COVID-19

Published on: April 8, 2022

HHS to Allow Late PRF Reporting

Healthcare providers who missed a Provider Relief Fund (PRF) reporting deadline may get a second chance. In response to overwhelming industry outcry over its attempts to clawback PRF payments, the Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), which currently administers the PRF, will being accepting applications from providers who missed a reporting deadline to file a late report. Requests to file a late report must be filed between April 11 and April 22 and must include an “extenuating circumstance” justifying the request.

The PRF is a $178 billion fund created by Congress through the CARES Act and administered to provide financial relief to healthcare providers during the COVID-19 pandemic. HHS has subdivided the PRF into various general and targeted distributions. These distributions were paid to providers in several waves between April 2020 and the present. The first payments under the PRF, in April 2020, were unsolicited and were deposited directly into providers’ bank accounts without prior application or notification. While this infusion of cash was likely a welcome relief at the time, it came with strings attached. The two major requirements for a provider to keep the PRF payment were to only use the funds for specific COVID-related purposes and to file a report with HRSA justifying use of the funds.

The first of these reports were due on September 30, 2021, but that date was later extended into early December 2021. In March 2022, HRSA began sending letters to providers who had not filed reports indicating that they were now required to return the full amount of any PRF funds received within 30 days. After significant outcry from providers, representatives, and industry groups, HRSA has backtracked and will now accept requests to file late reports.

Published on: March 14, 2022

FDA Outlines Termination Plan for COVID-19 EUAs and Enforcement Policies for Medical Devices and PPE

by Wachler & Associates, P.C.

On February 22, 2022, the US Food and Drug Administration (FDA) hosted a webinar detailing its current transition plans for medical devices marketed pursuant to either Emergency Use Authorization (EUA) or Enforcement Policies during the COVID-19 public health emergency (PHE). The primary purposes of the webinar were to help prepare manufacturers and other stakeholders for the upcoming transition back to normal operations, provide examples illustrating the transition policies, and outline the 180-day transition period timeline. Providers that may be affected are encouraged to be proactive and take steps to understand FDA’s proposed plan and become prepared to handle the upcoming transition.

The FDA’s transition plans and policies are laid out in two recent draft guidance documents, Transition Plan for Medical Devices Issued EUAs During the COVID-10 PHE (EUA Transition Plan) and Transition Plan for Medical Devices That Fall Within Enforcement Policies Issued During the COVID-19 PHE (Enforcement Policy Transition Plan), which are to be implemented with a focus on four key principles:

an orderly, transparent transition with consistent FDA-manufacturer interactions,

Published on: February 14, 2022

EKRA Continues to Cause Confusion for Clinical Labs

by Wachler & Associates, P.C.

The Eliminating Kickbacks in Recovery Act (“EKRA”) is an incredibly broad and incredibly vague criminal statute that continues to create compliance issues for clinical laboratories. Many arrangements between clinical laboratories and other entities that were previously compliant, or which are currently authorized under other federal statutes, may be unlawful under EKRA.

Congress enacted EKRA in 2018 and, throughout its drafting, it was intended to address patient brokering and kickback schemes in addiction treatment and recovery. For example, EKRA was targeted at individuals who received kickbacks for steering patients into sober living and recovery homes. However, shortly before EKRA was passed and with little consideration of the implications, the words “or laboratory” were inserted into the draft such that EKRA now likely applies to all referrals to clinical laboratories, regardless of payor and regardless of whether the testing relates to addiction treatment or recovery.

EKRA broadly prohibits paying, offering, receiving, or soliciting any remuneration in return for referrals to recovery homes, clinical treatment facilities, or laboratories. Further, EKRA is a criminal statute, the penalties for violation of which, up to 10 years in prison and fines up to $200,000, cannot be taken lightly. Like two other major federal healthcare fraud, waste, and abuse laws, the Anti-Kickback Statute and the Physician Self-Referral Law (commonly known as the Stark Law), EKRA contains a few exceptions. However, they are far fewer in number and often narrower than their counterparts in the older statutes.

Published on: February 7, 2022

HHS to Audit More Providers That Received COVID-19 Relief Funds

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) recently announced additional audits of certain healthcare providers that received funding from the Provider Relief Fund (PRF). These audits will focus on whether hospitals that received PRF payments have complied with the surprise billing provisions of the PRF terms and conditions. HHS has long promised “significant enforcement” related to the PRF, a promise which is beginning to take effect.

The PRF was created by Congress through the CARES Act and was designed to provide financial relief to healthcare providers during the COVID-19 pandemic. Acceptance of a PRF payment is conditioned on, among other things, the provider agreeing to use the funds only for healthcare related expenses and lost revenue attributable to coronavirus, and to file reports demonstrating compliance with the conditions of the payment.

Providers who received and retained payments through the PRF are required to file reports justifying their use of the funds. Providers must report information on healthcare-related expenses attributable to coronavirus, lost revenue attributable to coronavirus, other pandemic assistance received, and administrative data. Providers who received more than $500,000 in aggregate payments are required to report some data elements in greater detail, including specific information regarding operations, personnel, supplies, equipment, facilities, and several other categories. Some providers will be required to report significant amounts of financial information in significant detail, which may require time to compile or calculate.

Published on: January 20, 2022

New Guidance on Insurance Coverage of OTC COVID-19 Tests

by Wachler & Associates, P.C.

On January 10, 2022, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (DOT) (collectively, the Departments) jointly issued FAQs regarding the implementation of required insurance coverage for at-home COVID-19 tests under the Families First Coronavirus Response Act (FFCRA). Pursuant to the new guidance, insurance plans and issuers must provide coverage over the counter (OTC) COVID-19 tests without cost-sharing requirements, prior authorization, individualized clinical assessment, or other medical management requirements with respect tests purchased on or after January 15, 2022 and during the public health emergency. This new requirement is in addition to the existing requirement that insurers cover COVID-19 testing where there is an individualized clinical assessment by an authorized provider.

With respect to OTC COVID-19 tests obtained without a healthcare provider’s involvement, plans and issuers must provide coverage for the cost of the test at no expense to the participant, beneficiary, or enrollee, unless the conditions of a safe harbor discussed below are met. While plans or issuers are encouraged to reimburse sellers of OTC tests directly, they are not required to do so. Some plans or issuers may require beneficiaries to provide upfront payment and then submit a claim for reimbursement after the fact.

If a plan or issuer provides direct coverage of OTC COVID-19 tests, it generally may not limit coverage to only tests provided through preferred pharmacies or other retailers. However, under a safe harbor, the Departments have indicated they will not take enforcement action related to OTC test coverage against a plan or issuer that provides coverage for such tests by arranging for direct coverage through both its primary pharmacy network and a direct-to-consumer shipping program, and otherwise limits reimbursement for OTC tests from non-preferred pharmacies or other retailers to no less than the actual price, or $12 per test, whichever is lower. Under this safe harbor, plans and issuer may not impose any prior authorization or other medical management requirements on beneficiaries and may not require any upfront out of pocket payments by beneficiaries. Additionally, under this safe harbor, the direct-to-consumer shipping program may be provided through one or more in-network provider(s) or another entity designated by the plan or issuer.

Published on: January 13, 2022

HHS Releases Additional $9 Billion in Provider Relief Funds

by Wachler & Associates, P.C.

On December 14, 2021, the Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), announced the release of an approximately $9 billion distribution in Provider Relief Fund (PRF) Phase 4 payments to healthcare providers who have experienced lost revenues and expenses due to the COVID-19 pandemic. This distribution is part of a previously announced $25.5 billion funding for healthcare providers affected by the COVID-19 pandemic, which also included an allocation of $8.5 billion from the American Rescue Plan (ARP) for providers who provide services to rural Medicaid, Children’s Health Insurance Program (CHIP), or Medicare beneficiaries. According to HHS’ state-by-state breakdown of the Phase 4 payments, these new payments have been received by more than 69,000 providers in all 50 states, Washington D.C., and eight territories. The average payment under this new distribution is $58,000 for small providers, $289,000 for medium providers, and $1.7 million for large providers.

PRF Phase 4 payments are based on providers’ lost revenue and expenditures between July 1, 2020 and March 31, 2021, in conformity with the requirements of the Coronavirus Response and Relief Supplemental Appropriations Act of 2020 (CRRSAA). PRF Phase 4 is intended to reimburse smaller providers for their lost revenues and pandemic-related expenses at a higher rate compared to larger providers. This characteristic stems from the Biden Administration’s ongoing policy focus on social equity, as smaller providers tend to operate on thinner margins and often serve vulnerable or isolated communities when compared to larger providers. Because Medicaid, CHIP, and Medicare patients tend to be lower income and have greater and more complex medical needs, HRSA is distributing 25% of PRF Phase 4 funding as bonus payments for providers who serve these individuals. HRSA will price these bonus payments at the generally higher Medicare rates in an attempt to promote equity amongst providers serving low-income children, pregnant women, people with disabilities, and seniors. Similar to the ARP Rural payments announced in November 2021, HRSA is using Medicare reimbursement rates to calculate these Phase 4 payments in an effort to mitigate disparities due to varying Medicaid reimbursement rates.

HHS has also updated the Terms and Conditions for Phase 4 and ARP Rural payments to require that PRF payments are being properly used in response to the financial impact of COVID-19. Recipients who receive greater than $10,000 are required to notify HHS of any merger or acquisition activity with another healthcare provider. Providers who report a merger or acquisition may be more likely to be audited.

Published on: December 6, 2021

Administration Posed to Expand COVID Testing Insurance Coverage Mandate

by Wachler & Associates, P.C.

The Biden Administration recently announced plans to require commercial insurers to cover over-the-counter and at-home COVID-19 tests. Commercial insurers are currently required to cover in vitro diagnostic (IVD) products that test for COVID-19. Most often, this has taken the form of clinical laboratory testing wherein the lab or other provider submits a claim to the insurer for reimbursement. However, many providers have encountered pushback from insurers, usually based on the unclear criteria of the current mandate. More guidance is due to be released on January 15, 2022.

Currently, commercial insurers are required by the Families First Coronavirus Response Act (FFCRA) and the CARES Act to cover, without cost-sharing requirements, IVD products for the detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19 that are approved by the Food and Drug Administration or otherwise authorized. The implementation of this coverage mandate is governed by guidance jointly released by the Departments of Health and Human Services (HHS), Labor (DOL), and Transportation (DOT).

In general, this guidance requires that the test be covered where it is medically appropriate for the individual, as determined by the individual’s attending healthcare provider in an “individualized clinical assessment,” consulting CDC guidelines as appropriate and in accordance with accepted standards of current medical practice. The provider need not be the patient’s attending provider as long as they are authorized and acting within the scope of their license. The insurer is then required to cover the test without prior authorization, the presence of symptoms, or other medical management criteria. Where the patient seeks a test from a licensed or authorized provider, insurers are generally required to assume that the test reflects an “individualized clinical assessment” and cover the test. On the other hand, under the mandate, insurers are not required to cover testing for back to work/school purposes or for general screening. Testing for travel-relating purposes may be covered under the mandate, depending on the circumstances, but is often a matter of contentious debate that thus far has not been resolved by federal guidance.

Published on: December 1, 2021

HHS Reverses Course, COVID-19 LDTs to Require an EUA

by Wachler & Associates, P.C.

On November 15, 2021, the Department of Health and Human Services (HHS) issued a press release explaining the agency’s intent to withdraw a policy established during the Trump Administration that limited the Food and Drug Administration’s (FDA) ability to regulate COVID-19 laboratory-developed tests (LDTs). The new policy allows the FDA to require clinical labs to submit emergency use authorization (EUA) requests for such tests. On the same day, FDA published a revised Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency and an Umbrella EUA for serial testing using certain LDTs, as well as updated the majority of its FAQs on Testing for COVID-19.

In an FDA press release also published on November 15, the agency outlined its current areas of focus for EUA reviews:

At-home and point-of-care (POC) diagnostic tests for use with or without a prescription and that can be manufactured in high volumes;

Published on: November 29, 2021

Medicare Audits Return in Full Force

by Wachler & Associates, P.C.

After a hiatus during the height of the COVID-19 pandemic, Medicare audits have resumed in full force. Providers and suppliers should be prepared to respond to audits that were paused during the pandemic, the initiation of new audits, and audits relating to the various pandemic relief programs.

In early 2020, the Centers for Medicare and Medicaid Services (CMS) directed its contractors to pause audit activities as auditors were unable to work in the office and healthcare providers were reeling from the multiple impacts of the pandemic. CMS both paused in-progress audits and temporarily halted the initiation of new audits.

In late 2020, CMS authorized Medicare Administrative Contractors (MACs) to resume post-payment audits. Over the last year, CMS has authorized the resumption of nearly every type of audit and the initiation of new audits. As Medicare contractors process these directives and restart their audit activities, Medicare provides are seeing a wave of documentation requests, audit determinations, overpayment demands, and appeal decisions. Audits and claims appeals that have been dormant for a year or longer are suddenly active. New audits are being initiated for the first time in over year. And, in addition to audits by Medicare and other payors, providers must face compliance challenges and potential audits from pandemic relief programs, such as the Provider Relief Fund.

Published on: November 15, 2021

CMS Releases Vaccine Requirement for Some Medicare Providers

by Wachler & Associates, P.C.

On November 5, 2021, the Centers for Medicare and Medicaid Services (CMS) released an interim final rule with comment period to require COVID-19 vaccination for staff of certain healthcare providers. The rule applies only to certain providers, but is expansive in scope where it is applicable. Under the rule, affected staff must receive their first vaccine dose by December 6, 2021 and be fully vaccinated by January 4, 2022.

The CMS vaccine requirement does not apply to all Medicare-enrolled providers and suppliers. CMS issued the mandate under its authority to set Conditions of Participation for certain providers. Therefore, only these specific, Medicare-certified provider types are directly subject to the requirement:

Ambulatory Surgical Centers (ASCs)