On Monday, May 16, the Department of Health and Human Services (HHS) passed a self-imposed 60-day deadline to notify states that they did not plan to extend the Public Health Emergency (PHE), which has been in place since Jan. 31, 2020. HHS most recently extended the PHE for 90 days through July 15, 2022. It is now assumed that the PHE will go through mid-October, if not longer.

The existence of the PHE allows for regulatory flexibilities for patients, providers and payors to receive reimbursement for telehealth services; provide additional federal matching dollars for Medicaid; ensure continuous coverage for Medicaid patients; and continue coverage of COVID-19 testing and vaccines. This article summarizes many of the health care flexibilities that are tied to the PHE.

Medicare/Medicare Advantage

Testing, Treatment and Vaccine Coverage

Like with many COVID-19 flexibilities, most of the Medicare coverage requirements for COVID-19 testing and treatments are tied to the expiration of the PHE. At the start of the pandemic, Congress passed the Families First Coronavirus Response Act (FFCRA), which requires that health insurance issuers provide coverage of COVID-19 tests and related services with no cost sharing during the PHE. The law also eliminates cost sharing for Medicare Advantage (MA) enrollees for both COVID-19 testing and related services, and prohibits the use of prior authorization or other utilization management requirements for these services. In September 2020, the Trump administration took another step to bolster Medicare coverage of COVID-19 testing, finalizing a rule that requires Medicare Part B to cover diagnostic lab testing for COVID-19 without being ordered by a physician, which previously was required. Additionally, it extended Medicare coverage to antibody tests. Since Medicare Advantage plans are required to cover medically necessary Part A and Part B services, these provisions also extend to these plans. The rulemaking specifies that these policies are effective for the duration of the PHE. Most recently, in April 2022, the Biden administration finalized an initiative requiring Medicare Part B to cover up to eight over-the-counter COVID-19 tests each calendar month with no cost sharing to the patient through the end of the PHE. Medicare Advantage plans can also opt to cover the cost of at-home tests; however, this is not required.

According to the Centers for Medicare and Medicaid’s (CMS) March 2020 guidance, Medicare Part A covers all medically necessary inpatient hospital care, which includes those admitted to the hospital for the treatment of COVID-19. Medicare beneficiaries may pay a deductible for these hospital services, which under Original Medicare would be $1,408 with no coinsurance for days 1?60, a $352 per day copayment for days 61?90, and a $778 per day for lifetime reserve days. For outpatient services covered under Part B, there is a $233 deductible in 2022 and 20% copayment that applies to most services, including physician visits and emergency ambulance transportation. CMS guidance also requires Medicare to cover with no cost-sharing monoclonal antibody treatment for COVID-19. Though cost-sharing requirements under Medicare Advantage may vary across plans, CMS guidance allowed these plans to waive or reduce cost sharing for COVID-19-related treatments. In regard to oral antiviral treatments, Medicare Part D does not cover drugs authorized for emergency use, only those with full approval from the Food and Drug Administration (FDA).

The Coronavirus Aid, Relief, and Economic Security (CARES) Act included a provision requiring Medicare and Medicare Advantage plans to cover any COVID-19 vaccine and its administration without cost sharing. Prior to this policy, these services under Part B would have likely been subject to a deductible and 20% coinsurance. Unlike the laws related to testing, this provision is not tied to the PHE.

Telehealth

Under the CARES Act, Congress granted CMS the authority to waive certain restrictions for Medicare coverage of telehealth. In turn, CMS announced a number of telehealth waivers under Medicare, which most notably included the waiver of geographic restrictions, expanding originating sites to include the home, allowing an audio-only option and increasing the amount of Medicare-covered services that can be furnished through telehealth, among others. Additionally, CMS allowed federally qualified health centers (FQHCs) and rural health clinics (RHCs) to provide distant site telehealth services. These providers were previously limited to serving as an originating site for telehealth services. Congress extended these flexibilities for 151 days from the end of the PHE under the Consolidated Appropriations Act of 2022. However, absent further congressional action, most Medicare beneficiaries will lose access to coverage of nearly all telehealth services once this 151-day extension expires unless they live in a rural area. Like with cost-sharing requirements, telehealth services vary across Medicare Advantage plans, but they typically offer more telehealth benefits than traditional Medicare.

Congress did grant Medicare some telehealth flexibilities not tied to the PHE through the Consolidated Appropriations Act of 2021. The law permanently expanded mental health and substance use services provided via telehealth by removing geographic and site-of-service restrictions under the Medicare program. It also allows Medicare to permanently cover audio-only visits for mental health and substance use services.

Medicare Waivers

A number of Medicare payment and coverage waivers were put in place during the PHE to support hospitals, skilled nursing facilities (SNFs) and beneficiaries of both traditional Medicare and Medicare Advantage plans. These waivers include the following:

  • Hospitals receive a 20% increase in the Medicare payment rate through the hospital inpatient prospective payment system for treatment of patients diagnosed with COVID-19. This 20% increase is set to expire at the end of the PHE. The waiver has had a substantial impact on hospital payment rates while in effect-between January 2020 and November 2021, Medicare payment for the approximately 1 million beneficiaries in traditional Medicare hospitalized for COVID-19 totaled $23.4 billion, or just over $24,000 per patient.
  • The three-day prior hospitalization requirement is waived for SNF stays for those Medicare beneficiaries who need to be transferred because of the effect of a disaster or emergency. Further, beneficiaries who may have recently exhausted their SNF benefits can have renewed SNF coverage without first having to start a new benefit period. This waiver is set to expire no later than the end of the PHE, when Medicare beneficiaries will again be obligated to satisfy the three-day prior hospitalization requirement in order to receive Medicare coverage of SNF stays.
  • MA plans are required to cover services at out-of-network facilities that participate in Medicare, and charge enrollees who are affected by the emergency and receive care at out-of-network facilities no more than the fees they would face if receiving care at an in-network facility. This waiver is set to expire 30 days after the end of the national PHE, or state disaster declaration, if multiple declarations apply to the same geographic area. The result of this expiration could be higher out-of-pocket costs for MA enrollees who have been protected from such increased costs associated with services received from out-of-network providers.
  • Both stand-alone Medicare Part D plans and MA Part D plans must provide up to a 90-day supply of covered Part D drugs to enrollees who request such provisions. This waiver is set to expire at the end of the PHE, at which point Part D plans will no longer be obligated to issue extended supplies for all Part D drugs they cover. Prior to the PHE, most Part D enrollees were in plans that covered extended supplies of generic drugs, while only a small share of enrollees had access to extended supplies of specialty drugs.
  • Section 1135 waivers allowed the HHS secretary to waive certain program requirements and conditions of Medicare participation during the PHE to ensure beneficiaries have access to benefits and services. Through this program, CMS issued numerous blanket waivers and flexibilities for health care providers that remain in effect for the duration of the PHE to prevent gaps in access to care for beneficiaries impacted by the emergency. These waivers are set to expire no later than the end of the PHE, at which point normal rules and regulations for Medicare program requirements and conditions of participation will apply to all applicable providers and suppliers.

Medicaid

Testing, Treatment and Vaccine Coverage

During the PHE, Medicaid is required to cover COVID-19 tests, treatment and vaccines for enrollees without any cost sharing. The American Rescue Plan included a provision that requires state Medicaid and Children’s Health Insurance Plans (CHIP) programs to cover FDA-authorized at-home COVID-19 tests. These benefits are to remain in place until the last day of the calendar quarter starting one year after the end of the PHE. For example, if the PHE were to expire in mid-October 2022, these coverage requirements would expire Dec. 31, 2023. The American Rescue Plan also included federal matching funds for state Medicaid programs to cover 100% of the costs to administer vaccines. This benefit is in place for at least one year after the PHE ends.

Federal Medical Assistance Percentage (FMAP)

FFCRA provided states and territories with a 6.2 percentage-point increase in their federal share of Medicaid spending (i.e., FMAP) for the duration of the PHE. The increase does not apply to Affordable Care Act expansion adults. In order to receive the FMAP increase, states must meet the following standards:

  • No cost sharing for coronavirus-related testing and treatments including vaccines, specialized equipment or therapies;
  • Continuous enrollment for eligible individuals; can’t transfer enrollee to a more restrictive benefit package;
  • Maintain eligibility standards as of Jan. 1, 2020; and
  • No increase to premiums as of Jan. 1, 2020.

When the PHE ends, the 6.2 percentage point increase that states and territories receive from the federal government will end. States will be responsible for the difference in spending, which is likely to increase due to the increased costs to Medicaid and enrollment.

Continuous Coverage Requirement

FFCRA included a requirement for states to maintain continuous coverage for their Medicaid enrollees as a condition of receiving the temporary 6.2 percentage point FMAP increase. States have been required to maintain enrollment of nearly all Medicaid enrollees. As a result, Medicaid enrollment has increased by approximately 15 million individuals since February 2022, according to the Kaiser Family Foundation. When the PHE expires, states will have up to 12 months to do redeterminations on their Medicaid populations and 12 months to return to normal eligibility and enrollment operations.

CMS has already put out guidance to state Medicaid programs on how to go about the process to determine eligibility and enrollment for their Medicaid populations. In this guidance, CMS encourages states to initiate, rather than complete, their pending redeterminations during the 12-month unwinding period.

Telehealth

There have existed few federal requirements or restrictions for Medicaid coverage of telehealth prior to the coronavirus pandemic. States have broad flexibility to determine the scope, if any, of telehealth services that will be covered and reimbursed. All 50 states and D.C. have expanded telehealth coverage and services in Medicaid during the pandemic. States have been able for decades to include telehealth in their services, but the pandemic has accelerated their use.

Since Medicaid telehealth services have been determined state by state, the implication of the PHE ending can have various effects. In some states the increase in coverage and services is tied to the federal and/or state public health emergencies. For example, policies in Alaska, North Dakota and South Carolina are tied to the federal PHE; whereas Arizona, California and Indiana are tied to their state’s PHE. Some states have made these changes in telehealth permanent already. In states that have tied their services to the PHE, these services will end.

Section 1115 Waivers

Section 1115 waivers offer states an avenue to test new approaches in Medicaid that differ from what is required by federal statute and regulations and provide states considerable flexibility in designing their Medicaid program. On March 22, 2020, CMS developed new Medicaid Section 1115 demonstration waivers to assist states with addressing the outbreak of COVID-19. The demonstration waivers specifically targeted waiver opportunities to home- and community-based services (HCBS) programs. Under these waivers, there are requirements for monitoring and evaluation, but CMS is not requiring states to submit calculations showing that the waivers would be budget neutral to the federal government or conduct a public notice and input process. These waivers are set to expire 60 days after the PHE ends or an earlier date approved by CMS. States may submit Section 1115 requests to continue waiver flexibilities even after the PHE ends.

Section 1135 Waivers

If a president declares an emergency or disaster and the secretary of HHS declares a public health emergency, the secretary can use Section 1135 to waive or modify certain Medicare, Medicaid and CHIP requirements for beneficiaries to access benefits and services. After the PHE declaration, CMS issued numerous blanket Section 1135 waivers for many Medicaid provisions for health care providers that remain in effect for the duration of the PHE to prevent gaps in access to care for beneficiaries impacted by the emergency. These waivers are set to expire no later than the end of the PHE, at which point normal rules and regulations for Medicare program requirements and conditions of participation will apply to all applicable providers and suppliers. These waivers range in scope from broadening the range of practitioners who can furnish telehealth services, to altering various reporting requirements, to adjusting length of stay requirements and more.

Disaster Relief State Plan Amendments (SPAs)

During the COVID-19 PHE, all 50 states and Washington, D.C., made use of Disaster Relief SPAs. Disaster Relief SPAs allow HHS to approve state requests to make temporary changes to address eligibility, enrollment, premiums, cost-sharing, benefits, payments and other policies differing from their approved state plan on a temporary basis during the PHE. States, however, may not make changes that restrict or limit payment, services or eligibility or otherwise burden beneficiaries and providers. States made a significant number of changes, with some of the most common being increasing existing state plan payment rates (39 states); adjusting existing benefits (e.g., waiving service limits) (30 states); waiving requirements for timely processing of Medicaid applications and/or renewals (29 states); delaying acting on changes in circumstances or extending the redetermination period in CHIP (28 states); eliminating, waiving, suspending or delaying enrollment fees, premiums or similar charges in CHIP (23 states); making exceptions and changes to the preferred drug list (26 states); and temporarily increasing the payment for COVID-19 vaccine administration to 100% of the Medicare rate, among many others.

While all temporary changes made under Disaster Relief SPAs are set to expire at the end of the COVID-19 PHE, or at earlier dates selected by the state, states can choose to continue policy changes such as streamlining eligibility and enrollment, adding benefits and increasing provider rates after the PHE through regular SPA authority. States may also submit Section 1115 requests to continue some emergency flexibilities. If states do not take action to do so, however, beneficiary access to services and support for providers will decrease significantly.

Private Insurance

Testing, Treatment and Vaccine Coverage

Many of the requirements imposed on private payers related to COVID-19 testing are tied to the expiration of the PHE. The CARES Act and related legislation requires private insurers to cover COVID-19 tests and testing-related services at no cost to the enrollee and with no prior authorization. This also includes point-of-care PCR tests, and applies tests and related services provided by out-of-network providers as well. In January 2022, guidance from CMS required group health plans and individual plans to pay for over-the-counter rapid COVID-19 tests as well. This guidance relies on authorities from the CARES Act and FFCRA and requires plans to pay for eight over-the-counter tests per month, per enrollee, up to $12 per test, and no doctor’s authorization is required. Once the PHE ends, all of these requirements will end, resulting in some enrollees paying cost-sharing for PCR and over-the-counter tests going forward, and potentially reducing access for some enrollees.

Regarding the coverage of vaccines, the CARES Act provides that private plans must cover the COVID-19 vaccine and boosters as a preventative service. This requirement is permanent and extends beyond the public health emergency. As it relates to reimbursement, during the PHE all private plans are required to cover COVID-19 vaccines and boosters at no cost-sharing, whether or not the provider is in-network. When the PHE ends, enrollees may have to pay out-of-pocket costs if they receive a COVID-19 vaccine dose from an out-of-network provider.

Unlike testing and vaccination requirements, there is no federal requirement that private insurers waive costs associated with the treatment of a patient diagnosed with COVID-19.

Telehealth

While private plans have broadened coverage of telehealth services due to COVID-19, there is no federal requirement related to telehealth coverage or reimbursement in the private market. Many states, however, require plans to reimburse for telemedicine and the rules vary widely by state. At the start of the COVID-19 outbreak, all states and D.C. waived state licensure requirements temporarily and these waivers are still in place in about 20 states.