Coronavirus Update for April 3, 2020

The following is the latest information from federal regulators and others as of 4:30 p.m. on Friday, April 3.

NASH Writes to Secretary Azar

NASH has written to Health and Human Services Secretary Alex Azar asking him to distribute, as soon as possible, the $100 billion designated in the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) for hospitals and health care providers.  See NASH’s letter to Secretary Azar here.

Department of Labor

The Labor Department has published a program letter with a summary of key unemployment insurance provisions of the CARES Act and guidance regarding temporary emergency state staffing flexibility.

Federal Communications Commission

The FCC has adopted a $200 million telehealth program to support provider responding to the COVID-19 crisis.  The money will help providers purchase telecommunications, broadband connectivity, and devices necessary for providing telehealth services.  See the FCC’s news release and its formal report and order.

Centers for Disease Control and Prevention

Food and Drug Administration

Centers for Medicare & Medicaid Services

Department of Health and Human Services

  • HHS’s Office of Civil Rights has announced that it will not impose penalties for violations of certain provisions of the HIPAA privacy rule against health care providers or their business associates for the good faith uses and disclosures of protected health information by business associates for public health and health oversight activities during the COVID-19 nationwide public health emergency.  See the Office of Civil Rights announcement of this temporary policy and a pre-publication version of the formal notice of this policy that will appear shortly in the Federal Register.
  • Along with the Department of Justice, HHS has announced that the two agencies have ordered the distribution of medical supplies that in their judgment were being hoarded.  The federal government paid fair market value for 192,000 N95 masks, nearly 600,000 pairs of medical grade gloves, and 130,000 other types of masks, surgical gowns, disinfectant towels, and other supplies and is sending these supplies to the New Jersey Department of Health, the New York state Department of Health and the New York City Department of Health and Mental Hygiene.

The White House

President Trump has invoked the Defense Production Act to compel companies to undertake the manufacture of N95 respirators and ventilators.

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NASH Asks Azar to Distribute CARES Act Money Now

“Distribute as soon as possible the $100 billion designated in the [CARES] Act to assist health care providers as they deal head-on with the biggest public health crisis our country has faced in more than a century,” NASH asked Health and Human Services Secretary Alex Azar in a letter to Azar on Friday.

In the letter, the National Alliance of Safety-Net Hospitals wrote of private safety-net hospitals tackling the COVID-19 crisis that

Hospitals and other providers need these resources – and need them in a very timely manner. Hospitals invested heavily in preparations for the challenge to come and are still paying for those and continuing investments at a time when their cash flow is at an historic low because they are no longer performing elective surgery, which provides a major portion of their revenue. Thus, hospitals need this money to pay our bills, to keep the lights on and the medical supplies coming in, and to pay our courageous caregivers.

See NASH’s letter to Secretary Azar here.

NASH Asks Feds for Resources for Hospitals

Private safety-net hospitals will need federal financial support to help in the fight against COVID-19.

That was the message the National Alliance of Safety-Net Hospitals sent in a letter to Centers for Medicare & Medicaid Services administrator Seema Verma.

The letter explained that

Hospitals need consistent, reliable, adequate cash flow to support the challenge ahead.  Our private safety-net hospitals, and others like us, are already incurring significant costs preparing for the influx of patients to come.  Most of these hospitals have stopped performing elective surgeries and have lost an important source of revenue.  Now, they are concerned about their ability to pay their bills until the anticipated surge of patients and also concerned about the potential for delays in payments once those patients arrive.  This is revenue they need to pay their bills:  to keep the lights on, the water running, the staff paid, and the patient rooms supplied and equipped.  Hospitals need this reliable, consistent flow of money – and they need it sooner rather than later.

See NASH’s letter here.

NASH Seeks Assistance With COVID-19 Needs

Provide special assistance to private safety-net hospitals to help them serve their communities during the COVID-19 national health emergency, NASH has asked in a letter to Senate majority leader Mitch McConnell and minority leader Charles Schumer.

In particular, NASH asked the Senate leaders to include three things in future COVID-19/stimulus legislation:

  1. Funding to ensure cash flow for hospitals that are investing heavily in anticipation of a major influx of challenging patients while foregoing revenue from elective procedures.
  2. The permanent elimination of Affordable Care Act-mandated cuts in Medicaid disproportionate share (Medicaid DSH) funding.
  3. Protection from any new, burdensome regulations in any legislation adopted to facilitate the fight against COVID-19.

Go here to read NASH’s letter to senators McConnell and Schumer.

 

NASH Opposes Proposed 340B Data Collection

The federal government should not require hospitals to submit new data on their acquisition costs for prescription drugs they dispense to low-income patients through the section 340B prescription drug discount program, NASH has told the Centers for Medicare & Medicaid Services.

In a formal comment letter in response to new data collection requirements proposed by CMS last month, the National Alliance of Safety-Net Hospitals wrote on behalf of private safety-net hospitals that

The 340B program was created by Congress to enable hospitals (and other providers) that serve low-income communities to maximize their resources when working to serve those communities. The program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients: provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents. This was the purpose of the 340B program when Congress created it in 1992 and Congress has not modified that purpose since that time. NASH believes that through this proposed data collection CMS is seeking to exert authority it does not have to demand of providers information to which the agency is not entitled.

In the letter, NASH also objected that the proposed data collection would be costly and burdensome for hospitals and is premature because the courts are still considering challenges to CMS’s authority to reduce 340B payments to providers; the latter is why CMS seeks this data.

Go here to see NASH’s formal comment letter to CMS.

MFAR Backlash Continues

Diverse health care and government interests are rallying around their opposition to the proposed Medicaid fiscal accountability rule.

The regulation, proposed by the Centers for Medicare & Medicaid Services in November would impose new limits on the ability of states to finance their share of their Medicaid spending, potentially jeopardizing provider payments and the ability of high-volume Medicaid providers to operate without suffering great losses.

In all, CMS received more than 4200 written comments in response to the proposed regulation, most of them expressing opposition.  Among those doing so were state governments, the National Governors Association, hospitals and hospital associations, nursing home operators, and health advocacy organizations.  Also among them was the National Alliance of Safety-Net Hospitals.  In summarizing its opposition, NASH wrote in a formal comment letter to CMS on behalf of private safety-net hospitals that

While NASH supports greater transparency in Medicaid, that support is outweighed by too many troubling aspects of the proposed regulation. In this letter, NASH is especially interested in commenting on five aspects of the proposed regulation: how it would deprive states of important, established policy-making prerogatives; its creation of major new administrative burdens for state governments and for hospitals; its inappropriate regulation of financing of the state share of Medicaid spending; its proposed introduction of new, unspecified standards that state Medicaid programs would be held accountable for meeting; and its violation of the Administrative Procedures Act.

See NASH’s entire letter here.

Learn more about the Medicaid fiscal accountability rule, what it seeks to do, and why so many oppose in the Stateline article “Medical Groups Slam Trump Medicaid Rule.”

Supreme Court Paves Way for Public Charge Regulation

The revised public charge regulation that will make it more difficult for some immigrants to come to the U.S. will be implemented after the Supreme Court lifted preliminary injunctions issued by lower courts that delayed the regulation’s implementation.

Under revisions of the public charge regulation introduced last year, individuals seeking entry into the U.S. and green cards who do not appear to be financially independent or have employment commitments can be denied entry if they will be dependent on means-tested public aid programs such as Medicaid or food stamps or even if they, or members of their family, appear likely to become dependent on such aid in the near future.

A number of judges throughout the country blocked the administration’s implementation of revisions of the public charge rule.  The Supreme Court’s action only lifts those injunction; it does not address the constitutionality of the regulation, leaving that matter to continue to be addressed by lower courts for now.

The challenge posed to health care providers by the updated public charge regulation is as much a matter of perception as reality:  individuals already legally in the U.S. who are not subject to the regulation have withdrawn from Medicaid out of fear of deportation while others who also are in the country legally and qualify for Medicaid are choosing not to apply for benefits for the same reason.  This, in turn, may leave some providers with more uncompensated care instead of Medicaid reimbursement for the care they provide to some of their patients.

The National Alliance of Safety-Net Hospitals has conveyed its opposition to the public charge regulation to both Congress and the administration.  In a message to Congress, NASH wrote that “The new public charge regulation threatens the health of families and communities and threatens the ability of private safety-net hospitals to serve those families and those communities.”  In response to the proposed changes in the regulation, NASH wrote in a formal comment letter on behalf of private safety-net hospitals that it

…believes the proposed regulation could have a chilling effect on the willingness of many legal citizens and legal non-citizens to seek out government health care programs for which they legally qualify. This could lead to millions of low-income legal citizens and legal non-citizens choosing not to seek the care to which they are entitled by law and ignoring serious illnesses and injuries until they become a crisis. When such individuals have no choice but to turn to hospital emergency departments in search of care – something hospital emergency departments are required by law to provide regardless of a patient’s ability to pay – this could overwhelm those facilities and would do so to the detriment of other patients while also producing a surge of uncompensated care, especially for private safety-net hospitals. That, in turn, could jeopardize the jobs of thousands who work in those hospitals and the economies of the communities in which those hospitals are located. It could also jeopardize access to care for residents of these same communities – including ordinary people who receive their health care coverage from private insurers and Medicare.

See NASH’s entire comment letter here.

Learn more about the Supreme Court’s decision and how it affects implementation of the public charge regulation in the New York Times article “Supreme Court Allows Trump’s Wealth Test for Green Cards.”

 

Fitch: Medicaid Block Grants, MFAR Threaten States, Providers

Medicaid block grants and the proposed Medicaid fiscal accountability regulation (MFAR) pose new financial threats to providers and states, according to Fitch Ratings, the financial rating company.

MFAR poses the greater threat, Fitch believes, noting in a new analysis that it could

…reduce total Medicaid spending nationally by $37 billion and $44 billion annually…and by $23 billion to $30 billion for hospitals alone.  States, and to some extent providers, would respond to MFAR’s implementation with measures to mitigate the negative fiscal implications.

Block grants, through what has been named the Healthy Adult Opportunity program, also pose a threat, with Fitch explaining that

Capping federal Medicaid contributions, even for a subset of beneficiaries, poses risks to state budgets and those entities reliant on state funding, including local governments and providers.  States would need to find revenue or cost savings, either in Medicaid or elsewhere, to offset reduced federal contributions.

Because private safety-net hospitals care for more Medicaid patients than the typical hospital, both proposed policy changes have a potentially greater impact on them.

Last month NASH conveyed its opposition to the proposed MFAR regulation in a formal comment letter to the Centers for Medicare & Medicaid Services in response to the regulation’s publication late last year.  While NASH has not commented publicly about the Healthy Adult Opportunity program, it has long been concerned about a block grant approach to Medicaid funding, writing in its 2019 advocacy agenda that

Block grants, whether based on individual states’ Medicaid enrollment or on their past Medicaid spending, could impose unreasonable limits on Medicaid spending that could potentially leave private safety-net hospitals unreimbursed for care they provide to legitimately eligible individuals. NASH will work to ensure that any new approach that involves Medicaid block grant continues to give states the ability to pay safety-net hospitals adequately for the essential services they provide to the low-income residents of the communities in which those hospitals are located.

Learn more about the potential impact of the proposed Medicaid fiscal accountability regulation and Medicaid block grants in the Fitch Ratings analysis “Fitch Rtgs: Medicaid Changes Will Affect States, NFP Healthcare Providers.”

Verma Responds to MFAR Critics

CMS administrator Seema Verma addresses criticism of her agency’s proposed Medicaid fiscal accountability regulation in a new commentary on the CMS blog.

Critics of the so-called MFAR regulation have argued that the Centers for Medicare & Medicaid Services’ proposed regulation, if adopted, will lead to a reduction of federal funding for state Medicaid programs, jeopardize access to care and the financial health of providers by leading to a reduction of supplemental payments to high-volume Medicaid providers, and possibly even force some states to raise taxes to compensate for the loss of federal funding.

In her commentary Verma rebuts these criticisms, maintaining that the proposed regulation seeks to ensure that states pay their fair share of their Medicaid partnership with the federal government, raise that share in a manner consistent with federal guidelines, and spend it in ways that fall within regulatory standards.  She also maintains that the regulation will foster greater transparency and accountability for the Medicaid program.

Verma notes that more than 4000 stakeholders submitted written comments in response to the proposed regulation.  NASH was among those commenters, writing that MFAR would give too much authority to federal regulators; create new administrative burdens for hospitals and state governments; and inappropriately limit state financing of their share of Medicaid spending.

Learn more from the Verma CMS blog commentary “Medicaid Fiscal Integrity: Protecting Taxpayers and Patients” and from NASH’s letter in response to the proposed regulation.

 

340B Déjà Vu: CMS Seeks to Collect Data From Hospitals

For the second time in four months, the federal government has announced its intention to collect data from hospitals and other providers on what they pay for the prescription drugs they purchase through the section 340B prescription drug discount program.

Last week the Centers for Medicare & Medicaid Services published a notice announcing its intention to collect this data.  Previously, health care interests sued CMS when it attempted in 2018 to reduce payments to providers for drugs purchased through the 340B program and the court ruled against CMS, maintaining that the agency did not have enough data on hospitals’ acquisition costs for the drugs to justify the proposed payment reduction.  The newly announced data collection effort seeks to rectify that shortcoming as the court considers CMS’s appeal of a similar decision in a lawsuit filed after CMS again proposed reducing 340B payments and was again rebuffed by the courts in 2019.

Under federal law, CMS must publish a notice declaring its intention to collect such data and seek input from stakeholders.  For this particular notice, stakeholders have until March 9 to respond.

CMS published a similar notice in September of 2019 announcing its intention to collect similar data.  That data collection never took place.  NASH opposed that data collection proposal in a formal comment letter to CMS, writing on behalf of private safety-net hospitals that

NASH and the nation’s private safety-net hospitals oppose the proposed collection of data involving the section 340B prescription drug discount program for three reasons:

  • we oppose CMS’s continued efforts to reduce 340B reimbursement to eligible hospitals;
  • the proposed data collection would be exceptionally burdensome; and
  • we disagree with attempting to address a matter still being litigated.

Most private safety-net hospitals participate in the 340B program and consider it a vital tool in serving the many low-income residents of the communities in which they are located.

See NASH’s complete comment letter here.

To learn more about CMS’s 340B data collection effort, see the notice it published in the Federal Register and read the Becker’s Hospital Review article “CMS ready to survey 340B hospitals about drug acquisition costs.”