Updates on the Federal Response to COVID-19

As the COVID-19 pandemic continues to impact the country, Congress and the Centers for Medicare and Medicaid Services (CMS) continue to advance funding opportunities, temporary policy changes and waivers to support states, providers, and the public in their efforts to address the pandemic and its broad impact. This article aggregates the latest updates on the federal response to COVID-19, focusing on funding that has been made available for providers, flexibility given to both states and providers, and requirements for health coverage.

The context for the federal response to the pandemic changes nearly daily. Additionally, while this article does not outline the clinical guidance specific to safely treating COVID-19 and addressing other health care needs, that information is available at https://www.hhs.gov/about/news/coronavirus/index.html.

Federal Funding

Congress passed its fourth legislative package, the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA), last week. In addition to providing more funding for the small business community, the legislation includes an additional $100 billion to support healthcare needs. It provides an additional $75 billion to the Provider Relief Fund launched under the CARES Act to reimburse hospitals and other healthcare providers for healthcare-related expenses and lost revenues attributable to COVID-19. For more information about the Provider Relief Fund, visit the CMS Provider Relief Fund webpage.

Finally, the PPPHCEA allocates an additional $25 billion to support a nationwide testing program. Specifically, this funding supports research and development of COVID-19 testing, manufacturing and purchasing of tests, administration of testing, and expanded capacity for testing. Eligible entities include:

  • States and localities;
  • Federal agencies – including the Centers for Disease Control and Prevention (CDC), the National Institutes for Health (NIH), the Food and Drug Administration (FDA) and the Biomedical Advanced Research and Development Authority (BARDA); and
  • Private health care providers – including Federally-Qualified Health Centers (FQHCs) and Rural Health Centers (RHCs)

Guidance related to Providers and Public Programs

CMS continues to introduce temporary regulatory changes aimed at expanding provider capacity for COVID-19 response. Over the last month, CMS released two comprehensive guidance documents outlining additional regulatory changes aimed at addressing the COVID-19-related patient surge. In this section, we provide an overview of the major provisions of this guidance and other targeted guidance. In addition to our overview below, we urge you to review the following links to access comprehensive information about the many recent changes:


In last month’s edition, we outlined new flexibilities released by CMS to enable greater use of telehealth. CMS continues to refine that guidance, and addressed telehealth again in more recent guidance. The newer guidance expands the services eligible for telehealth, such as emergency department visits, nursing facility initial and discharge visits, home health care, inpatient rehabilitation, and hospice. These services may be provided via telehealth even for patients who only have access to audio phones. In separate guidance, CMS also outlines telehealth flexibility for:

Additionally, CMS released a video FAQ on Medicare telehealth services, as well as a toolkit relative to telehealth in state programs.


CMS also continues to address workforce needs. New developments in this area over the last month include:

  • Allowing doctors to provide remote care in rural hospitals, including across state lines;
  • Increasing the role of nurse practitioners in skilled nursing facilities; and
  • Providing flexibility around home health assessments.

New CMS guidance also allows additional flexibility around physician privileges, staffing, and self-referral restrictions. For states seeking to address workforce challenges, CMS released a workforce toolkit with information about workforce waivers, funding flexibilities, liability protections, and workforce trainings.

Understanding the intense burden on individual health care providers, CMS now allows hospitals to provide benefits for their medical staff such as meals, laundry service, and child care while the staff provide patient care. In the same guidance, CMS:

  • makes it easier for providers to enroll as Medicare providers, including private practice physicians;
  • expands the role of medical residents; and
  • allows providers to use verbal orders to a greater extent, and generally reduces paperwork requirements.

Other Provider Flexibility

In blanket waivers aimed at ensuring providers can manage the expected surge in patients while providing care in a manner that prevents the spread of COVID-19, CMS gives hospitals flexibility to provide care off-site, operate more efficiently, and limit certain patient rights as needed—as well as flexibility relative to other requirements and rules. Likewise, these waivers also provide flexibility to:

  • RHCs and FQHCs relative to staffing requirements and sites of care;
  • long-term care facilities and skilled nursing facilities relative to admission requirements, reporting, physical environment rules, and provider rules;
  • home health agencies relative to payment rules, reporting, assessments, and on-site visits;
  • allow dialysis facilities to establish facilities specifically for COVID-19 patients in order to avoid putting other patients at risk;
  • allow hospitals and laboratories to collect specimens, test, and screen for COVID-19 in alternative settings; and
  • hospice care providers; end-stage renal disease facilities; intermediate care facilities for individuals with intellectual disabilities; and durable medical equipment, prosthetic and orthotic providers and suppliers.

In other comprehensive guidance outlining recent regulatory changes, CMS stipulates that, during the pandemic, hospitals can provide services in alternative locations—such as ambulatory surgery centers, inpatient rehabilitation hospitals, hotels, and dormitories—as needed and still receive Medicare reimbursement. This can include transferring less acute patients to alternative sites to free up inpatient capacity.

Separately, CMS also released guidance allowing licensed, independent freestanding emergency rooms and ambulatory surgical centers to temporarily provide care to Medicare and Medicaid patients. These providers cannot typically be certified as Medicare or Medicaid providers, but under the new guidance, can be temporarily certified as hospitals in order to increase capacity. The guidance also allows non-emergency transport of patients to a wider range of locations—such as FQHCs, physical offices, urgent care facilities, ambulatory surgery centers, and alternative locations for dialysis services.

Other Medicare Coverage

Recent CMS guidance makes several allowances related specifically to Medicare payments. The agency announced increased payments for testing and COVID-related hospital care and rehabilitation, in addition to expanding access to respiratory devices and equipment under Medicare.

One month after announcing the expansion of its Accelerated and Advance Payment Program for healthcare providers and suppliers that participate in Medicare, CMS stated its intention to reevaluate the amounts it will pay under the Accelerated Payment Program and suspended the Advance Payment Program payments to Part B suppliers. Prior to this update, $100 billion had been paid out of the program since the expansion was announced at the end of March. CMS now directs providers to seek funding from the Provider Relief Fund, which gives grants instead of loans.

CMS also updated its guidance for Medicare Advantage plans, Part D plans, and dual-eligible coverage. Among the topics addressed in the update are:

  • coverage of testing and future vaccines, and prohibitions on cost sharing, by Medicare Advantage Organizations;
  • opportunities for Medicare Advantage Organizations to expand benefits mid-year;
  • flexibilities related to Medicare Advantage Organization Models of Care and involuntary disenrollments;
  • flexibilities related to Part D delivery documentation, prior authorization requirements; and pharmacy audits;
  • limitations on Part D utilization management requirements; and
  • changes related to opioid safety policies.

Medicaid FAQ

This month, CMS released a FAQ document outlining in more detail Medicaid provisions in the Families First Coronavirus Response Act (FFCRA)—including those relative to coverage of testing; coverage expansion opportunities; and the increased federal funding available for Medicaid programs. The FAQ also addresses the related maintenance of effort (MOE) requirements that apply to eligibility standards, methodologies and procedures; premiums; and continuation of coverage. It specifically, outlines how to address beneficiary eligibility changes and recently-instituted premium changes. In addition, the document clarifies that in order to qualify for the FFCRA’s increased federal funding, states must cover and waive co-payments for testing, treatment, and eventual vaccines, and may not terminate coverage for failure to pay premiums.

Late-Breaking Update

As evidence of how often and quickly the regulatory environment is shifting at the federal level, new guidance came out just this afternoon to address recent legislative changes and provider requests. The broad guidance addresses many of the topics detailed above and is aimed at expanding the healthcare workforce, supporting expanded capacity, increasing access to telehealth, expanding access to testing outside of the hospital, and reducing paperwork. Given its comprehensiveness, this guidance warrants a close review by states—particularly notable are its updates on the following:

  • access to COVID-19 testing and antibody testing;
  • increasing hospital inpatient, long-term care, partial hospitalization and outpatient capacity;
  • allowing health care providers to focus on the highest level of services they are licensed for and delegate other tasks; and
  • expanding the types of clinical providers that can provide telehealth services and the services that can be provided via telehealth.

CMS is also making changes to the Medicare Shared Savings Program, adjusting the financial methodology for payment to ACOs to account for COVID-19 costs. Additionally, the agency is allowing states with Basic Health Programs to make temporary COVID-19-related adjustments.

Medicaid Waivers and other Resources for States

Over the last month, CMS approved a number of new Medicaid Waivers related to the pandemic. In last month’s edition, we outlined the Section 1135 Waiver flexibility now available to states by virtue of emergency declarations at the federal level. Since that time, Section 1135 waivers were granted to an additional 16 states and the District of Columbia,[1] for a total of 43 waivers granted since the start of the pandemic. In light of the urgent and evolving needs, CMS developed a toolkit for states seeking Section 1135 Waivers aimed at expediting the application and review process of these very time-sensitive requests.

States also continue to pursue amendments to Section 1915(c) Home and Community Based Services (HCBS) Waivers via Appendix K to modify, for example, eligibility or benefits. CMS’s website includes an updated list of states granted these amendments, as well as resources for states considering them. Additionally, over the last month and at present, states continue to pursue temporary Medicaid and Children’s Health Insurance Program state plan amendments.

Washington state is the first state to have been granted a Section 1115 Medicaid Waiver related to the pandemic, enabling the creation of a state-based COVID-19 disaster relief fund aimed at stabilizing and providing financial support to the state’s providers. This support includes ensuring providers have the health care and safe transportation necessary to continue doing their jobs. The waiver also allows Washington to develop a statewide testing and reporting system, as well as to support vulnerable populations.

Guidance related to Private Insurance and Balance Billing

CMS’s response to COVID-19 coverage issues related to private insurance also continues to evolve.

Among the most anticipated private insurance-related news this month was the decision that Federally-facilitated Marketplaces will not offer an additional open enrollment period as State-based Marketplaces are. Instead, the administration announced that it will reimburse hospitals directly for care of the uninsured based on Medicare rates.

In follow-up to guidance last month related to co-payments for COVID-19 testing, telehealth, and the FFCRA (which prohibits insurers from applying prior authorization or medical management requirements to COVID-19 testing), CMS released guidance this month encouraging individual and small group issuers to be flexible in applying utilization management and prior authorization. Importantly, that guidance is not explicit to COVID-19-related diagnostics or services, but aimed at reducing overall paperwork requirements on providers. CMS noted that any changes must be clinically-based and applied in a non-discriminatory manner.

The guidance also encourages issuers to modify practices related to network requirements, as workforce shortages resulting from COVID-19 and the response to it may make it difficult for enrollees to access in-network services. Specifically, CMS encourages issuers to work with out-of-network providers to ensure enrollees who cannot access in-network care are not balanced billed. The administration also noted that it will require hospitals receiving stimulus funding to certify that they will not charge patients more than they would have owed if services had been provided in-network. Additionally, the CARES Act prohibits balance billing by laboratories and other testing providers.

Finally, CMS released a FFCRA- and CARES Act-related FAQ this month specific to private insurance requirements, including cost-sharing limitations. Particularly of note, the FAQ:

  • Confirms that these requirements apply to self-insured and student health insurance plans, but not short-term limited duration insurance, excepted benefit plans, or retiree-only coverage; and
  • Addresses how to deal with out-of-network providers.

CMS is also delaying the risk adjustment data validation process.

Considerations for States

As states review this information, it is important to be mindful that the COVID-19 pandemic is a quickly evolving situation, and this article outlines the status of regulatory information as of the time of publication (April 30, 2020). We encourage state regulators and other readers to stay updated on federal-level guidance by regularly checking CMS’s updates.

Further, as states consider how they will implement the new support and flexibilities available to them during this challenging time, they should also keep in mind how they will:

  • address MOE requirements; and
  • revert the changes they make when the emergency declarations end and guidance flexibilities expire.

As state Medicaid rolls grow, states deal with COVID-19 care needs, and states face a tremendous economic downturn, the federal funding increase outlined in the FFCRA will be critical to supporting Medicaid programs. States must ensure that they do not make any programmatic changes that would impact eligibility for this increased funding. In particular, states should carefully review the detailed guidance from CMS about prior premium increases that are now prohibited and how to address beneficiaries losing eligibility under continuous coverage requirements.

Similarly, as states pursue flexibilities that are critical to their ability to address the needs of their residents, they must create a plan of action that includes the changes they will need to make when the emergency declarations – and temporary flexibilities – end. This will ensure states are prepared to make the changes necessary to stay in compliance with federal rules and requirements despite the end to flexibilities they may rely on now.


[1] Since our last edition, Section 1135 Waivers were granted to Alaska, Arkansas, Georgia, Maine, Michigan, Montana, Nebraska, Nevada, Ohio, South Carolina, Tennessee, Texas, Utah, Vermont, West Virginia, and Wisconsin as well as the District of Columbia, the Commonwealth of Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands

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