“Looking into My Crystal Ball”​ – The End is Near…for the 1135 Waivers To Expire

by | Apr 7, 2022 | Blog

By Angela Sorbelli, J.D., LL.M, MBA, CHC

The United States has been in a state of Public Health Emergency (PHE) due to the coronavirus pandemic since January 2020. Section 319 of the Public Health Services (PHS) Act grants the authority to declare and re-evaluate the need for the PHE to the Secretary of Health and Human Services, who reviews the emergency declaration every 90-days and determines whether an extension is warranted. Pursuant to the authorities granted to the HHS Secretary under section 1135 of the Social Security Act, a PHE declaration allows the HHS Secretary to take certain actions in response to the emergency, which include waiving or modifying certain Medicare, Medicaid, State Children’s Health Insurance Program (SCHIP) and Health Insurance Portability and Accountability Act (HIPAA) requirements. Beginning in March 2020, CMS implemented a lengthy list of so-called 1135 blanket waivers, which were automatic and retroactive to the beginning of the PHE, offering wide latitude and flexibility to our nation’s health care providers as they waged war against the virus.

To date, the PHE has been extended eight (8) times and is currently set to expire (unless extended a ninth time) on April 16, 2022. In January 2022 the Federal Government reiterated its earlier promise that it would give at least 60-days’ notice if the PHE would not be extended in an effort to help hospitals prepare for the expiration of the administrative flexibilities, since the 1135 waivers will terminate when the PHE expires. If the Government intended to end the PHE in April, the 60-day notification deadline would have been February 16, 2022. Since no notification has been sent, it is likely that the PHE will be extended another 90-days thru July 2022. In the meantime, there are a number of waivers, flexibilities and administrative leniencies which health care providers across the nation have become quite reliant upon, and the cessation of which is likely to result in chaos.

These waivers fall into three broad categories: 1) expansion of telehealth services; 2) expansion of traditional hospital capacity; and 3) reduction of administrative burdens.

Telehealth services, which prior to the pandemic were limited in use and applicability, have been expanded and telehealth flexibilities have been given a separate five-month (151-day) extension as part of the recently passed $1.5 trillion Congressional omnibus legislation. Although many have speculated telehealth is here to stay, the reality is that this may, at best, only be a reality for Medicare beneficiaries, as commercial payors have already begun rolling back this expanded coverage since the COVID-19 restrictions. Commercial plans are contractually-driven and unique to each plan and to each provider, therefore there will likely be a lack of consistency and therefore, confusion across the nation that will inevitably become a source of much audit focus and debate.

In tandem with the telehealth expansion, so too were the flexibilities of licensing and credentialing requirements of telehealth professionals, both of which were relaxed during the pandemic to expand the resources available for the telehealth services. This relaxation of licensing requirements was also applied at the state level to assist health care facilities to quickly respond to resourcing demands. However, as the states have slowly been rolling back their mitigation efforts, licensing requirements have also slowly been reinstituted and many previously qualified professionals must now reapply for state credentialing.

Some Conditions of Participation (COPs) that have been temporarily waived to lessen administrative burden, will also likely be reinstituted unless Congressional action independently extends the waiver or permanently removes the requirement. One COP that has been proposed for greater permanence is the 3-day qualifying stay required for a Medicare inpatient to be deemed eligible for skilled nursing (SNF) care. This waiver means that a Medicare beneficiary can receive Medicare Part A SNF coverage without at least one of the long-standing integral requirements. And so long as all other SNF requirements are met, this waiver also allows a beneficiary to qualify for an additional 100-day benefit period without completing a 60-day break in spell of illness.

Once the PHE ends, not only with the 3-day qualifying stay be reinstated, but the additional benefit days will hinge upon the spell of illness requirement. It is yet uncertain how a sudden reinstitution of this requirement might impact inpatients pending SNF care; however, it is certain to create quite a bit of paperwork, confusion and audit potential.

And another major administrative work-around put in place two years ago was the fast-track enrollment of millions of individuals to the Medicaid program. There is the concern about the impact of the PHE termination to millions of adults and children enrolled to a state Medicaid program during the pandemic. Prior to the pandemic, Medicaid agencies evaluated an individual beneficiary’s eligibility on a yearly basis, removing those who have moved to a different state or who simply earn too much to qualify for the joint federal/state program. But since the beginning of the PHE, the federal government flooded the state agencies with funding in exchange for a promise NOT to deny eligibility during the pandemic.

Although many individuals will remain eligible, it is highly likely many individuals will “fall out of coverage” as they struggle to prove their eligibility for the first time in two years. There is also a concern that the sudden resumption of administrative reviews will overwhelm the Medicaid agencies and result in eligibility denials rendered in error.

And these are just the tip of the iceberg that will be the long-term administrative impacts of the ending of the public health emergency. That said, as the world begins to resume a more normal course of business and the coronavirus evolves into an endemic that will likely stay with us for decades to come, it is time for our health care industry to begin preparing for life after COVID-19.

Have questions? Contact Angela Sorbelli, J.D., LL.M, MBA, CHC

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