April 23, 2020

You Received Financial Relief. Should You Keep it?

For the last couple weeks, I have discussed issues related to the distribution of the $100 billion pot of funding that was included in the stimulus bill (the CARES Act). As I mentioned last week, you or your group recently received a payment equal to approximately 6.2 percent of your 2019 Medicare fee-for-service (FFS) spending. You have 30 days from when you received the funding to complete an online attestation form and agree to certain terms and conditions. For most of you, that means you'll need to attest by May 9. If you do not agree to these terms and conditions, you must return the payment to the Department of Health and Human Services (HHS).

Now why do I keep bringing this up? For three major reasons: 1) many of you have read the terms and conditions and have asked whether you should keep the money; 2) the terms and conditions have slightly changed (without warning or notice); and 3) as described at the end of the blog, the next tranche of funding is coming and you will still need to adhere to these same terms and conditions. To start out, I want to answer the question that’s likely on your mind: No, I can’t tell you one way or the other whether you should keep the money.

That is an individual decision that you or your group have to make on your own. However, I can lay out what we know and areas ACEP is trying to get clarification around to help you decide what to do. Please note that we’re still awaiting answers to the questions included in the letter we sent to HHS on April 14, which should shed more light on these terms and conditions and how to appropriately comply with them.

While there are numerous terms and conditions you must agree to in order to accept the funds (and I encourage you to review all of them in detail), there are a few you should pay close attention to.

1. The Recipient certifies that it will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.

The COVID-19 pandemic has had a far-reaching impact on you and your groups. Emergency department (ED) volumes are down as much as 50 percent in some areas of the country that have not yet been hit by the virus, and some groups are struggling to meet payroll. Further, there are other routine infrastructure and administrative expenses that you and your groups may be unable to afford.

In all, you and your groups may need to use multiple funding streams to maintain existing operations and readiness. We assume that this condition does not preclude you from applying for funding from other federal programs, including the Small Business Administrations’ Payroll Protection Program, or receiving an advance payment through Medicare’s expanded advance payment program. However, we have asked HHS to confirm that you can receive funding from multiple sources.

If you do receive funding from multiple federal sources, please know that you are expected to track how each source of funding is being specifically allocated.

2. The Recipient shall submit reports as the Secretary determines are needed to ensure compliance with conditions that are imposed on this Payment, and such reports shall be in such form, with such content, as specified by the Secretary in future program instructions directed to all Recipients.

You are only allowed to use the funds “to prevent, prepare for, and respond to coronavirus” and to cover “health care related expenses or lost revenues that are attributable to coronavirus.” If you keep the funds, you will be required to submit reports to HHS about how you are using it. Specifically, HHS states that “all recipients will be required to submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to coronavirus. There will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.” That is why it is extremely important to track how you spend the money.

3. None of the funds appropriated in this title shall be used to pay the salary of an individual, through a grant or other extramural mechanism, at a rate in excess of Executive Level II. 

According to the Office of Personnel Management (OPM), the annual salary of an Executive Level II in 2020 is $197,300. Most of emergency physicians who have extensive training and are board-certified in emergency medicine have annual incomes above this arbitrary threshold.

We have asked HHS to clarify this condition and see what flexibility you or your group have to use the funding to pay a portion of an emergency physician’s salary. We hope HHS will say this is acceptable assuming the total payment made to an individual’s salary does not exceed this threshold.

4. The Secretary has concluded that the COVID-19 public health emergency has caused many healthcare providers to have capacity constraints. As a result, patients that would ordinarily be able to choose to receive all care from in-network healthcare providers may no longer be able to receive such care in-network. Accordingly, for all care for a presumptive or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.

I have saved the most complicated for last. This is the condition that many of you are most concerned about. According to this condition, if you keep the money, you are effectively not allowed to balance bill patients with presumptive or actual cases of COVID-19.

What does this mean? First, when I mentioned above that HHS changed the terms and conditions, this is the condition I was referring to. Originally, the condition applied to all “possible” or actual cases of COVID-19. The use of the term “possible” had created a lot of confusion, noted in some media reports over the weekend. In HHS’ fact sheet explaining the payments, HHS states that the Department views every patient as a “possible” case of COVID-19. Therefore, some thought that HHS was in effect banning balance billing for every patient. To clarify this misconception, HHS, without warning or notice, changed the condition on Monday by replacing the word “possible” with “presumptive.” This change indicates that HHS intends to have the balancing billing ban targeted at patients who have, or likely have COVID-19—not to all patients.

Therefore, you may want to consider whether you or your group are practicing in an “hot spot” and treating numerous patients who may have COVID-19. Obviously, you will also have to consider how your current balancing billing practices would be impacted by such a prohibition.

What is the Insurer required to pay for out-of-network (OON) care? Knowing how much you will be reimbursed for this care will also help you make your decision. However, unfortunately, this is an area where we have more questions than answers.

As you may know, under the Families First Coronavirus Response Act, insurers are required to cover without cost sharing COVID-19 tests and testing-related services. On April 11, HHS, in conjunction with the departments of Labor and Treasury, put out guidance/FAQs on coverage and cost sharing requirements. According to the guidance, health plans are supposed to cover the cost of an ED visit that results in an order for or administration of a COVID-19 test. For these visits, the guidance states that if the heath plan does not have a negotiated rate with a provider, the plan or insurer must reimburse the provider in an amount that equals the cash price for such service as listed by the provider, or they may negotiate a rate with the provider for less than such cash price.

There is a lot of ambiguity here, so we have asked HHS to clarify the following points:

  • How the negotiation process for OON payments would occur, and what guardrails are included in the process.
  • Whether the entire ED visit must be covered. As stated above, cost-sharing includes ED visits that lead to an order for a COVID-19 test. However, for an ED visit, there is simply no way to parse out from billing which services are provided to a patient before or after a test was ordered or administered. Therefore, we have asked HHS to confirm that insurers must cover all services provided in such an ED visit in order to comply with the guidance.
  • Whether the insurer’s payment to providers for these visits include the patient’s cost-sharing amount that has now been waived. In other words, if a patient’s cost-sharing obligation is typically 20 percent of the cost of the service, we want to make sure that insurers must cover that amount in their payment to providers.

We are still waiting for responses to these questions. The answers may help you make a decision about whether to accept the relief funds—especially if we can get HHS to confirm that the whole initial ED visit must be covered without cost-sharing and that the insurer must pay a reasonable amount that includes the waived cost-sharing amount.

Late Breaking: Next Tranche of Funding is On its Way

The last thing I’ll note is that yesterday, HHS announced a plan for distributing more of the initial $100 billion (Congress may approve an additional $75 billion as soon as today). Please read here for details.

Of note:

  • HHS is allocating another $20 billion to all health care providers. The total you receive—both from the initial $30 billion and the new $20 billion—will be based on your 2018 total revenue. To confirm your total 2018 total revenue, you or your group will need to submit your revenue information to HHS. If you want this additional funding, you will have to adhere to the same terms and conditions that you did for the first $30 billion. 
  • $10 billion will be allocated for a targeted distribution to hospitals in areas that have been particularly impacted by the COVID-19 outbreak.
  • You can also soon start submitting certain claims for uninsured patients for dates of service on or after February 4. You will receive Medicare rates for these services. Additional details on uninsured patients are found here.

More to come as we learn more specific details about this new funding allocation.

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs!

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