Medical providers hope emergency funds, waivers stay in place

Health industry lobbyists push to keep protections added during pandemic

A sign marks the entrance to the emergency room at the George Washington University Hospital in Washington on March 23, 2020.  (Bill Clark/CQ Roll Call file photo)
A sign marks the entrance to the emergency room at the George Washington University Hospital in Washington on March 23, 2020. (Bill Clark/CQ Roll Call file photo)
Posted April 7, 2020 at 6:05am

Health care lobbyists are hoping that a suite of emergency authorizations granted under the coronavirus pandemic will mark a turning point for a long list of industry requests, including those that boost their bottom lines.

The outbreak has so far spurred around $2.4 trillion in spending via three massive legislative packages, but many lawmakers say health care providers in particular will need more. The sudden halt to elective procedures is threatening hospitals’ financial operations as they scramble to beef up staffing and facilities for COVID-19 patients.

Medical providers are eagerly waiting to hear how a $100 billion emergency fund created under the third package will be allocated, with details expected from the Department of Health and Human Services this week. Hospitals are also receiving a 20 percent bump to payments related to COVID-19 and additional funding through a 6 percent enhanced federal Medicaid match sent to states. They’ll receive another $10 billion through a suspension of the 2 percent Medicare budget sequester from May 1 through the end of the year.

Loading the player...

“There's a lot of toothpaste that has come out of the tube,” a House Democratic aide said, adding that Congress will have to decide which funds to replenish and which emergency authorities to extend.

The three laws are a rare example of massive spending that even budget hawks say is justified. But as Congress plans a fourth wave of economic aid, lawmakers now have the advantage of something they didn’t have before: time.

“I think they’re going to ask for what they’re always asking for, which is everything,” said Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, of hospitals and other providers. “The more important question is, what do they need?”

Congress rushed the money out the door in a desperate bid to stave off an economic collapse, and House Speaker Nancy Pelosi said Sunday that she hopes to bring another aid bill to the floor by the end of the month. But implementation of the first three bills gives lawmakers time to assess more narrow, efficient ways of administering aid in the next legislative package, Goldwein said. 

Sequester relief, for example, touches Medicare players across the spectrum, regardless of whether the service is related to the coronavirus. “That’s not targeted at all,” he said. 

But once the government giveth, it’s much harder to taketh away. Spencer Perlman, managing partner of investment analyst Veda Partners, said it’s highly possible that Congress will keep suspending the sequester in a piecemeal way.

“I would not be surprised if the pause is serially extended for short periods of time,” he told CQ Roll Call.

The move would come with a high price tag, however, and spending will come with higher scrutiny after the emergency fades. Congressional aides say the willingness to funnel more money into the pandemic will depend not only on the availability of offsets but also what the aftermath looks like. Will hospitals need help reversing converted ICU spaces, for example? Will emergency preparedness and public health investments receive new priority?

Telehealth takes off

What is clear is that the health care landscape will look different from before the outbreak began. Many of the temporary waivers allowing patients to receive care at home received new urgency as government leaders worked to tamp down COVID-19 infection rates, but they have been an opportunity for reducing health care costs for years.

One area ripe for expansion is telehealth, which has surged during the outbreak. The coronavirus aid packages accelerated Medicare’s reimbursements for remote care during the public health emergency. 

[Telehealth visits surge along with coronavirus cases]

“I do believe that telehealth’s moment is here,” Perlman said. “Telehealth has been on the precipice for the better part of 20 years.”

The bills unlocked restrictions on the Centers for Medicare and Medicaid Services’ ability to pay doctors for seeing patients virtually, including by waiving a requirement that the patients already have an established relationship with the physician and another restricting patients’ ability to use virtual services from their home.

But simply throwing open the virtual gates is expensive. Studies show that telehealth increases utilization of medical services more than it shifts existing demand, and Congressional Budget Office pricing estimates reflect the expected cost increase. Congress has instead opted for more incremental, targeted expansions over the years, such as a provision in the 2018 opioid law allowing telehealth reimbursements for treating patients with substance use disorder.

If the temporary telehealth authorities stick, Congress will likely have to reevaluate whether Medicare owes physicians the same rate for virtual and in-person visits, aides say. Downstream effects on patient cost-sharing, such as copayments, will also have to be examined since introducing separate charge items could result in bills to patients they didn’t receive before.

Nursing home rule set aside

Provider groups are also hoping to score permanent relief from other restrictions. One emergency CMS waiver temporarily sets aside a rule requiring nursing facility patients to have spent at least three days in an acute care hospital before being eligible for Medicare coverage.

Clifton Porter, senior vice president of government relations for the American Health Care Association, the nursing home and long-term care lobbying group, said eliminating the rule would allow hospitals to move less critical patients out of the way more quickly.

“That prevents a hospital bed from being taken unnecessarily,” Porter told CQ Roll Call.

Some view the restriction as an example of Medicare’s many outdated regulations. The rule is a leftover from the days when nursing facilities were paid higher rates, with the aim of preventing them from becoming hospital “dumping grounds,” Perlman said.

“That incentive no longer exists and hasn’t for 20-plus years,” he said. 

Another area is expanding the scope of practice for nurses and physician assistants, which requires both state and federal agreement. One provision in the third coronavirus-related stimulus law, for example, permanently eliminates federal restrictions for physician assistants and nurse practitioners to order home health care for patients. The seemingly small ask was a legislative priority of the American Academy of Physician Assistants.

“When the profession first started 50 years ago, you didn’t really know how they were going to do out in the environment,” Jonathan Sobel, a past president of the AAPA and senior administrative director of advanced clinical providers at Northwell Health. “Now it’s a proven experiment.”

Sobel hopes the data will justify giving clinicians expanded authorities on a permanent basis.

“Hopefully, that will be a silver lining in this terrible crisis that everybody is going through,” he said.