On April 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) issued its Second Interim Final Rule in response to the COVID-19 pandemic, which includes additional regulatory waivers and rule changes. After reviewing comments to its First Interim Final Rule published on April 6, 2020, CMS is now attempting to provide even more flexibility to health care providers in furnishing services to combat the spread of COVID-19. To do so, CMS focuses on increasing access to hospital services and laboratory and diagnostic testing in settings that will allow individuals to receive the care without jeopardizing their health or the health of those providing the services.

The Second Interim Final Rule is effective as of today, May 8, 2020. Because it is an interim final rule, comments may be received within 60 days (by July 7, 2020).

Below is a brief summary of the significant provisions of the Second Interim Final Rule, which are only intended to last for the duration of the COVID-19 Public Health Emergency (“PHE”), which was determined to exist nationwide as of January 27, 2020 by the Secretary of Health and Human Services (the “Secretary”). A PHE declaration lasts until the Secretary declares that the PHE no longer exists or upon the expiration of the 90-day period beginning on the date the Secretary declared a PHE exists, whichever occurs first. The Secretary may extend the PHE declaration for subsequent 90-day periods and may terminate the declaration whenever he determines that the PHE has ceased to exist. The Secretary extended the COVID-19 PHE effective as of April 26, 2020. At this time, it is unclear how CMS intends to unwind these regulatory waivers when the PHE terminates or expires so providers should consider the steps needed to phase out the flexibility offered by the Second Interim Final Rule (e.g., including contractual provisions that limit commitments to the period of the PHE).

  1. Relocating Provider-Based Departments: Many hospitals have been forced to repurpose existing clinical and non-clinical space for use as temporary expansion sites to furnish inpatient and outpatient care. As a result, CMS will allow (a) payment for outpatient hospital services that are delivered in temporary expansion locations, including parking lot tents, converted hotels, or patients’ homes (when they are temporarily designated as part of a hospital); and (b) certain provider-based hospital outpatient departments (“PBDs”) that relocate off-campus (including to a patient’s home, where appropriate) to obtain a temporary exception and continue to be paid at Outpatient Prospective Payment System (“OPPS”) rates, rather than at Physician Fee Schedule (“PFS”)-equivalent rates (40% of the standard OPPS hospital outpatient department rates). While CMS instituted a streamlined process for hospitals to receive approval of temporarily relocated PBDs, it noted, however, that approval of temporary relocation alone is insufficient justification to permanently relocate a PBD after the PHE ends. Therefore, following the COVID-19 PHE, if temporarily relocated off-campus PBDs do not return to their original location or otherwise receive approval of permanent relocation through the standard non-PHE relocation process, they will be considered to be non-excepted PBDs and paid the PFS-equivalent rate.
  2. Expansion of Scope of Practice: Nurse practitioners (“NPs”), clinical nurse specialists (“CNSs”) and physician assistants (“PAs”) may now certify the need for and order home health services paid for by the Medicare and Medicaid programs. Moreover, to increase COVID-19-related diagnostic testing capacity, and to increase the flexibility and availability of health care professionals to provide needed care, CMS will allow NPs, CNSs and PAs to order, furnish directly, and supervise the performance of diagnostic tests (which is typically a physician service), subject to applicable state law.
  3. Modified Requirements for Ordering and Furnishing Diagnostic Laboratory Tests: Diagnostic laboratory tests for COVID-19 and influenza will be covered even if they are not ordered by a health care provider. This will provide Medicare coverage for such tests for patients who visit community testing sites without an order. In addition, CMS is creating a new hospital outpatient code to support COVID-19 testing.
  4. Medicaid Laboratory Services: Under the Medicaid Program, CMS seeks to cover COVID-19 tests, including coverage for tests administered in non-office settings and coverage for laboratory processing of FDA-authorized self-collected COVID-19 tests. Under current regulations, Medicaid coverage is only available for laboratory tests that are (a) ordered and provided by or under the direction of a physician (or other licensed practitioner if authorized under state law); (b) provided in an office or similar facility; and (c) furnished by a laboratory that meets certain requirements.
  5. Serology Testing: CMS will cover COVID-19 serology tests that identify whether a patient has antibodies indicating recent or prior infection.
  6. Medical Education: Under current regulations, a hospital cannot receive payment for the time spent by residents training at another hospital. However, CMS will now allow teaching hospitals to send residents, on an emergency basis, without regard to Graduate Medical Education financial considerations, to hospitals where they are most needed. Moreover, teaching physicians can be paid for audio/visual supervision of residents at standard rates for such services.
  7. Audio-Only Telephone Services: In CMS’s First Interim Final Rule, CMS established separate payment for audio-only telephone evaluation and management services (CPT codes 99441, 99442 and 99443). Now, CMS is broadening that list to include many behavioral health and patient education services. CMS is also increasing payments for these telephone visits to match payments for similar office and outpatient visits. The payments are retroactive to March 1, 2020.
  8. Medical Necessity Requirements: CMS reiterated that it is not waiving medical necessity requirements. Therefore, items and services must continue to be furnished and ordered on a reasonable and necessary basis and the medical record must be sufficient to support payment for the services billed (i.e., the services were actually provided, were provided at the level billed, and were medically necessary).
  9. Waiver of the “3-Day Rule”: CMS is waiving the requirement for a 3-day prior hospitalization for coverage of a SNF stay. In addition, for certain beneficiaries who recently exhausted their SNF benefits, CMS authorizes renewed SNF coverage without first having to start a new benefit period.
  10. COVID-19 Reporting Requirements: CMS is now requiring long-term care facilities (including skilled nursing facilities) to electronically report information on: suspected and confirmed COVID-19 infections among residents and staff, including residents previously treated for COVID-19; total deaths and COVID-19 deaths among residents and staff; personal protective equipment and hand hygiene supplies in the facility; ventilator capacity and supplies available in the facility; resident beds and census; access to COVID-19 testing while the resident is in the facility; staffing shortages; and other information specified by the Secretary. CMS will make this information public and will use this information to monitor trends in infection rates.
  11. Quality Data Reporting Requirements: CMS is delaying reporting requirements applicable to providers, including (a) measure testing and collection requirements for the Merit-based Incentive Payment System; and (b) data submission requirements applicable to inpatient rehabilitation facilities, long-term care facilities, and home health agencies under various quality reporting programs.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. We will continue to evaluate the CARES Act, related regulations and any subsequent legislation to provide our clients guidance in real time. Please visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Photo of Richard Zall Richard Zall

Rick Zall is chair of Proskauer’s Health Care Group. Rick advises health care companies, investors and lenders in their most challenging transactions, including mergers and acquisitions, joint ventures, financings and complex commercial agreements.

With a deep understanding of the health care industry, Rick…

Rick Zall is chair of Proskauer’s Health Care Group. Rick advises health care companies, investors and lenders in their most challenging transactions, including mergers and acquisitions, joint ventures, financings and complex commercial agreements.

With a deep understanding of the health care industry, Rick is known for providing practical, creative solutions in order to successfully close deals for his clients.

Rick advises clients on state and federal health care regulatory compliance matters, including the corporate practice of medicine, digital health, telemedicine, HIPAA, fraud and abuse, Medicare and Medicaid payment reimbursement, MACRA, and value based payment.

Rick advises clients on state and federal health care regulatory compliance matters, including the corporate practice of medicine, digital health, telemedicine, HIPAA, fraud and abuse, Medicare and Medicaid payment reimbursement, and value based payment.  As businesses globally are impacted by the Coronavirus (COVID-19) pandemic, Rick is a member of the firm’s Coronavirus Response Team helping clients respond and solve issues across myriad fronts, from understanding CARES Act programs to compliance with applicable state and local guidelines for employers to follow.

Rick is a respected thought leader in the health care industry and frequently presents at key industry events. He has served in government, is a co-founder of the New York Primary Care Development Corporation (PCDC), and earlier in his career was CEO of a private equity-backed medical management company. Rick has also directed two industry studies for the Robert Wood Johnson Foundation and serves as principal outside counsel and board secretary to the Clinton Health Access Initiative (CHAI).

Photo of Edward S. Kornreich Edward S. Kornreich

Past long-standing chair of Proskauer’s Health Care Department, Ed Kornreich is a recognized authority on the legal, regulatory and business issues related to health care services.

Ed works primarily on health care transactions, regulatory compliance, health care payment and governance issues for varied…

Past long-standing chair of Proskauer’s Health Care Department, Ed Kornreich is a recognized authority on the legal, regulatory and business issues related to health care services.

Ed works primarily on health care transactions, regulatory compliance, health care payment and governance issues for varied providers (both for-profit and not-for-profit), vendors, GPOs, distributors and entrepreneurs. His approach combines sensitivity to meeting regulatory business goals with a comprehensive and realistic assessment of the health care environment, and he is particularly experienced in dealing with the complex issues related to integrated health care systems.

After working for the Legal Aid Society, Ed entered private practice, where he helped represent a major public hospital corporation in a series of reimbursement disputes with the state and federal governments, and counseled New York area hospitals and nursing homes on reimbursement and operational issues. Thereafter, Ed served as General Counsel of St. Luke’s-Roosevelt Hospital Center, one of the largest teaching hospitals in New York. After leaving St. Luke’s-Roosevelt Hospital Center, Ed joined Proskauer as a Partner in 1990.

Ed frequently writes and lectures on Medicare and Medicaid reimbursement, health care integration, not-for-profit law and corporate governance issues, and the application of federal and state anti-kickback and “Stark” laws to health care transactions.

Photo of David Manko David Manko

David has more than two decades of experience representing clients in the health care industry. His experience includes complex business transactions such as mergers, acquisitions, joint ventures and other contractual relationships. He is particularly adept at structuring health care transactions that implicate regulatory…

David has more than two decades of experience representing clients in the health care industry. His experience includes complex business transactions such as mergers, acquisitions, joint ventures and other contractual relationships. He is particularly adept at structuring health care transactions that implicate regulatory issues such as the Corporate Practice of Medicine, the Stark Law and the Anti-Kickback Statute. Recently, David has been highly involved in representing sponsors and targets in private equity transactions involving health care technology companies, physician practices, MSOs and other service providers. He also has experience unwinding transactions that have not achieved the objectives of one or both parties.

In 2017, Chambers USA recognized David as a regulatory and transactional healthcare lawyer “who earns impressive reviews from peers and clients alike.” Says one commentator, “he is a master negotiator and is second to none in his responsiveness,” adding that “he turns around whatever needs to be done promptly and efficiently.”

Photo of Ryan Blaney Ryan Blaney

Ryan Blaney represents health care, life science, and technology clients in a range of regulatory, enforcement, internal investigative and transactional matters, with particular expertise in privacy law, life sciences and digital health. He also has expertise in regulatory compliance, counseling clients on a…

Ryan Blaney represents health care, life science, and technology clients in a range of regulatory, enforcement, internal investigative and transactional matters, with particular expertise in privacy law, life sciences and digital health. He also has expertise in regulatory compliance, counseling clients on a range of matters, including health care fraud and abuse, third party reimbursement, data breach issues, data privacy and security, and FDA regulatory matters. He has substantial experience in pharmaceutical lifecycle management and competition issues, including the Hatch- Waxman Act and Biosimilars Price Competition and Innovations Act.

Ryan serves information technology companies, public and private health care companies, hospitals and physician organizations, manufacturers, medical device companies, and health plans. He guides venture capital groups, private equity funds, investment banks, and other investors on health care regulatory issues in connection with financing, mergers and acquisitions, and restructuring.

Ryan’s work is greatly informed by his experience as a teacher. Prior to attending law school, Ryan earned a master’s degree in education and taught at an under-resourced Catholic middle school. He is known for his ability to communicate clearly and to coordinate large teams working on complex matters. Outside of his health law practice, Ryan has been repeatedly recognized for his public service and pro bono work. He has successfully handled numerous education-related cases, helped establish three nonprofit organizations and defended qualified recipients of disability benefits.

Photo of Elizabeth (Betsy) Rosen Siegel Elizabeth (Betsy) Rosen Siegel

Elizabeth (Betsy) Rosen Siegel is an associate in the Health Care Department. Her practice focuses on representing health care clients, including hospitals, hospital systems, academic medical centers, physician organizations and other care entities. Betsy provides legal advice on a wide range of regulatory…

Elizabeth (Betsy) Rosen Siegel is an associate in the Health Care Department. Her practice focuses on representing health care clients, including hospitals, hospital systems, academic medical centers, physician organizations and other care entities. Betsy provides legal advice on a wide range of regulatory, transactional and corporate matters, including Medicare/Medicaid reimbursement, fraud and abuse compliance, managed care contracting, HIPAA and data privacy, and general corporate and business planning.

In addition, Betsy maintains an active pro bono practice, which includes representing individuals in various immigration matters and representing not-for-profit organizations on a variety of matters. Betsy also serves on the Her Justice Junior Advisory Board.

Betsy earned her J.D. from The George Washington University Law School in 2013, while also earning her graduate certificate in health policy from The George Washington University School of Public Health and Health Services. While in law school, she worked as a health insurance counselor at the George Washington University Law Health Rights Law Clinic and was a member of the Public Contract Law Journal. Betsy also served as president of the Student Health Law Association and received the American Bar Association/Bureau of National Affairs Award given to the members of the graduating Juris Doctor class who have demonstrated excellence in the study of health law. Betsy received her B.S. in health care management and policy magna cum laude from Georgetown University in 2010.