COVID-19-Related Policy Developments Continue at the Federal Level

As the country continues to deal with the COVID-19 pandemic, Federal agencies continue to provide guidance to states and providers as they respond to the pandemic. As in our March, April and May articles, this post aggregates the latest updates from the federal pandemic response, including those relative to Medicare, Medicaid and Children’s Health Insurance Program (CHIP) guidance; state Section 1115 and Section 1135 Waivers; private insurance guidance; and efforts relative to health disparities. With information and policy evolving regularly, we encourage readers to stay on top of the latest updates on these topics and others, including clinical guidance, at

In this month’s most significant update, Secretary Azar of the Department of Health and Human Services (HHS) renewed the declaration of the federal public health emergency, effective July 25th. As a result, the temporary flexibility that HHS has granted—both statewide and within state-specific Section 1135 Waivers—will remain in effect for the time-being.

Medicaid, Medicare and CHIP Policy Guidance

Guidance regarding testing of Nursing Home Residents and Patients

Nursing homes continue to be a hot spot for COVID-19, and were recently the subject of new guidance from the Center for Disease Control and Prevention (CDC). These guidelines recommend COVID-19 testing for the following groups:

  • Nursing home residents and patients with COVID-19 symptoms
  • Nursing home residents and patients who previously tested positive for COVID-19
  • Asymptomatic residents and patients in certain circumstances—such as after being exposed to an outbreak.

In alignment with this guidance, the Centers for Medicare and Medicaid Services (CMS) is requiring Medicare Advantage plans to cover COVID-19 laboratory tests for nursing home residents and patients. Original Medicare will also provide such coverage. CMS also reiterated that Medicare plans must cover COVID-19 tests without applying cost sharing.

Updates to the Medicaid, CHIP and Medicare COVID-19 FAQs

Additionally, CMS continues to update its FAQ document addressing Medicaid and CHIP-related COVID-19 issues. We first shared this document with readers in March; its most recent update took place at the end of June, bringing it to nearly 100 pages in length. Topics addressed include:

  • Eligibility – including presumptive eligibility and continued coverage under the Families First Coronavirus Response Act, as well as the enrollment process
  • COVID-19 Testing Group coverage
  • Basic Health Programs
  • Coverage for American Indians and Alaska Natives
  • Premiums and cost sharing
  • Fair hearings
  • Benefits – including COVID-19 testing, telehealth, and non-emergency medical transport
  • Financing
  • Managed Care
  • Information Technology
  • Quality Reporting
  • Workforce
  • Section 1115 Waivers
  • State Plan Amendments (SPAs) and waiver deliverables timeline

Questions not addressed by the FAQ can be sent to CMS’s dedicated COVID-19 email address:

CMS also released a lengthy FAQ for Medicare providers this month. Its contents primarily focus on fee-for-service billing questions, but also provide further detail on:

  • Permissible telehealth services and flexibilities
  • Support available to Medicare Shared Savings Program Accountable Care Organizations (ACOs)

In addition, CMS released a separate FAQ regarding the Medicare enrollment relief it provided to increase Medicare provider capacity during the pandemic.

Flexibility related to Innovative Payment Models

Finally, CMS announced new flexibilities and adjustments to innovative payment models in June. These changes were designed in response to challenges caused by the pandemic. They relate to financial methodologies, quality reporting, and model timelines, and impact a wide range of Center for Medicare and Medicaid Innovation (CMMI) models—including bundled payment models, value-based purchasing models, and Accountable Care Organization models (among others). In making its announcement, CMS underscored that—in addition to the broader system benefits of innovative payment models—such models can provide a consistent and predictable revenue stream for providers in times of sudden utilization changes.

Medicaid Waivers

In addition to its blanket waivers and flexibilities provided in response to the public health emergency, CMS also continues to review state requests for Medicaid Section 1115 and 1135 Waivers specific to the COVID-19 pandemic.[1]

Section 1115 Waivers

To date, five states—Hawaii, New Hampshire, North Carolina, Rhode Island, and Washington—have been granted Section 1115 Waivers specific to the COVID-19 pandemic.[2] These waivers include the following flexibilities (applicable state waivers denoted in parentheses):

  • Authority to make retainer payments to providers of personal care services and/or habilitation services that include a personal care component (Hawaii, New Hampshire, North Carolina, Rhode Island, Washington)
  • Authority to expedite eligibility for long-term services and supports (LTSS) via the self-attestations of income and assets and of level of care, and to delay verification / assessment for one year (North Carolina, Washington);
  • Authority to reimburse for LTSS services that are not in the plan of care or are delivered in allowable alternative settings (North Carolina, Washington);
  • Authority to pay higher rates for home- and community-based care providers (Washington);
  • Authority to modify eligibility criteria for LTSS (North Carolina, Washington);
  • Authority to triage access to non-emergency medical transportation and LTSS based on highest need (Rhode Island);
  • Authority to allow individuals to have visitors for all home- and community-based services (Hawaii); and
  • Authority to reduce or delay functional assessments used to determine level of care and person-centered care plans (Hawaii, North Carolina, Washington).

Most of the states made additional requests that were either denied, considered under alternative waiver authority, or remain under consideration. We have summarized some of these additional requests below.

Both Washington and North Carolina requested authority to create a new eligibility group for individuals with incomes up to 200 percent of the Federal Poverty Level (FPL). Washington’s waiver request—which would have been used to provide additional coverage subsidies to that population using Medicaid funds—was denied. North Carolina planned to provide coverage of COVID-19 treatment only for that population; however, CMS did not address that request in its approval.

Washington and North Carolina also requested permission to use Medicaid funding toward creating a COVID-19 fund to support providers. Washington sought to provide funding relative to telemedicine investments; bed reconfiguration; off-site screening; quarantine and post-acute care; procurement of needed supplies; provider stabilization (in light of shifting utilization); ancillary workforce support; uncompensated testing and treatment; development of statewide testing coordination and reporting; and COVID-19-related housing and nutritional support. This request remains under consideration, with CMS looking to determine whether existing Federal resources provide support for the same needs. North Carolina requested to use Medicaid funds for similar purposes—specifically, to fund eligible expenses not reimbursed through federal funding or other sources. CMS did not address that request in its approval.

Other state requests currently under CMS review include:

  • A request to extended retainer payments for home- and community-based service providers and non-emergency medical transport (Washington);
  • A request to make directed payments through the state’s behavioral health managed care plans (North Carolina); and
  • A request to waive provisions related to liens, adjustments and recoveries of medical assistance, transfers or assets and treatments of certain trusts as income also remains under consideration (New Hampshire).

Finally, two of the five states made additional requests that they subsequently rescinded:

  • A request to expedite and simplify the eligibility enrollment process, as well as housing and nutrition support (North Carolina)
  • A request to modify eligibility criteria for LTSS and allow self-attestation or alternative verification of income or assets to qualify for LTSS coverage (Hawaii)

Section 1135 Waivers

CMS recently granted a number of new Section 1135 waivers[3], resulting in several additions to the updates we provided in March, April and May. Each of these approvals was enacted in addition to waivers already in effect in those states, providing new flexibilities for which states identified a need over the course of the pandemic. In March, we shared an overview of the requests commonly included in states’ early waiver applications. Below, we compiled a list of common flexibilities sought by many states in their most recent requests (applicable states denoted in parentheses):

  • Authority to modify deadlines, including those relative to:
    • Face-to-face encounters for home health services (Alaska, Arizona, New Hampshire, New York, Pennsylvania, Missouri, South Carolina, Utah, Washington);
    • Initial and annual level of care determinations for 1915(c) HCBS waivers and 1915(k) CFC waivers (Colorado, Connecticut, Montana, New Jersey);
    • Initial evaluations and redeterminations of eligibility, as well as initial assessments of need, under 1915(i) waivers (Colorado, Connecticut, Montana, New Jersey); and
    • Annual monitoring visits for targeted care management (Massachusetts, Missouri, Montana);
  • Authority to modify various timelines relative to the state’s Medicaid managed care program (New York, Texas)
  • Authority to waive written consent required for Home and Community-Based Services (HCBS) programs and Community First Choice (CFC) programs (Connecticut, Mississippi, Montana, New Jersey, Pennsylvania, Utah, West Virginia, Wisconsin, Wyoming)
  • Authority to allow delivery of HCBS and CFC program services in alternative settings (Montana, Pennsylvania, South Carolina, Tennessee, Utah, West Virginia, Wisconsin); and
  • Authority to reimburse for personal care services, including:
    • those provided by a family member (Montana, New Jersey, New Mexico, Pennsylvania);
    • 1915(k) attendant services and supports rendered by the individual’s caregiver (Alaska); and
    • HCBS program services delivered by the entity that provides case management services or is responsible for the development of the person-centered service plan (Montana, Utah).

Private Insurance Policy Guidance and Informational Updates

Updated Guidance regarding Coverage of Testing

In June, CMS provided updated guidance regarding the implementation of the Families First Coronavirus Response (Families First) Act and the Coronavirus Aid, Relief and Economic Security (CARES) Act. The new guidance focuses in large part on clarifying the requirement that group and individual commercial health insurance plans cover COVID-19 testing. Specifically, it addresses:

  • which plans are impacted (including self-insured group plans);
  • which tests insurers must cover (including at-home tests);
  • scenarios under which tests must be covered;
  • coverage of facilities fees related to testing;
  • payments when there is no negotiated rate; and
  • balance billing.

As the economy “re-opens” in many locations and the number of scenarios under which individuals are advised to get COVID-19 testing expands, CMS’s guidance clarifies that insurers are not required to cover testing sought or recommended for surveillance purposes or required by an employer. Instead, the coverage requirement is limited to diagnostic testing determined to be medically necessary by the individual’s healthcare provider (e.g., testing of symptomatic individuals or asymptomatic individuals with known or suspected exposure to COVID-19). As a result, the guidance leaves uncertainty about who will pay for back-to-work testing, which may be required by employers, as well as the screening tests being encouraged by some local leaders.

On the subject of balance billing, CMS clarified that individuals may not be balanced billed for the cost of a test itself, but—subject to state law—may face charges for ancillary items and services.

Additional topics addressed by the guidance include grandfathered plan status, mental health parity, wellness programs, and delayed individual coverage Health Reimbursement Arrangements notices. The guidance also provides temporary relief aimed at allowing large employers to provide telehealth-only service access to employees and dependents not eligible for coverage under the employer’s comprehensive group health insurance plan and addresses.

MLR Guidance

CMS also issued guidance last month providing flexibility in regards to upcoming Medical Loss Ratio (MLR) requirements. In it, CMS stipulates that, subject to state law, insurers may pay up to all of their estimated 2019 MLR rebates in the form of a premium credit prior to September 30th and in advance to filing their annual reporting forms. Insurers that do so may adjust their annual MLR notices accordingly. In addition, to align with the updated Risk Adjustment timeline for the 2019 benefit year, CMS is giving insurers until August 17th (delayed from July 31st) to submit their 2019 MLR Annual Reporting Form.

FFM and SBM-FP Marketplace Updates

In addition to the guidance outlined above, the Center for Consumer Information and Insurance Oversight (CCIIO) within CMS provided an informational update on enrollment through Federally-facilitated Marketplaces (FFMs) and State-based Marketplaces on the Federal Platform (SBM-FPs) via Special Enrollment Periods (SEPs) during the COVID-19 pandemic. The report explores enrollment via the loss of coverage SEP, including employer-sponsored insurance (ESI), starting from the end of the Open Enrollment Period through May. Not surprisingly, the number of individuals that enrolled in Exchange coverage via this SEP was higher this year than for any prior year.[4] That enrollment figure was 46 percent higher this year than last year. The report also found that enrollment in FFMs and SBM-FPs via all SEPs was 27 percent higher than 2019. The month with the highest enrollment via the loss of coverage SEP this year was April.

However, the reported increase in enrollment via the loss of coverage SEP is not proportional to the huge numbers of job losses since the start of the pandemic. As a possible explanation for this discrepancy, CCIIO points out that some job losses may be temporary with coverage being continued for those workers and that some out-of-work individuals may have chosen other coverage options, such as COBRA or coverage through their spouse, following a job loss. Still others may be Medicaid-eligible. Other possible reasons these figures do not align—though these are not mentioned in the CCIIO report—are a lack of widespread knowledge about the existing SEP, or the fact that the SEP is only available to individuals who had ESI prior to losing their job.

Related to the report, the city of Chicago filed a lawsuit against the Department of Health and Human Services (HHS) in June. In its suit, the city charges that the pandemic constitutes a situation under which the Affordable Care Act requires an “exceptional circumstances” SEP. Chicago claims that the failure to provide this type of SEP is causing the city’s public health and emergency response infrastructure to be strained—as Illinois (and other states with an FFM or SBM-FP) cannot adopt a state-based SEP. A coalition of thirteen states and the District of Columbia has since submitted an amicus brief in support of Chicago’s claims. The House of Representatives has requested to submit one as well.

Funding for Health Care Providers

The HHS Office of the Assistance Secretary for Preparedness and Response (ASPR) provided $250 million to the CARES Act Provider Relief Fund last month. This additional funding will be used for workforce training, expanding telemedicine, procuring supplies and equipment, and coordination.

The HHS Health Resources and Services Administration (HRSA) also announced its provision of funding, targeted at COVID-19 relief efforts, to healthcare providers in the following allocations:

HHS also announced that dentists are permitted to apply for funding through the Provider Relief Fund. The application deadline for these providers was July 24th.

Response to Health Disparities

In response to data showing that COVID-19 has a disparate impact on certain racial and ethnic groups, HHS issued a fact sheet highlighting initiatives to strengthen its data collection and reporting in order to better understand the effect of the pandemic on those communities. The HHS Office of Minority Health also announced funding and other efforts to increase outreach and communication related to COVID-19 aimed at minority communities.


[1] 47 states and the District of Columbia have also received approval of one or more Appendix K under 1915(c) Waiver authority.

[2] Connecticut also applied for a COVID-specific Section 1115 Waiver but later withdrew it.

[3] Alaska (6/3/2020, 6/15/2020), Arizona (6/1/2020, 7/9/2020), Colorado, Connecticut, Delaware, Massachusetts, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New York (6/15/2020, 6/22/2020), New Mexico, Pennsylvania (6/9/2020, 7/29/2020), Oklahoma, South Carolina (6/15/2020, 7/7/2020), Tennessee, Texas, Utah, West Virginia, Washington, Wisconsin, Wyoming.

[4] The report examined enrollment data in 2017 through 2020.

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