1135 Waivers: HHS Authority to Alleviate Healthcare Regulatory Requirements During the COVID-19 National Emergency

March 19, 2020
Firm Publication

As the number of confirmed cases of the novel coronavirus disease (COVID-19) continues to tick upward in the United States, administrative agencies are taking steps on a national scale to ensure that adequate healthcare items and services are available to individuals exposed to or otherwise affected by the outbreak. Emergency declarations made by U.S. Department of Health and Human Services Secretary Alex Azar on January 31, 2020, and President Donald Trump on March 13, 2020, triggered an expansion of authority under which Secretary Azar is permitted to waive or modify certain requirements applicable to healthcare items and services furnished under the Medicare and Medicaid programs and the Children’s Health Insurance Program (CHIP). Such waivers and modifications, issued pursuant to Section 1135 of the Social Security Act (42 U.S.C § 1320b-5), are intended to temporarily ease regulatory constraints and reimbursement-related issues that might otherwise preclude or delay healthcare providers, practitioners and suppliers from effectively combating COVID-19 and caring for affected individuals.

Section 1135 Waivers

Section 1135 waivers aim to offer assurance that items or services furnished in good faith by providers, practitioners or suppliers responding to COVID-19 will be eligible for reimbursement under federal program rules despite certain deficiencies in compliance with program requirements. Section 1135 waivers can also be used to exempts such providers, practitioners and suppliers from sanctions for non-compliance with pre-emergency regulations, absent any determination of fraud or abuse. With some exception, Section 1135 waivers are generally effective until the corresponding emergency period is terminated or 60 days from the date the waiver is issued, provided that no extensions are approved.  Waivers can be requested to suspend or modify requirements during the period of emergency pertaining to:

  • Conditions of provider participation, certification, and program pre-approval.
  • Requirements that practitioners hold state licensure in each state where healthcare items or services are rendered, so long as such practitioners hold equivalent licensure in at least one state and are not affirmatively excluded in any state involved in the emergency area.
  • Emergency Medical Treatment and Labor Act (EMTALA) requirements governing (1) the transfer of individuals who have not been stabilized, if such transfer is necessitated by the circumstances; and (2) the direction or relocation of individuals to receive medical screening in an alternative location pursuant to an appropriate state emergency-preparedness plan or pandemic-preparedness plan, as applicable. These waivers are effective only if actions taken under such waivers do not discriminate as to the source of payment for care rendered to a beneficiary or the beneficiary’s ability to pay for such care. Except within the context of a pandemic infectious disease, EMTALA-specific waivers are generally limited to 72 hours, beginning with the implementation of a hospital disaster protocol.
  • Stark law self-referral sanctions.
  • Deadlines and timelines for the performance of required activities (these requirements may only be modified—not waived).
  • Medicare Advantage rules limiting a beneficiary’s use of out-of-network providers and practitioners.
  • HIPAA- and privacy-related sanctions specific to obtaining patient consent to speak with family or friends, honoring patient requests to opt-out of facility directories, distribution of notices of privacy practices, and the rights of patients to request confidential communications. These waivers are effective only if actions under such waivers do not discriminate as to the source of payment for a beneficiary’s care or a beneficiary’s ability to pay. These privacy-related waivers are generally limited to 72 hours, beginning with the implementation of a hospital disaster protocol.
  • Requirements applicable to originating site rules for telehealth services provided by a “qualified provider.” A qualified provider is defined to mean a physician or practitioner who provided covered items or services to the beneficiary within the previous three years or who is in the same practice (based on tax identification number) as the physician or practitioner who provided such services to the beneficiary within the previous three years. The approved originating site remains eligible for the originating-site facility fee.
  • Restrictions on delivery of telehealth services through the use of the telephone provided any such telephone is capable of two-way, real-time, audio and video interactive communication.

Blanket Waivers Related to COVID-19

On March 13, 2020, the Centers for Medicare and Medicaid Services (CMS) began approving blanket waivers and modifications of certain requirements having broad applicability. To date, blanket waivers related to COVID-19 have been issued concerning the following:

  • Pre-admission, benefit exhaustion, and data-reporting requirements in skilled nursing facilities.
  • Limitations on the number of beds and duration of stay within critical access hospitals.
  • Restrictions on the housing of acute care patients in excluded distinct part units.
  • Supporting-documentation requirements related to the provision of durable medical equipment.
  • Restrictions related to care for excluded inpatient psychiatric unit patients in the acute care unit of a hospital.
  • Restrictions related to care for excluded inpatient rehabilitation unit patients in the acute care unit of a hospital.
  • Restrictions related to supporting care for patients in long-term care acute hospitals.
  • Home health agency timing of Outcome and Assessment Information Set reporting and auto-cancellation date of Requests for Anticipated Payment during emergencies.
  • Provider-location licensure requirements.
  • Requirements related to provider enrollment application processing, applicant screening, re-validation, and operation of providers beyond states of enrollment.
  • Medicare appeals under fee-for-service, Medicare Advantage and Part D programs.
  • Telehealth originating-site rules requiring patients to travel to a provider or similar facility for delivery of care and requiring that patients have an established relationship with the provider delivering the care (CMS will not enforce against or audit providers with respect to the “established patient” requirement), and rules restricting what types of technology can be used to facilitate a telehealth encounter and prohibiting patient cost-sharing reductions and waivers.

The March 13, 2020 blanket waivers are available here and the March 17, 2020 telehealth blanket waiver is available here.

CMS has indicated individual providers and suppliers do not need to apply to use blanket Section 1135 waivers. Historical CMS Section 1135 guidance and practice suggest providers and suppliers desiring to operate under the blanket waivers should notify their CMS Regional Office; Medicare Administrative Contractor; and, as applicable, state survey agency via letter or email of their intent to do so. However, this notice requirement is not highlighted in CMS materials issued over the last week. Providing notice is still likely best practice, but it is also possible that CMS may simply accept utilization of the required claims modifiers as sufficient notice. Conversely, anyone looking for relief beyond the blanket waivers (within the scope of the Section 1135 waiver authority) must submit a request to the CMS Regional Office or, if applicable, state survey agency, and should provide justification for the waiver(s) being requested. Some states have already submitted requests for specific waivers, and Florida became the first state to receive approval, on March 16, 2020.

As implementation of COVID-19-related Section 1135 waivers develops, we anticipate CMS and other agencies will provide further guidance for the most appropriate way to obtain a specific waiver and document operation under a blanket waiver. In the meantime, for further guidance on Section 1135 waivers or for assistance in submitting a Section 1135 waiver request, please contact the authors of this alert or any attorney in our Healthcare Practice Group.