Accounting and Financial Reporting

Coronavirus bill provides hospitals with $100 billion, other policy wins

April 1, 2020 8:02 pm
  • The coronavirus response bill would provide $100 billion to hospitals.
  • The start of Medicaid Disproportionate Share Hospital cuts would be further delayed to Nov. 30.
  • States, a critical hospital partner, would receive $150 billion for addressing the pandemic.

Hospitals would get much of the direct funding they had sought from Congress, as well as other long-sought provisions, under a quickly advancing, historic stimulus in response to the coronavirus pandemic.

The Senate on March 25 released the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, which a bipartisan group of legislators negotiated over the last week with the White House. The Senate was expected to pass the measure late on March 25, and the House of Representatives was expected to vote March 26.

In response to requests from hospitals and their advocates, the legislation includes:

  • $100 billion for hospital “COVID-19 related expenses and lost revenue”
  • $275 million for rural hospitals, telehealth, poison control centers and HIV/AIDS programs
  • $250 million for hospital capacity expansion and response
  • $150 million for modifications of existing hospital, nursing home and “domiciliary facilities” in response to the coronavirus

Medicare provisions include suspending the 2% Medicare sequester from May 1 through Dec. 31, 2020. The sequester then would be extended by one year.

The bill also would increase by 20% any Medicare payment to hospitals for the treatment of a patient admitted with COVID-19 “through the duration of the COVID-19 emergency period.”

There would be a further delay of the $4 billion in scheduled cuts to Medicaid Disproportionate Share Hospital payments, from May 22 to Nov. 30, 2020.

Certain hospitals, including rural and frontier hospitals, could request up to a six-month advanced lump sum or periodic payment from Medicare. Such payments would:

  • Be based on net payment represented by unbilled discharges or unpaid bills
  • Total up to 100% of the prior-period payments, and up to 125% for critical access hospital
  • Give hospitals four months to start paying down the no-interest loan and at least 12 months to complete repayment

The bill also includes so-called Medicare extenders, which are a series of Medicare provisions that Congress must reauthorize each year. For instance, the bill contains an extension — through Dec. 1, 2020 — of the physician work geographic index floor, which would increase payments for the work component of physician fees in areas where labor cost is lower than the national average.

The main funding amount matches the $100 billion requested in a March 19 letter from the American Hospital Association.

However, the measure does not appear to make loans available for most hospitals as hospital executives have requested. For example, the Federation of American Hospitals recently sent legislators a letter requesting $100 billion in loans for hospitals.

Other hospital provisions

Beyond direct financing, the bill’s provisions would affect hospital operations in many other ways.

The measure would give acute care hospitals the option to transfer patients out of their facilities and into alternative care settings to “prioritize resources needed to treat COVID-19 cases.” That flexibility would come through the waiver of the Inpatient Rehabilitation Facility (IRF) three-hour rule, which requires patients to need at least three hours of intensive rehabilitation at least five days per week to be admitted to an IRF.

The change also would allow a Long-Term Care Hospital (LTCH) to maintain its designation even if more than 50% of its cases are less intensive. And it temporarily would pause LTCH site-neutral payments.

The bill would stop scheduled Medicare payment cuts for durable medical equipment during the length of the COVID-19 emergency period, to help patients transition from hospital to home.

Also, the bill would disallow Medicare beneficiary cost-sharing payments for any COVID-19 vaccine.

Uninsured individuals could receive free COVID-19 tests “and related service” through any state Medicaid program that elects to enroll them.

Other healthcare provisions

The bill includes many provisions that directly affect other entities but have implications for hospitals.

For instance, the bill would provide $150 billion to states, territories and tribal governments to cover their costs for responding to the coronavirus public health emergency.

Also, physician assistants, nurse practitioners and other professionals will be allowed to order home health services for Medicare beneficiaries, to increase “beneficiary access to care in the safety of their home.”

Other emergency-period provisions include:

  • Requiring HHS to clarify guidance encouraging the use of telecommunications systems, including remote patient monitoring, for home health services
  • Allowing qualified providers to use telehealth technologies to fulfill the hospice face-to-face recertification requirement
  • Eliminating the requirement that a nephrologist conduct some of the required periodic evaluations of a home-dialysis patient face-to-face
  • Allowing federally qualified health centers and rural health clinics to serve as a distant site for telehealth consultations
  • Eliminating the telehealth requirement that physicians or other professionals have treated a patient in the past three years
  • Allowing high-deductible health plans with a health savings account (HSA) to cover telehealth services before a patient reaches the deductible
  • Allowing patients to use HSA and flexible spending accounts to buy over-the-counter medical products without a prescription



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