Wednesday, June 17, 2020

Outlook for Three-Day Hospital Waiver

In the past months, CMS has issued an array of national, “blanket” waivers to reduce administrative burden, improve access to care, and expedite provider payment in both the Medicare and Medicaid programs. Important Medicare SNF waivers include waive of the 3-Day Stay Rule and Spell of Illness while an important Medicaid waiver is the elimination recertification requirements. These waivers, included under a national, blanket waiver called a Section 1135 waiver, remain in place while a Public Health Emergency (PHE) is in force.

Under the President’s March declaration of a PHE under Section 319 of the Public Health Service Act, the Secretary of the Department of Health and Human Services (HHS) has the authority to declare a PHE exists in 90-day increments. Effective April 26, HHS Secretary Azar announced a PHE 90 day extension through July 26. In late July, Secretary Azar has two options:
  1. Allow the PHE and the Section 1135 to expire; or 
  2. Allow the PHE to expire but extend the Section 1135.

The Secretary has the authority to extend the Section 1135 in 60-day increments. As an example, Secretary Azar could allow the PHE to expire on July 26 but extend the Section 1135 waiver until September 26 and then, again, until November 26.

Outlook for Other Important Resources

In addition to the waivers, important resources are increased federal Medicaid funding for states with a 6.2 percentage point increase and the CARES Act Provider Relief Fund. Increased federal Medicaid funding to the states is tied to the PHE. The increased federal dollars are available for qualifying expenditures that were incurred on or after January 1, 2020 and through the end of the quarter in which the public health emergency including any extensions, ends. Following the example above, if the Secretary allows the PHE to end on July 26, the increased federal matching percentage would end on September 30. 

The CARES Act Provider Relief Fund is not tied to any date in the CARES Act statutory language nor the PHE. The Fund is entirely at the discretion of the Secretary.

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