CARES Act: Health Care Issues



Increased funding for COVID-19. The legislation includes $100 billion in funding to healthcare providers for unreimbursed COVID-19 expenditures. In addition, Medicare payments to hospitals treating COVID-19 patients will be increased by 20%, and the Medicare sequester, which reduces payments to Medicare providers by 2%, will be lifted from May 1 through December 31, 2020. Scheduled reductions in Medicaid disproportionate share hospital payments will be delayed through November 30, 2020. Hospitals also may request a six-month advanced payment from Medicare with a repayment term of at least a year.

HIPAA Changes. Substances abuse disorder records may be treated similarly to other patient records under HIPAA provided patients give a one-time initial written consent.

All Provider Types

Funding Allocation. Title VIII of the Act provides for $100 billion in funding to reimburse, through grants or other mechanisms, eligible healthcare providers for healthcare-related expenses or lost revenue that are attributable to COVID-19. The term “eligible healthcare providers” means public entities, Medicare and Medicaid providers, and other for- and nonprofit providers that provide diagnosis, testing, or care for individuals with possible or actual cases of COVID-19. The funds are intended for building or construction of temporary structures, leasing of properties, medical supplies and equipment including testing supplies and personal protective equipment, increased workforce trainings, emergency operation centers, retrofitting facilities, and surge capacity. The Department of Health and Human Services is to review applications for funds and make payments on a rolling basis.

Medicare Funding. Section 3709 will temporarily lift the Medicare sequester, which reduces payments to providers by 2%, from May 1 through December 31, 2020, increasing Medicare reimbursement for hospital, physician, nursing home, home health, and other care.

HIPAA. Section 3221 aligns the rules under 42 CFR Part 2 regarding the confidentiality substance abuse disorder records with HIPAA’s general approach to sharing protected health information, based on a patient’s prior written consent. Providers may use and disclose such records consistent with the patient’s one-time, initial prior written consent, including for treatment, payment, and healthcare operations purposes.


Medicare Add-On. For the duration of the COVID-19 emergency period, Section 3710 will increase the Medicare payments that would otherwise be made to a hospital for treating a patient admitted with COVID-19 by 20%.

Expansion of Medicare Advance Payments. Section 3719 will expand, for the duration of the COVID-19 emergency period, the existing Medicare accelerated payment program. Qualifying hospitals may request up to a six-month advanced lump sum payment or periodic series of payments. This advanced payment would be based on net reimbursement represented by unbilled discharges or unpaid bills. Hospitals can request up to 100% of the prior period payments, with Critical Access Hospitals able to receive up to 125%. Finally, a qualifying hospital will not have claims offset for repayment for up to 120 days and will have at least 12 months to complete repayment.

Delay of Disproportionate Share Hospital Reductions. Section 3813 will delay scheduled reductions in Medicaid disproportionate share hospital payments through November 30, 2020.

Appropriations and Grants. Section 3211 appropriated an additional $1.32 billion for fiscal year 2020 for funding to community health centers for prevention, diagnosis, and treatment of COVID-19.

Section 3212 reauthorizes Health Resources and Services Administration (HRSA) grant programs that promote the use of telehealth technologies for healthcare delivery, education, and health information services.

Section 3213 reauthorizes HRSA grant programs focusing on quality improvement, increasing healthcare access, coordination of care, and integration of services in rural communities.

FQHC and RHC Telehealth. Section 3704 allows, during the COVID-19 emergency period, Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) to serve as a distant site for telehealth consultations. 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 and will exclude the costs associated with these services from both the FQHC prospective payment system and the RHC all-inclusive rate calculation.

Increased Access to Post-Acute Care. Section 3711, during the COVID-19 emergency period, waives Medicare admission requirements on long-term care hospitals in an effort to provide acute care hospitals with more capacity by transferring patients out of their facilities and into long-term care hospitals sooner. This section waives the rule that a Medicare beneficiary be able to receive at least 15 hours of therapy a week as well as the requirement that a long-term care hospital have a discharge percentage rate that is at least 50%.

Physicians and Practitioners

Liability Protection for Volunteer Providers. Section 3215 provides that volunteer practitioners are shielded from liability for negligent acts and omissions in providing volunteer healthcare services during the COVID-19 public health emergency within the scope of the providers’ license. (This does not protect against errors or omissions arising from willful or criminal misconduct, gross negligence, or reckless misconduct.)

Telehealth. Section 3703 eliminates the requirement in earlier legislation 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. (The Centers for Medicare & Medicaid Services has already issued guidance that looks to be broader than this in terms of Medicare beneficiary access to telehealth services from physicians and other practitioners.)

Section 3705 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.

Medical Device Manufacturers

Shortage Notifications. Section 3121 of the act requires that, during a public health emergency, a manufacturer of a medical device that is critical to public health during such emergency must notify the FDA of a discontinuance in or the interruption of the manufacture of the device at least six months prior to the discontinuance or interruption or, if that is not practicable, as soon as possible. Based on such notifications, the FDA may then decide that there is, or is likely to be, a shortage of a device, and may prioritize and expedite the review of new device submissions and notifications, or facility inspections, that could help mitigate the shortage.

Home-Delivered Meal Providers

Waivers. Section 3222 waives, during the COVID-19 public health emergency, the nutrition requirements for home-delivered meals programs under the Older Americans Act to help ensure accessibility to meals.

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