18 U.S.C. § 175Prohibitions with Respect to Biological Weapons
18 U.S.C. § 875 — Interstate Communications
18 U.S.C. § 876 – Mailing Threatening Communications
18 U.S.C. § 1030Fraud and Related Activity in Connection with Computers
18 U.S.C. § 1038 — False Information and Hoaxes
18 U.S.C. § 1040 — Fraud in Connection with Major Disasters and Emergencies
18 U.S.C. § 1341 – Frauds and Swindles (Mail Fraud)
18 U.S.C. § 1343 – Fraud by Wire, Radio or Television (Wire Fraud)
18 U.S.C. § 1347 — Healthcare Fraud
18 U.S.C. § 1349 — Conspiracy to Commit Fraud
18 U.S.C. §§ 1028-1028A — Fraud and Related Activity in Connection with Identification Documents, Authentication Features, and Information (Identification Fraud and Aggravated Identity Theft)
18 U.S.C. § 2320 –Trafficking in Counterfeit Goods
18 U.S.C. § 2332a — Use of Weapons of Mass Destruction
21 U.S.C. § 333 — Violation of the Food, Drug, and Cosmetic Act

Specific examples of possible COVID-19 fraud schemes that might be perpetrated were set out in Deputy Attorney General Rosen’s memorandum.  These examples included:

  • Robocalls making fraudulent offers to sell respirator masks with no intent of delivery. 18 U.S.C. § 1343 (Wire Fraud). The crime of “wire fraud” occurs when someone voluntarily and intentionally uses makes an interstate telephone call or another electronic communication (such as e-mail) in furtherance of a fraud scheme. Notably, the elements of wire fraud are very similar to those of mail fraud statute except that it speaks of communications transmitted by wire.
  • Fake COVID-19-related apps and websites that install malware or ransomware. 18 U.S.C. § 1343 (Wire Fraud) or 18 U.S.C. § 1030 (Computer Fraud). The crime of wire fraud is described above.  The crime of computer fraud occurs when someone knowingly causes the transmission of a “program, information, code or command” and intentionally damages (without authorization) a protected computer.   
  • Phishing emails asking for money or presenting malware. 18 U.S.C. § 1030 (Computer Fraud). One of the forms of computer fraud is set out above. Additional examples are also discussed under 18 U.S.C. § 1030.[5]  
  • Social media scams fraudulently seeking donations or claiming to provide stimulus funds if the recipient enters his or her bank account number. 18 U.S.C. §§ 1028-1028A (Identity Theft) or 18 U.S.C. § 1343 (Wire Fraud).  Notably, the government has extensive experience prosecuting individuals and entities who are alleged to have set up fake charities and have effectively taken advantage of a national disaster or tragedy.  The perpetrators of this type of fraud are almost always caught and the courts have levied heavy jail sentences and fines on bad actors found guilty of engaging in this type of wrongdoing.
  • Sales of fake testing kits, cures, “immunity” pills, and protective equipment. 21 U.S.C. 333 (Introduction of Misbranded or Adulterated Drug or Device Into Interstate Commerce) or 15 U.S.C. § 2068 (Violation of the Consumer Product Safety Act). Federal prosecutors and regulators for the Food and Drug Administration (FDA) handle these types of cases on an ongoing basis and are experienced in shutting down fraudsters hawking fake cures and treatments.
  • Fraudulent offers for free COVID-19 testing in order to obtain Medicare beneficiary information that is used to submit false medical claims for unrelated, unnecessary, or fictitious testing or services. 18 U.S.C. §§ 1028-1028A (Identification Fraud and Aggravated Identity Theft)This type of fraud has been occurring law before the inception of the COVID-19 fraud cases we are now seeing.  Most recently, Medicare beneficiary information has been misused by a number of telemarketing companies and durable medical equipment companies.  Federal prosecutors are currently in the middle of several prosecutions involving this type of conduct. 
  • Prescription drug schemes involving the submission of medical claims for unnecessary antiretroviral treatments or other drugs that are marketed as purported cures for COVID19. 18 U.S.C. § 1347 (Healthcare Fraud) or 15 U.S.C. § 2068 (Violation of the Consumer Product Safety Act). These common schemes are now being seen in connection with COVID-19 fraud cases around the country.  Health care providers should exercise caution before entering into business relationships with laboratories, pharmacies  and other ancillary service providers who are marketing purported cures or treatment regimens for COVID-19.
  • Robberies of patients departing from hospitals or doctor offices. 18 U.S.C. § 2118 (Robberies and Burglaries Involving Controlled Substances). Although not discussed in Deputy Attorney General Rosen’s memorandum, it is a Federal crime to take, or attempt to take, by force or violence or by intimidation, any quantity of a controlled substance from any person (including a patient) on the business premises or property of a person registered with the Drug Enforcement Administration.  In addition, to this Federal statute, there are a host of robbery statutes that would implicated under State law. 
  • Threats of violence against mayors and other public officials. 18 U.S.C. § 875 (Interstate Communications) or 18 U.S.C. § 876 (Mailing Threatening Communications). Using the internet to convey an interstate threat of violence or injury to any person would be a crime under 18 U.S.C. § 875.  Similarly, using the mails to threaten someone with violence or injury would be a crime under 18 U.S.C. § 876.  
  • Threats to intentionally infect other people. 18 U.S.C. § 2332a (Use of Weapons of Mass Destruction). Of the examples discussed in Deputy Attorney General Rosen’s guidance, this is perhaps the most interesting.  As the memorandum reflects, Federal prosecutors may view “Threats or attempts to use COVID-19 as a weapon against Americans”  as a violation of 18 U.S.C. § 2332a since COVID-19 arguably meets the statutory definition of a “biological agent” [6]and therefore could implicate our country’s terrorism-related statutes.

III.   Reducing Your Level of Regulatory Risk During the Current National Emergency:

Although the health, societal and business impact of the current COVID-19 emergency is unprecedented (at least in our lifetime), the fact that bad actors will readily take advantage of this situation is to be expected.  In fact, with the exception of the terroristic threat conduct discussed above, the types of wrongdoing encountered in COVID-19 fraud cases is pretty run-of-the-mill.  In addition to the concerns raised in Deputy Attorney General Rosen’s memorandum, several additional areas of risk to be considered by health care providers and suppliers include the following:

  • Exercise Due Diligence Before Accepting the Assertions of Medicare Coverage by a Vendor’s Sales Representative. There are a wide variety of medical devices and pharmaceutical products that have not been properly vetted through the FDA approval process in order to qualify for coverage and payment by Medicare.  Don’t assume that sales pitches asserting that a medical device or pharmaceutical product is correct.   In recent years, we have represented multiple providers who were talked into buying expensive equipment and other products based on a sales representatives promises that the item or service to be billed qualifies for Medicare coverage and payment.  In once case we handled, when our client was audited, the company that sold the medical device at issue had long since gone out of business and had been sued by other providers for misrepresenting that the services performed with the medical device could be properly billed to Medicare.
  • Take Care if You Seek a Bank or Small Business Administration (SBA) Loan as a Result of the COVID-19 Crisis. In an effort to help businesses deal with the current national emergency, the government has streamlined the SBA loan process for small businesses. Two recent articles[7]covering these developments have been placed on our website.  Should you decide to seek a bank or SBA backed business loan, you must exercise care when completing these applications.  While the documentation and approval timeframes may have been simplified, should you make a misstatement on the application or fail to disclose relevant information, your actions may constitute a crime.
  • Government Waivers of Certain Requirements (Such as those Associated with Telehealth / Telemedicine Services) are Always Limited. To its credit, the Centers for Medicare and Medicare Services (CMS) have been quick to address many of the patient access, diagnostic and treatment concerns expressed by health care providers and patients alike that have arisen because of the current COVID-19 outbreak.  For example, CMS maintains a list of services that are normally furnished in-person that it will now permit providers to furnish by Medicare telehealth.  As CMS wrote in recent guidance[8] it issued on March 17, 2020:  “Under the emergency declaration and waivers, these services may be provided to patients by professionals regardless of patient location.”  Don’t assume that the relaxation of Medicare’s telehealth / telemedicine rules are an indication that this area is no longer under extreme scrutiny by law enforcement and by CMS program integrity contractors such as Unified Program Integrity Contractors (UPICs).  Once our country has effectively dealt with the current national emergency, government investigators and CMS contractors will undoubtedly resume their review and audit of these historically-problematic claims.  For a more detailed discussion of the government’s enforcement efforts in this regard, please see our article from February 17, 2020, titled “Telemedicine Audits of Evaluations by Referring Physicians are Increasing.”

While CMS is continuing to identify additional ways that it can better facilitate the provision of patient care, health care providers need to remember that specific waivers recently approved by CMS are likely to be short-term in nature.  More importantly, all other coverage and payment requirements remain in effect.  First and foremost, were the services medically necessary?  Were the services properly documented (in accordance with CMS, State Medical Board and Industry Standards)?  Were the services properly coded and billed?  And finally, was the reimbursement you received accurate?

Once the current national emergency is over, health care providers and suppliers should expect to see significant upswings in program integrity audits by Unified Program Integrity Contractors (UPICs), Supplemental Medical Review Contractors (SMRCs) and Comprehensive Error Rate Testing (CERT) contractors.  As this health crisis continues, it is also important to keep in mind that State and Federal law enforcement agencies are actively soliciting reports of COVID-19 fraud and other related wrongdoing.  Attorney General Barr has urged the public to report any and all COVID-19 fraud schemes that are identified to the National Center for Disaster Fraud (NCDF) hotline.  As a result, it is imperative that you continue to ensure that your regulatory compliance efforts are both ongoing and up-to-date (in terms of your obligations under the law).

Have you received a document request from the OIG, a UPIC, a SMRC or another CMS contractor?  Are you currently facing a government audit or investigation of your claims billed to Medicare, Medicaid or another Federal health benefit program?  Call us for a free consultation.  We can be reached at: (202) 298-8750 or toll-free 1 (800) 475-1906.

Robert W. LilesRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with claims audits and investigation.  Is your health care practice, home health agency or hospice being audited? Give us a call.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1] Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,”dated March 13, 2020.  A copy of the declaration can be found the following link.

[2] DOJ’s Memorandum, “COVID-19 – Department of Justice Priorities,” March 16, 2020.  A copy can be found at the following link.

[3] A copy of DOJ’s Press Release is available at this link.

[4] DOJ’s Memorandum, “Department of Justice Enforcement Actions Related to COVIF-19,” March 24, 2020. A copy can be found at the following link.

[5] 18 U.S.C. § 1030 (Fraud and Related Activity in Connection with Computers). A link to the statute can be found here.

[6] See 18 U.S.C. § 175.

[7] Our article titled Small Business Administration Releases Express Bridge Loan Pilot Program for COVID-19,” dated March 26, 2020, can be found here.   An earlier article titled “COVID-19 SBA Loan Support May be Available for Qualified Health Care Providers,” dated March 25, 2020, can be found here.

[8] CMS guidance titled “Medicare Telehealth Frequently Asked Questions (FAQs),” dated March 17, 2020, can be found here.

[9]  A copy of the Press Release can be found here.

Small Business Administration Releases Express Bridge Loan Pilot Program for COVID-19

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Express Bridge Loan Pilot Program COVID-19(March 26, 2020): The Small Business Administration (“SBA”) announced an Express Bridge Loan Pilot Program on March 25, 2020.[1]   The Express Bridge Loans are available to businesses, including health care providers, to provide economic relief for businesses impacted by the Coronavirus Disease (COVID-19) while they await long-term disaster financing.[2]

 

I.   Background:

The Express Bridge Loan Pilot Program was released by the SBA in October 2017 and was created to supplement the SBA’s ability to grant direct disaster loans.[3]  The program provides “expedited guaranteed bridge loan financing for disaster-related purposes” to any small business that is located in a Presidentially-declared disaster area[4] while the business awaits long-term financing, regardless of whether the long-term financing is sought through the SBA disaster loan program.  The Express Bridge Loan Program includes a “streamlined underwriting process” and is designed to “minimize the burden” of applying for a small business loan.[5]

II.   COVID-19 Expansion of the Express Bridge Loan Program:

The SBA expanded its Express Bridge Loan Program, effective March 25, 2020,[6] to include all small businesses impacted by COVID-19 Emergency Declaration.[7] This proclamation includes all states, U.S. Territories, and the District of Columbia. Express Bridge Loans can be approved for health care providers through March 13, 2021.

Express Bridge Loans may be granted at a maximum amount of $25,000 for a loan term of 7 years.  The maximum allowable interest rate is 6.5% over the Prime rate, regardless of the maturity of the loan.[8] A lender may charge an applicable fee of 2% of the loan amount (or $250), whichever is greater.[9] Lenders are not required to take collateral for Express Bridge Loans. The minimum accepted credit score is a FICO Small Business Scoring Service Score of 130.

a. Who is Eligible for an Express Bridge Loan?

Any small business located in any U.S. state, territory, or the District of Columbia that was operational on March 13, 2020.

b. How Does a Health Care Provider Qualify for an Express Bridge Loan?

A health care provider interested in applying for an Express Bridge Loan must demonstrate that it does not have credit available elsewhere.[10]  This can be achieved by having a lender[11] certify on a Lender’s Application for Loan Guaranty Form (SBA Form 1920) that the provider does not have the ability to obtain some or all of the requested loan amount from a non-Federal source, including from the lender completing the form, without SBA assistance.  The lender must also document that the provider / applicant had an operating business located in a disaster area on March 13, 2020, which was adversely impacted by COVID-19.

The provider / applicant must also complete the SBA 7(a) Borrower Information Form (SBA Form 1919). This form should be submitted to the provider’s lender. The form requires information about each of the applicant’s principals, which includes:

  • Sole proprietors;
  • For a general partnership: all general partners and all limited partners owning 20% or more of the equity of the business; or any partner that is involved in the management of the business;
  • For a corporation: all owners of 20% or more of the corporation, and each officer and director;
  • For limited liability companies: all members owning 20% or more of the company, each officer, director, and managing member;
  • Any person hired by the business to management day-to-day operations (“key employees”); and
  • Any Trustor (if the business is owned by a trust).

A separate SBA Form 1919 should be completed and signed by each of the above principals.[12] Finally, the lender must a signed IRS Form 4506-T to obtain an IRS transcript before it disburses the loan.[13]

C. How Soon Will a Provider Receive an Express Bridge Loan Payment?

The first disbursement of an Express Bridge Loan “should occur” within 45 days of the lender’s receipt of an SBA loan number. Disbursement must occur within 90 days of receipt of an SBA loan number or the loan will be cancelled.[14]  The SBA “endeavors” to provide loan numbers within one business day of receipt of the application (if filed through the SBA’s electronic transmission system, “E-Tran”).

III.   Conclusion:

The Federal Government is working with the SBA to make emergency funds available as quickly as possible to providers affected by COVID-19. Liles Parker attorneys are closely monitoring the available programs and are available to assist health care providers with the loan process and to answer any other concerns in response to this National Emergency.

Ashley Morgan is a Senior Associate at the health law firm, Liles Parker, PLLC.  Ms. Morgan represents health care providers and suppliers around the country in a wide variety of regulatory matters.  These include but are not limited to Medicare revocation, suspension and deactivation actions, prepayment reviews, postpayment claims audits, and State Board licensure matters.  Ms. Morgan is also assisting health care providers and suppliers adversely affected by COVID-19 with the completion and submission of SBA business loans.  For a free consultation regarding your needs, please give Ms. Morgan a call.  She can be reached at (202) 298-8750 or toll-free at 1 (800) 475-1906.

[1] Express Bridge Loan Pilot Program Guide, Small Business Administration, https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[2] COVID-19 SBA Loan Support May be Available for Qualified Health Care Providers, Liles Parker PLLC (Mar. 25, 2020) https://www.lilesparker.com/2020/03/25/covid-19-sba-loan/ (last accessed Mar. 26, 2020).

[3] 82 Fed. Reg. 47958, Express Bridge Loan Pilot Program; Modification of Lending Criteria (Oct. 16, 2017) (codified at 13 CFR Part 120).

[4] Current Declared Disasters, Small Business Administration, https://disasterloan.sba.gov/ela/Declarations (last accessed Mar. 26, 2020).

[5] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 3, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[6] According to the SBA the expansion of the Express Bridge Loan Program will be published in the Federal Register. Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 3, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[7] This Emergency Declaration was issued by President Trump on March 13, 2020. Donald Trump, Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, The White House, Mar. 13, 2020, https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/ (last accessed Mar. 26, 2020).

[8] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 7-8, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[9] An SBA Form 159 must be completed and signed by the applicant and lender if the lender charges an application fee. Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 11, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[10] 42 C.F.R. § 120.101.

[11] The lender must have an existing banking relationship with the provider/applicant as of the date of the applicable disaster. Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 9, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[12] SBA 7(a) Borrower Information Form, Small Business Administration (SBA Form 1919) (OMB Control No. 3245-0348) (Exp. Date July 31, 2020).

[13] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 11-12, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[14] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 12, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

Lab Testing Guidance for COVID-19

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COVID-19 Diagnostic(Updated March 31, 2020): On March 13, 2020, President Trump declared a National Emergency[1] related to the current Coronavirus / COVID-19 outbreak.  The declaration gives Secretary Alex Azar of the US Department of Health & Human Services (HHS) the power to waive certain Federal requirements in Medicare, Medicaid and CHIP in order to address the outbreak. The President’s declaration was preceded by Secretary Azar’s determination on January 31, 2020[2] that a public health emergency exists.  Since these pronouncements, Liles Parker attorneys have received numerous calls asking for clarification on these waivers and other guidance from HHS and the Centers for Medicare and Medicaid Services (CMS).  Our clients have also asked that we provide a listing of useful links and other available resources.  This article will detail the information related to lab operations and billing for COVID-19 diagnostic tests to CMS, as well as billing for COVID-19 diagnostic tests for private payors.

I.   Authorization for Use of COVID-19 Testing:

On February 6, 2020, CMS provided guidance permitting laboratories to use the CDC 2019-Novel Coronavirus Real-Time RT-PCR Diagnostic Panel Assay for use in CDC qualified laboratories.  At that time, testing was limited to the CDC developed test and could only be performed by qualified laboratories designated by CDC and, in the United States, certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), 42 U.S.C. § 263a, to perform high complexity tests.[3] Since then, the FDA has approved a number of laboratory-developed tests being performed by private companies throughout the United States.[4]

II.   Billing for CMS:

On March 5, 2020, CMS announced new HCPCS codes for laboratories to bill Medicare for diagnostic tests for coronavirus.  There are two new HCPCS codes: U0001 and U0002.

  • U0001: This code is to be used only for the test developed by the Centers for Disease Control and Prevention (CDC) for 2019-nCoV/SARS-CoV-2.
  • U0002: This code is to be used for non-CDC developed laboratory tests for 2019-nCoV/SARS-CoV-2.

Starting April 1, 2020, Medicare claims processing systems will be able to accept these codes for dates of service on or after February 4, 2020.[5]

The following are the current COVID-19 Test Pricing as of March 12, 2020[6]:

MAC Jurisdiction (J) MAC States/Territories U0001 Test PriceU0002 Test Price
 J6 – National Government Services (NGS) Illinois, Minnesota, Wisconsin $35.91 $51.31
 JK – National Government Services (NGS)Connecticut, New York, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont $35.91 $51.31
 JH – Novitas Solutions Arkansas, Colorado, New Mexico, Oklahoma, Texas Louisiana, Mississippi $35.92 $51.33
 JL – Novitas Solutions Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania; Part B services include Arlington and Fairfax counties in VA, and the city of Alexandria, VA $35.92 $51.33
 JN – First Coast Service Options (FCSO) Florida, Puerto Rico, U.S. Virgin Islands $35.92 $51.33
 JM–Palmetto Government Benefits Administrators (PGBA)North Carolina, South Carolina, Virginia, West Virginia $35.91 $51.31
 JE – Noridian Healthcare Solutions California, Hawaii, Nevada, American Samoa, Guam, Northern Mariana Islands $35.91 $51.31
 JF – Noridian Healthcare SolutionsAlaska, Arizona, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming $35.91 $51.31
 J5 – Wisconsin Physician Services (WPS) Iowa, Kansas, Missouri, Nebraska $35.92 $51.31
 J8 – Wisconsin Physician Services (WPS) Indiana, Michigan $35.92 $51.31
J15 – CGSKentucky, Ohio$35.92$51.31
JJ–Palmetto Government Benefits Administrators (PGBA) Alabama, Georgia, Tennessee $35.91 $51.31
 JM–Palmetto Government Benefits Administrators (PGBA)North Carolina, South Carolina, Virginia, West Virginia $35.91 $51.31
 JE – Noridian Healthcare Solutions California, Hawaii, Nevada, American Samoa, Guam, Northern Mariana Islands $35.91 $51.31
 JF – Noridian Healthcare SolutionsAlaska, Arizona, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming $35.91 $51.31
 J5 – Wisconsin Physician Services (WPS) Iowa, Kansas, Missouri, Nebraska $35.92 $51.31
J8 – Wisconsin Physician Services (WPS) Indiana, Michigan $35.92 $51.31
J15 – CGSKentucky, Ohio$35.92$51.31

On March 31, 2020, CMS published new specimen collection codes for laboratories billing for COVID-19 testing.  To identify and reimburse specimen collection for COVID-19 testing, CMS established two Level II HCPCS codes, effective with line item date of service on or after March 1, 2020:

  • G2023 – Specimen collection for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), any specimen source.

  • G2024 – Specimen collection for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), from an individual in a skilled nursing facility or by a laboratory on behalf of a home health agency, any specimen source.

These codes are billable by clinical diagnostic laboratories. (See MLN Connects, “COVID-19: Regulatory Changes, Telehealth Billing, and Specimen Collection Codes.” Published March 31, 2020).

III.   Billing for COVID-19 Diagnostic Testing to Private Payors:

Private payors are also taking measures to encourage COVID-19 diagnostic testing of their beneficiaries.  The following are the measures taken by five of the largest national payors in relation to COVID-19 diagnostic testing.[7]

  • Aetna[8]
    • Aetna will waive co-pays for all diagnostic testing related to COVID-19.
  • Anthem[9]
    • Anthem will cover the cost of coronavirus testing with no out-of-pocket cost.
    • Anthem also confirms that prior authorization is not required for diagnostic services related to COVID-19 testing.
    • Anthem’s affiliated plans will continue to waive copays, coinsurance and deductibles for diagnostic tests for COVID-19, and extending this to include waiver of copays, coinsurance, and deductibles for visits associated with in-network COVID-19 testing, whether the care is received in a doctor’s office, urgent care center or emergency department.
  • Blue Cross Blue Shield (General Association)[10]
    • BCBS announced that its network of 36 independent and locally operated companies will:
      • waive prior authorizations for diagnostic tests and covered services for COVID-19, and
      • cover those tests at no cost share to members.
    • This applies to fully insured, individual, and Medicare Advantage plan members, and plans are working with state Medicaid and CHIP agencies to ensure people have access to needed testing and services.
  • Cigna[11]
    • Cigna is covering the cost of coronavirus testing and waiving all co-pays or cost-shares for fully insured plans, including employer-provided coverage, Medicare Advantage, Medicaid, and individual market plans available through the Affordable Care Act.
    • Cigna also announced it will waive customers’ out-of-pocket costs for COVID-19 testing-related visits with in-network providers, whether at a doctor’s office, urgent care clinic, emergency room or via telehealth, through May 31, 2020.
  • UnitedHealthcare[12]
    • UHC is waiving costs for COVID-19 testing provided at approved locations in accordance with the CDC guidelines, as well as waiving copays, coinsurance and deductibles for visits associated with COVID-19 testing.
    • This coverage is not dependent on whether the care is received in a physician’s office, an urgent care center or an emergency department.
    • This coverage applies to Medicare Advantage and Medicaid members as well as commercial members.
    • UHC is also expanding provider telehealth access and waiving member cost sharing for COVID-19 testing-related visits.

IV.   Conclusion:

Liles Parker attorneys and staff are closely monitoring HHS, CMS and CDC guidance and will update this article as new information becomes available. Please contact us with questions or for assistance with your response to this unprecedented National Emergency.

COVID-19 TestingMary Soule Culter is an Associate Attorney at Liles Parker’s Washington, DC office.  She focuses her practice on regulatory health care compliance matters, fraud and abuse, and reimbursement issues. Questions regarding the Lab Testing Guidance for COVID-19?  Call Liles Parker, PLLC for a free consultation.  We can be reached at:  1 (800) 465-1906.

[1] Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, Issued on March 13, 2020, available at https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/.

[2] Determination that a Public Health Emergency Exists, issued by Secretary Azar on January 31, 2020, available at https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.

[3] CMS, “Notification to Surveyors of the Authorization for Emergency Use of the CDC 2019-Novel Coronavirus (2019-nCoV) Real-Time RT-PCR Diagnostic Panel Assay and Guidance for Authorized Laboratories,” available at https://www.cms.gov/medicareprovider-enrollment-and-certificationsurveycertificationgeninfopolicy-and-memos-states-and/notification-surveyors-authorization-emergency-use-cdc-2019-novel-coronavirus-2019-ncov-real-time-rt.

[4] Readers can monitor the list of FDA Emergency Use Authorizations for SARS-CoV-2 tests on the FDA’s website available at: https://www.fda.gov/medical-devices/emergency-situations-medical-devices/emergency-use-authorizations.

[5] CMS, “Press Release: CMS Develops Additional Code for Coronavirus Lab Tests”, available at https://www.cms.gov/newsroom/press-releases/cms-develops-additional-code-coronavirus-lab-tests.

[6] CMS, “Fact Sheet: Medicare Administrative Contractor (MAC) COVID-19 Test Pricing (PDF)”, available at https://www.cms.gov/files/document/mac-covid-19-test-pricing.pdf.

[7] Visit America’s Health Insurance Plans’ (AHIP) website for more payors’ plans related to COVID-19 diagnostic testing.  See AHIP, “Health Insurance Providers Respond to Coronavirus (COVID-19)”, available at https://www.ahip.org/health-insurance-providers-respond-to-coronavirus-covid-19/?fbclid=IwAR019orl2bXznUeWbmrldExyyrdt-dZ614xaowUgoc9IHXsOg0efo-iAwoA.

[8] CVS Health, “CVS Health announces COVID-19 resources for Aetna members”, available at https://cvshealth.com/newsroom/press-releases/cvs-health-announces-covid-19-resources-aetna-members.

[9] Anthem, “Anthem Issues Updates Regarding COVID-19 Testing and Care to Support Affiliated Health Plan Members”, available at https://ir.antheminc.com/news-releases/news-release-details/anthem-issues-updates-regarding-covid-19-testing-and-care?field_nir_news_date_value[min]=.

[10] BlueCross BlueShield, “Blue Cross and Blue Shield Companies Announce Coverage of Coronavirus Testing for Members and Other Steps to Expand Access to Coronavirus Care”, available at https://www.bcbs.com/press-releases/blue-cross-and-blue-shield-companies-announce-coverage-of-coronavirus-testing.

[11] Cigna, “Cigna Covers Cost Of Coronavirus Tests For Customers”, available at https://www.cigna.com/newsroom/news-releases/2020/cigna-covers-cost-of-coronavirus-tests-for-customers.

[12] UnitedHealthcare, “UnitedHealthcare Expands Access to Care, Support and Resources to Help People and Families Address COVID-19”, available at https://newsroom.uhc.com/news-releases/UnitedHealthcare-COVID-19.html.

Section 1135 Waiver Issues and COVID-19

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Call Liles Parker for Assistance with Section 1135 Waiver Issues(March 25, 2020):  On January 31, 2020, Secretary Alex Azar, of the US Department of Health & Human Services (HHS), used his authority under the Public Health Service Act to declare a public health emergency in the United States.[1] Secretary Azar determined that a public health emergency had existed nationwide since January 27, 2020. Subsequently, President Trump declared a National Emergency[2] on March 13, 2020 related to the current COVID-19 outbreak. When the HHS Secretary has declared a public health emergency and the President of the United States has declared a disaster or emergency under the Stafford Act or National Emergencies Act, the HHS Secretary is authorized to grant certain waivers or modifications in order to address the outbreak (referred to as a Section 1135 Waiver). Due to these two declarations, Secretary Azar has now been granted the power to waive certain Federal requirements in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) to ensure that sufficient health care items and services are available to meet the needs of enrolled individuals. This authority was granted March 15, 2020 with a retroactive effective date of March 1, 2020.

I.  State Medicaid Agencies Must Request a Section 1135 Waiver:

CMS has the authority to grant state and territorial Medicaid agencies a wider range of flexibilities under Section 1135 waivers. However, a Section 1135 Waiver is  not automatically granted. Each state or territory must assess their individual needs and file a request with CMS for specific waivers. In March 2020, CMS created an 1135 Medicaid & CHIP Checklist to assist states during emergencies.[3] This checklist includes some of the temporary flexibilities available to CMS. For example, the following Medicaid Authorizations can be requested:

  • Suspend Medicaid fee-for-service prior authorization requirements. Section 1135(b)(1)(C) allows for a waiver or modification of pre-approval requirements if prior authorization processes are outlined in detail in the State Plan for particular benefits

  • Require fee-for-service providers to extend pre-existing authorizations through which a beneficiary has previously received prior authorization through the termination of the emergency declaration

These are examples of the types of flexibilities that a state / territory can request but is not all inclusive. The 1135 waiver authority only applies to Federal requirements and does not apply to any State requirements for licensure or conditions of participation.[4] In addition, these waivers typically end no later than the termination of the emergency period, or 60 days from the date the waiver or modification is first published unless the Secretary extends the waiver by notice for additional periods of up to 60 days, up to the end of the emergency period.

CMS also has the authority to grant a “blanket” waiver or modification to a Medicare, Medicaid, or CHIP requirement. A blanket waiver is made when a determination has been made that all similarly situated providers in an emergency area need such a waiver or modification. A decision regarding a blanket waiver or modification is made based on the need and frequency of requests for specific waivers or modifications in response to the disaster or emergency.

As of March 24, 2020, CMS has issued the following guidance, directives and waivers, related to Medicaid and CHIP programs. We recommend providers carefully review the HHS, CMS, and / or CDC guidance specific to each service, discipline or facility type for complete details and keep in mind that due to the rapidly evolving nature of this public health emergency, guidance will need to be constantly updated.

II.  Section 1135 Waiver Opportunities:

On March 22, 2020, CMS announced a new Section 1115 demonstration opportunity to aid states with addressing the public health emergency. The COVID-19, Section 1115 waiver demonstration opportunity is effective retroactively to March 1, 2020 and will allow states to select from a variety of options to deliver the most effective care to their beneficiaries in light of the COVID-19 public health emergency.[5] This demonstration will allow states to extend home and community-based service (HCBS) flexibilities to beneficiaries receiving long-term supports and services (LTSS) or could be used by states to accept self-attestations of applicant resources to assist Medicaid agencies in making more streamlined eligibility determinations. Any section 1115 demonstrations approved pursuant to this opportunity are time limited and will expire no later than 60 days after the end of the public health emergency.

  • 1915(c) Appendix K Template

 CMS developed Appendix K as a standalone appendix to be utilized by states during emergency situations to request amendments to approved 1915(c) waivers. Appendix K includes actions that states may take under the existing Section 1915(c) home and community-based waiver authority in order to respond to an emergency. Appendix K may be completed retroactively as needed by the state. CMS has drafted a template and instructions to assist with the drafting of this appendix. As of this date, Pennsylvania, Washington, and West Virginia have applied for Appendix K waivers and received approvals from CMS.[6]

  • Medicaid Disaster State Plan Amendment Template

Each Medicaid program has a state plan which describes the state’s rules related to eligibility, benefits and payments. CMS created a Disaster State Plan Amendment (SPA) template to allow states to submit one combined request for all temporary changes that states may wish to make to their programs. CMS also released instructions to assist states in completing the SPA and in responding to the COVID-10 national emergency.[7]

III.  Florida 1135 Waivers:

On March 13, 2020, Florida became the first state to file a request for a 1135 waiver to address the challenges posed by COVID-19. On March 16, 2020, CMS filed a response to Florida’s 1135 waiver requests.[8] CMS granted a number of waiver requests to help Florida combat this emerging crisis.

  •  Florida Provider Enrollment Changes:

In general, a state Medicaid agency must enroll furnishing providers. However, Florida is not required to create a temporary provisional enrollment for providers who are enrolled with another state Medicaid agency or Medicare. Under current CMS policy, Florida may reimburse otherwise payable claims from an out-of-state provider not currently enrolled in Florida’s Medicaid program if five criteria have been met.

  • The item or service is furnished by an institutional provider, individual practitioner, or pharmacy at an out-of-state/territory practice location– i.e., located outside the geographical boundaries of the reimbursing state/territory’s Medicaid plan,
  • The National Provider Identifier (NPI) of the furnishing provider is represented on the claim,
  • The furnishing provider is enrolled and in an “approved” status in Medicare or in another state/territory’s Medicaid plan,
  • The claim represents services furnished, and;
  • The claim represents either: A single instance of care furnished over a 180-day period, OR  Multiple instances of care furnished to a single participant, over a 180-day period[9]

For the duration of the Section 1135 waiver, CMS has agreed to waive the fifth criteria listed above. Therefore, providers may furnish care to more than one beneficiary and may treat multiple instances of care over a 180-day period as long as the other four criteria have been met.

Florida has also been granted the ability to perform an expedited enrollment for an out-of-state facility for a certified provider who is enrolled in Medicare or with another state Medicaid program in order to accommodate participants who were displaced by the emergency.

For providers not currently enrolled with Medicare or a state Medicaid agency, CMS has agreed to waive four screening requirements to allow Florida to provisionally, temporarily enroll providers. Specifically, the following screening requirements may be waived:

  1. Payment of the application fee – 42 C.F.R. 455.460.
  2. Criminal background checks associated with Fingerprint-based Criminal Background Checks – 42 C.F.R. 455.434.
  3. Site visits – 42 C.F.R. 455.432.
  4. In-state/territory licensure requirements – 42 C.F.R. 455.412.

However, CMS is still requiring Florida to meet a number of minimum documentation requirements before enrolling providers to ensure the safety of patients.  Finally, Florida may temporarily cease revalidation of providers who are located in Florida or who are directly impacted by the emergency. These provider enrollment emergency relief efforts also apply to CHIP.

  • Waiver of Service Prior Authorization (PA) Requirements:

CMS has agreed to waive any prior authorization processes outlined in the State of Florida’s state plan.  This waiver applies to services provided on or after March 1, 2020 through the termination of the emergency declaration for beneficiaries with a permanent residence in the geographic area of the public health emergency.

  • Waiver for Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

For Medicaid-certified nursing facilities, Level 1 and Level 2 assessments have been waived for 30 days. All new admissions can be treated like exempted hospital discharges. After 30 days, any new admissions with mental illness or intellectual disability should receive a Resident Review as soon as resources become available.

  • Waiver to Allow Evacuating Facilities to Provide Services in Alternative Settings, such as a Temporary Shelter When a Provider’s Facility is Inaccessible:

Facilities such as nursing facilities, intermediate care facilities for individuals with intellectual and developmental disabilities, psychiatric residential treatment facilities, and hospitals nursing facilities are to be fully reimbursed for services rendered during an emergency evacuation to an unlicensed facility (where an evacuating facility continues to render services). After the initial 30 days, CMS would require that the unlicensed facility either seek licensure or the evacuating facility would need to seek new placement for the individuals.

  • State Fair Hearing Requests and Appeal Deadlines:

CMS has granted Florida the authority to modify the timeframes associated with appeals and fair hearings. Specifically, CMS granted three modifications to the state fair hearing and decision-making process:

  1. CMS has authorized the state to modify the timeframe for managed care plans to resolve appeals to zero days. If the state uses this authority, it would mean that all appeals filed between March 1, 2020 and June 29, 2020 are deemed to immediately satisfy the exhaustion requirement in 42 CFR 438.408(f)(1) and allow enrollees to proceed directly to the state fair hearing.
  2. Managed care enrollees have 120 days to exercise their appeal rights and file for a fair hearing under 42 CFR 438.408(f)(2). Any managed care enrollee for whom the 120 day deadline would have occurred between March 1, 2020 through June 29, 2020 is granted an extension to request a state fair hearing. An enrollee can be allowed up to an additional 120 days to make this request, however, all requests must be made no later than June 29, 2020.
  3. Modification of the timeframes in 42 CFR 431.221(d) to allow beneficiaries to have more than 90 days to request a state fair hearing for eligibility or fee-for-service issues.

CMS also granted a number of flexibilities the state can utilize in operating their appeals and fair hearing process:

  • The state may suspend adverse actions for individuals for whom the state has completed a determination but either: 1) has not yet sent the notice; or 2) who the state believes likely did not receive the notice.
  • The state may delay scheduling fair hearings and issuing fair hearing decisions.
  • The state may offer to continue benefits to individuals who are requesting a fair hearing if the request comes later than the date of the action.

IV.  Washington 1135 Waivers:

On March 15, 2020, Washington state submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 19, 2020, CMS filed a response to Washington’s 1135 waiver requests.[10] CMS granted a number of waiver requests to help Washington combat this emerging crisis.

  • Provider Enrollment; Waiver of Service Prior Authorization (PA) Requirements; Waiver for Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days; Waiver to Allow Evacuating Facilities to Provide Services in Alternative Settings, such as a Temporary Shelter When a Provider’s Facility is Inaccessible; and State Fair Hearing Requests and Appeal Deadlines:

The same 1135 waivers regarding provider enrollment, waiver of service prior authorization (PA) requirements; waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments for 30 Days; waiver to allow evacuating facilities to provide services in alternative settings, such as a temporary shelter when a provider’s facility is inaccessible; and state fair hearing requests and appeal deadlines were granted to Washington as were previously granted in Florida (see above).

In addition, Washington state requested a waiver of Drug Enforcement Administration’s (DEA) requirements around medications. However, CMS stated that it was unable to waive relief from the DEA requirements. However, CMS stated that it would consult with DEA to determine if these requirements could be waived during the public health emergency.

  • Public Notice and Tribal Consultation:

CMS has also granted Washington a partial waiver of public notice. For public notice for state plan amendments (SPAs) that only provide or increase beneficiary access to items and services related to COVID-19 (such as cost sharing waivers, payment rate increase, or amendments to ABPs adding services or providers) and would not be a restriction or limitation on payment or services or otherwise burden beneficiaries and providers, and that are temporary, with a specified sunset date related to COVID-19, CMS approves the state’s request to waive public notice requirements. However, CMS has encouraged Washington to make all relevant information available to the public. Similarly, the state has flexibility in modifying their tribal consultation timeframe, including shortening the number of days before submission or conducting consultation after submission of the SPA.

V.  Alabama 1135 Waivers:

On March 18, 2020, Alabama submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to Alabama’s 1135 waiver requests.[11] CMS granted a waiver to help Alabama to combat this emerging crisis.

  • Waiver for Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same Section 1135 waiver regarding pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments for 30 Days was granted to Alabama as was previously granted in Florida (see above).

 VI.  Arizona 1135 Waivers:

On March 17, 2020, Arizona submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to Arizona’s 1135 waiver requests.[12] CMS granted a number of waiver requests to help Arizona combat this emerging crisis.

  • Provider Enrollment and Waiver for Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same 1135 waivers regarding provider enrollment and waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments for 30 Days were granted to Arizona as were previously granted in Florida (see above).

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

CMS has also granted Arizona the ability to suspend prior authorization requirements and permitted services approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization, through the termination of the public health emergency.

 VII.  California 1135 Waivers:

On March 16, 2020 and March 19, 2020, California submitted a request for a 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to California’s Section 1135 waiver requests.[13] CMS granted a number of waiver requests to help California combat this emerging crisis.

  • Provider Enrollment:

The same 1135 waivers regarding provider enrollment were granted to California as were previously granted in Florida (see above).

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

 CMS has also granted California the ability to suspend, waive, or modify prior authorization requirements.

  • State Fair Hearing Requests and Appeal Deadlines:

CMS has granted California the authority to modify the timeframes associated with appeals and fair hearings. Specifically, CMS granted three modifications to the state fair hearing and decision-making process:

  1. CMS has authorized the state to modify the timeframe for managed care plans to resolve appeals to no less than one day. If the state uses this authority, it would mean that all appeals filed between March 1, 2020 and the end of the public health emergency are deemed to satisfy the exhaustion requirement in 42 CFR 438.408(f)(1) after one day (or more if that is the timeline elected by the state) and allow enrollees to file an appeal to the state fair hearing level.
  2. Managed care enrollees have 120 days to exercise their appeal rights and file for a fair hearing under 42 CFR 438.408(f)(2). Any managed care enrollee for whom the 120-day deadline would have occurred between March 1, 2020 through the end of the public health emergency, are granted an extension to request a state fair hearing. An enrollee can be allowed up to an additional 120 days to make this request.
  3. Modification of the timeframes in 42 CFR 431.221(d) to allow beneficiaries to have more than 90 days, up to an additional 120 days to request a fair hearing for an eligibility or fee for service appeal.
  • Provision of Services in Alternative Settings:

Facilities such as nursing facilities, intermediate care facilities for individuals with intellectual and developmental disabilities, psychiatric residential treatment facilities, and hospitals nursing facilities are to be fully reimbursed for services rendered to an unlicensed facility provided that the State makes a reasonable assessment that the facility meets minimum standards, consistent with reasonable expectations in the context of the current public health emergency, to ensure the health, safety and comfort of beneficiaries and staff. This arrangement would be effective for the duration of the Section 1135 waiver.

 VIII.  Illinois 1135 Waivers:

On March 19, 2020, Illinois submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to Illinois’ 1135 waiver requests.[14] CMS granted a number of waiver requests to help Illinois combat this emerging crisis.

  • Provider Enrollment and Suspend Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same Section 1135 waivers regarding provider enrollment and pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments were granted to Illinois as were previously granted in Florida (see above).

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

CMS has also granted Illinois the ability to suspend prior authorization requirements and permitted services approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization, through the termination of the public health emergency.

  • State Fair Hearing Requests and Appeal Timelines and the Provision of Services in Alternative Settings:

The same Section 1135 waivers regarding the state fair hearing requests and appeal timelines and the provision of services in alternative settings were granted to Illinois as were previously granted in California (see above).

 IX.  Louisiana 1135 Waivers:

On March 17, 2020, Louisiana submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to Louisiana’s 1135 waiver requests.[15] CMS granted a number of waiver requests to help Louisiana combat this emerging crisis.

  • Provider Enrollment and Suspend Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same 1135 waivers regarding provider enrollment and waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments were granted to Louisiana as were previously granted in Florida (see above).

  • State Fair Hearing Requests and Appeal Timelines and the Provision of Services in Alternative Settings:

The same 1135 waivers regarding the state fair hearing requests and appeal timelines and the provision of services in alternative settings were granted to Louisiana as were previously granted in California (see above).

X.  Mississippi 1135 Waiver Issues:

On March 18, 2020, Mississippi submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to Mississippi’s 1135 waiver requests.[16] CMS granted a number of waiver requests to help Mississippi combat this emerging crisis.

  • Provider Enrollment and Suspend Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same 1135 waivers regarding provider enrollment and waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments were granted to Mississippi as were previously granted in Florida (see above).

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

CMS has also granted Mississippi the ability to suspend prior authorization requirements and permitted services approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization, through the termination of the public health emergency.

  • State Fair Hearing Requests and Appeal Timelines and the Provision of Services in Alternative Settings:

The same 1135 waivers regarding the state fair hearing requests and appeal timelines and the provision of services in alternative settings were granted to Mississippi as were previously granted in California (see above).

XI.  New Hampshire 1135 Waivers:

On March 18, 2020, New Hampshire submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to New Hampshire’s 1135 waiver requests.[17] CMS granted a number of waiver requests to help New Hampshire combat this emerging crisis.

  • Provider Enrollment and Suspend Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same 1135 waivers regarding provider enrollment and waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments were granted to New Hampshire as were previously granted in Florida (see above). However, New Hampshire was not granted the ability to temporarily cease revalidation of providers.

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

 CMS has also granted New Hampshire the ability to suspend prior authorization requirements and permitted services approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization, through the termination of the public health emergency.

  • State Fair Hearing Requests and Appeal Timelines and the Provision of Services in Alternative Settings:

The same 1135 waivers regarding the state fair hearing requests and appeal timelines and the provision of services in alternative settings were granted to New Hampshire as were previously granted in California (see above).

XII.  New Mexico 1135 Waivers:

On March 19, 2020, New Mexico submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to New Mexico’s 1135 waiver requests.[18] CMS granted a number of waiver requests to help New Mexico combat this emerging crisis.

  • Provider Enrollment and Suspend Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same 1135 waivers regarding provider enrollment and waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments were granted to New Mexico as were previously granted in Florida (see above).

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

 CMS has also granted New Mexico the ability to suspend prior authorization requirements and permitted services approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization, through the termination of the public health emergency.

  • State Fair Hearing Requests and Appeal Timelines:

The same 1135 waivers regarding the state fair hearing requests and appeal timelines were granted to New Mexico as were previously granted in California (see above).

XIII.  New Jersey 1135 Waivers:

On March 20, 2020, New Jersey submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to New Jersey’s 1135 waiver requests.[19] CMS granted a number of waiver requests to help New Jersey combat this emerging crisis.

  • Provider Enrollment and Suspend Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same 1135 waivers regarding provider enrollment and waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments were granted to New Jersey as were previously granted in Florida (see above).

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

CMS has also granted New Jersey the ability to suspend prior authorization requirements and permitted services approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization, through the termination of the public health emergency.

  • State Fair Hearing Requests and Appeal Timelines and the Provision of Services in Alternative Settings:

The same 1135 waivers regarding the state fair hearing requests and appeal timelines and the provision of services in alternative settings were granted to New Jersey as were previously granted in California (see above).

XIV.  North Carolina 1135 Waiver:

On March 17, 2020, North Carolina submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to North Carolina’s 1135 waiver requests.[20] CMS granted a number of waiver requests to help North Carolina combat this emerging crisis.

  • Provider Enrollment and Suspend Pre-Admission Screening and Annual Resident Review (PASRR) Level I, Level II Assessments for 30 Days:

The same 1135 waivers regarding provider enrollment and waiver for pre-admission screening and annual resident review (PASRR) Level I, Level II Assessments were granted to North Carolina as were previously granted in Florida (see above).

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements:

 CMS has also granted North Carolina the ability to suspend prior authorization requirements.

  • State Fair Hearing Requests and Appeal Timelines and the Provision of Services in Alternative Settings:

The same 1135 waivers regarding the state fair hearing requests and appeal timelines and the provision of services in alternative settings were granted to North Carolina as were previously granted in California (see above).

XV.  Virginia 1135 Waivers:

On March 16, 2020, Virginia submitted a request for a Section 1135 waiver to address the challenges posed by COVID-19. On March 23, 2020, CMS filed a response to Virginia’s 1135 waiver requests.[21] CMS granted a number of waiver requests to help Virginia combat this emerging crisis.

  • Temporarily Suspend Medicaid Fee-for-Service Prior Authorization Requirements and Extend Pre-Existing Authorizations for which a Beneficiary has Previously Received Prior Authorization Through the End of the Public Health Emergency:

CMS has granted Virginia the ability to suspend prior authorization requirements and permitted services approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization, through the termination of the public health emergency.

  • State Fair Hearing Requests and Appeal Timelines:

The same 1135 waivers regarding the state fair hearing requests and appeal timelines were granted to Virginia as were previously granted in California (see above).

XVI.  Conclusion:

CMS has reiterated their commitment to continue to expeditiously review and approve as appropriate all Section 1135 waivers and other requests received by the agency to provide states with the maximum amount of flexibility possible to care for their Medicaid beneficiaries during this public health emergency. This commitment has been demonstrated by the quick review and approval of multiple 1135 waiver requests. As additional Section 1135 waivers are approved by CMS, they will be posted on the CMS and Medicaid.gov website.[22] It is expected that additional 1135 waivers will be requested in the coming days / weeks.

Liles Parker attorneys and staff are closely monitoring HHS, CMS and CDC guidance and will update this article as new information becomes available.  For an overview on additional CMS initiatives to assist health care providers, you may wish to review our article dated March 27, 2020, titled “Coronavirus Update — New FAQs and Toolkits for Telehealth, Telemedicine & Medicare Provider Enrollment.”  Please contact us with questions or for assistance with your response to this unprecedented National Emergency.

Call Meaghan McCormick for help with an 1135 waiver.Meaghan McCormick is an Associate at Liles Parker, Attorneys & Clients at Law.  She has experience representing health care providers and suppliers around the country in connection with a wide range of health law matters.  Questions regarding the impact of recent coronavirus guidance on your organization?  Call Liles Parker, PLLC for a free consultation.  We can be reached at:  1 (800) 465-1906.

[1] Determination that a Public Health Emergency Exists, issued by Secretary Azar on January 31, 2020.  A link to the determination can be found here.

[2] Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, Issued on March 13, 2020.  A link to the declaration can be found here.

[3] Access to the 1135 Medicaid & CHIP Checklist can be accessed here.

[4] CMS guidance regarding the 1135 waivers can be accessed here.

[5] Information regarding the COVID-19: 1115 Waiver Demonstrations including an application template can be accessed here.

[6] Information regarding Appendix K including the templates, instructions, and CMS approval letters can be accessed here.

[7] Information regarding the Medicaid State Plan Disaster Relief SPA including the template and instructions can be accessed here.

[8] A copy of CMS’ response to Florida’s request for 1135 flexibilities can be accessed here.

[9] Medicaid Provider Enrollment Compendium can be accessed here.

[10] A copy of CMS’ response to Washington’s request for 1135 flexibilities can be accessed here.

[11] A copy of CMS’ response to Alabama’s request for 1135 flexibilities can be accessed here.

[12] A copy of CMS’ response to Arizona’s request for 1135 flexibilities can be accessed here.

[13] A copy of CMS’ response to California’s request for 1135 flexibilities can be accessed here.

[14] A copy of CMS’ response to Illinois’ request for 1135 flexibilities can be accessed here.

[15] A copy of CMS’ response to Louisiana’s request for 1135 flexibilities can be accessed here.

[16] A copy of CMS’ response to Mississippi’s request for 1135 flexibilities can be accessed here.

[17] A copy of CMS’ response to New Hampshire’s request for 1135 flexibilities can be accessed here.

[18] A copy of CMS’ response to New Mexico’s request for 1135 flexibilities can be accessed here.

[19] A copy of CMS’ response to Florida’s request for 1135 flexibilities can be accessed here.

[20] A copy of CMS’ response to North Carolina request for 1135 flexibilities can be accessed here.

[21] A copy of CMS’ response to Virginia’s request for 1135 flexibilities can be accessed here.

[22] Access to all CMS 1135 approval letters can be accessed here.

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