COVID-19 Waivers Update

by James C. Sherlock

I provide here an update on the status of waivers of federal health care laws in response to the COVID-19 crisis. All of the source materials are official government websites.

On March 13, the President declared a public health emergency under the authority vested in him by the Constitution and the laws of the United States of America, including the National Emergencies Act and consistent with section 1135 of the Social Security Act (SSA).

Under that proclamation, the Secretary of HHS has exercised the authority under section 1135 of the SSA to temporarily waive or modify certain requirements of the Medicare, Medicaid, and State Children’s Health Insurance programs and of the Health Insurance Portability and Accountability Act Privacy Rule throughout the duration of the public health emergency declared in response to the COVID‑19 outbreak.

Blanket Waivers Issued

On March 13, Secretary Alex Azar issued a Waiver or Modification of Requirements Under Section 1135 of the Social Security Act that waives or modifies certain health care laws and regulations in connection with the COVID-19 pandemic. This “1135 Waiver” applies nationwide and took effect on March 15 at 6:00 p.m., but its applicability is retroactive to March 1, 2020. The declaration waived or modified the following requirements:

1. Conditions of participation in government insurance programs, certification requirements, program participation or similar requirements for individual health care providers or types of health care providers. This allows those non-participating providers to get paid for their work in the emergency.
2. Requirements that physicians or other health care professionals hold licenses in the State in which they provide services, if they have an equivalent license from another State.
3. Emergency Medical Treatment and Labor Act (EMTALA) imposes specific obligations on Medicare-participating hospitals that offer emergency services to provide a medical screening examination regardless of an individual’s ability to pay. Hospitals are then required to provide stabilizing treatment for patients with emergency medical conditions. This waiver allows triage decisions rather than strict compliance with the law only if actions under the waiver do not discriminate on the basis of a patient’s source of payment or ability to pay.
4. Sanctions relating to limitations on physician referral. The Stark Act is designed to prevent kickbacks to physicians for the referral of lab tests. The law is thought in many medical circles to be so strictly drawn as to impede care coordination.  This waiver does not permit kickbacks, but eliminates for the period of the emergency sanctions designed to prevent them.
5. Limitations on payments for health care items and services furnished to individuals enrolled in a Medicare Advantage plan by health care professionals or facilities not included in the plan’s network.

The Secretary also waived sanctions and penalties arising from noncompliance with the following provisions of the HIPAA privacy regulations:

1. the requirements to obtain a patient’s agreement to speak with family members or friends or to honor a patient’s request to opt out of the facility directory;
2. the requirement to distribute a notice of privacy practices; and
3. the patient’s right to request privacy restrictions or confidential communications.

The waiver requires hospitals to have hospital disaster protocols in operation during the time the waiver is in effect.

He additionally modified government rules to ensure that sufficient health care items and services are available to meet the needs of individuals enrolled in the Medicare, Medicaid and CHIP programs without normal regulations that can delay such availability in an emergency.  Under the modifications vendors and providers can get paid absent any determination of fraud or abuse.

The waivers described above are not effective with respect to any action taken that discriminates among individuals on the basis of their source of payment or their ability to pay.

Additional Waivers of Federal Rules Available to States

Secretary Azar has encouraged states and territories to assess their needs and request additional available flexibilities.  This waiver process is used frequently. This is the 15th time since September 2018.  Virginia was last granted waivers on September 12, 2018 as a result of Hurricane Florence.

The request of Virginia for additional waivers was granted yesterday, March 23. I offer a summary below:

1. Authority to delay state fair hearing requests and appeal timelines. Virginia requested and was granted flexibility to temporarily delay scheduling of Medicaid fair hearings and issuing fair hearings decisions during the emergency period.
2. Authority to temporarily suspend prior authorization and medical necessity requirements in the Medicaid program. Prior authorization and medical necessity processes in Medicaid fee-for-service delivery systems are established, defined and administered at state/territory discretion. The Secretary responded the Virginia’s query that whatever of such restrictions that the state has imposed it may waive.