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Maximize Value April 02, 2020

What the New Medicare Waivers Mean for Providers

Partner, Nixon Peabody
Partner, Health & Life Sciences, Oliver Wyman
Partner and Chief Medical Officer, Health & Life Sciences, Oliver Wyman
Global Head, Provider, Health & Life Sciences, Oliver Wyman
Key Takeaway
What Provider Executives Should Do Now: 1) Reach out to independent physicians about using blanket waivers to provide economic support 2) Accelerate elective surgery return by utilizing virtual visits for surgical specialties. #OWHealth

Editor’s Note: The following article is part of an ongoing series offering our strategic advice and expertise on what healthcare industry stakeholders should do immediately in response to the rapidly evolving novel coronavirus (COVID-19) pandemic.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus bill, was signed into law on March 27, 2020. While largely focused on economic stimulus, the CARES Act is certainly the most far-reaching step the government has taken to date to address the COVID-19 pandemic.

Following the signing of the CARES Act, on March 30, The Centers for Medicare & Medicaid Services (CMS) announced several measures aimed at supporting providers through the COVID-19 crisis.

Specifically, CMS waived many regulations to allow providers to cope more effectively with the massive number of COVID-19 patients, and to provide care to patients with chronic diseases at home. Most states have followed suit by relaxing regulations regarding licensure for medical professionals, the need for supervision of advanced practitioners by physicians, and capacity constraints for hospitals. Congress, too, has provided funds to support hospitals and providers through advanced payments. 

Looking Ahead Amidst Health Reform Shake Up

Yet COVID-19 threatens to place demands on the healthcare system in a way that's never been seen before. And so, the critical question to hospital leaders is this: How can these changes help hospitals, health systems, and independent providers deliver better service to their community, and at the same time ensure the viability of the broader healthcare ecosystem?

The COVID-19 epidemic has resulted in the closure of many hospital outpatient departments and private physicians’ offices. This is causing shortfalls in the revenue streams for physicians in private practice, particularly specialists and those with ownership interests in Ambulatory surgery centers (ASCs). The recently issued Medicare 1135 waivers, along with other recently enacted regulations, offer many opportunities for hospitals and health systems to work with idled independent providers:

  1. The Stark waiver provides hospitals the ability to provide or reimburse for meals, lodging, and childcare to support medical staff providing care during the emergency. 
  2. The Stark waiver makes it easier and faster to enroll physicians in Medicare so they can bill for services provided. This includes waivers of application fees, criminal background checks, and onsite inspections.
  3. Other 1135 waivers allow hospitals to contract with ASCs, as well as inpatient rehab units and college dormitories, to provide inpatient services beyond the hospitals’ license. This also provides a way to offer physician-owned ASCs an income stream.
  4. New regulations expand Medicare and Medicaid payments to over 80 different telehealth services, provided the clinician delivering the telehealth service is otherwise permitted to deliver them. It also permits evaluation by telephone if the patient cannot access the Internet.
  5. CMS is now allowing virtual “check-in” services for both new and established patients. This will permit payment not only for the evaluation of coronavirus patients but also for patients without a primary care physician who need care for a range of conditions.
  6. The CMS program for advanced payment of Medicare billings offers physicians and hospitals the chance to request up to three months of Medicare billings to be paid in advance. These payments will be recouped from future Medicare claims starting 120 days after the check is issued and continuing throughout the next 210 days.

An Opportunity for Collaborative Spirit

Based on these changes, there are some very tangible ways that hospitals and health systems might come together to address key issues of the COVID-19 crisis:

One is expanding capacity via ambulatory sites of care: If ASC capacity is needed for the expansion of services (including surgery and lengths of stay up to 96 hours), the hospital can contract for such capacity and purchase it at a market rate. It is important to note that this can also be extended to the nursing staff of the ASC in the form of employment or contracts to provide care.

Another is extending telehealth capacity: The scope of activities Medicare will pay for has been dramatically expanded for hospitals with telehealth capabilities. Newly-enrolled physicians and/or contracted providers can be used to provide these services following quality and compliance training.

Taken together, these waivers and new regulations offer hospitals an opportunity to work with physicians and advanced practitioners during this crisis – at least temporarily – and CMS provides a number of examples of exactly how to do so. Services provided under the waivers should be clearly documented internally to have been “provided because of the COVID emergency.” Compliance with Medical Staff Bylaws and the granting of “Emergency Privileges” for the hospital must be assured.

While healthcare providers still face a crisis of unprecedented proportions, they now have multiple mechanisms that can help as they add to the staff in the emergency department and wards of the hospital, or expand patient care areas into local ASCs, hotels, and temporary hospital facilities. At the same time, the hospital can connect providers to new revenue opportunities, not only through employment but also by assisting them in obtaining Medicare registration so they can bill Medicare for services rendered to eligible patients. This flexibility should help to bridge the gap to when business finally returns to “normal.”

This information is intended to be of a general nature and is furnished for your knowledge and understanding as an informational resource only. Nothing contained in this article should be construed as legal advice.

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