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October 16, 2020

Health Law Weekly

COVID-19 Updates and Developments (Week of October 12)

  • October 16, 2020

The Centers for Medicare & Medicaid Services (CMS) is adding 11 new services to the list of telehealth services that Medicare will pay for during the COVID-19 public health emergency (PHE), the agency announced October 14.

Payment for the additional services, which include cardiac and pulmonary rehabilitation services, when delivered via telehealth is effective immediately through the duration of the PHE.

The ongoing expansion of Medicare reimbursement for telehealth services follows an executive order President Trump issued in August aimed at improving health care in rural areas, including further expanding access to telehealth.

The latest additions bring the total number of telehealth services reimbursable by Medicare to 144, including emergency department visits, initial inpatient and nursing facility visits, and discharge day management services.

CMS added the 11 services using the new expedited process put in place under an interim final rule issued in May that allows the agency to include or delete services from the Medicare list of telehealth services during the PHE without rulemaking.

CMS reported that between mid-March and mid-August, more than 12.1 million beneficiaries in traditional Medicare, or over 36%, received a telemedicine service.

The agency also issued preliminary data on telehealth utilization in Medicaid and the Children’s Health Insurance Program (CHIP) during the PHE. According to the data, more than 34.5 million services were delivered via telehealth to Medicaid and CHIP beneficiaries between March and June—a 2,600% increase over the same period in 2019.

Agency Action

Centers for Medicare & Medicaid Services

October 15—Starting January 1, 2021, Medicare will pay laboratories $100 reimbursement per high-throughput COVID-19 diagnostic test only if the tests are completed within two calendar days, the agency announced. Labs that use high-throughput technology but take longer than two days will receive $75 per test, CMS said. In April, CMS bumped up Medicare payment to labs for high-throughput COVID-19 tests from roughly $51 to $100 per test. The changes were made in an amended Administrative Ruling (CMS 2020-1-R2), which lowers the base payment amount for COVID-19 diagnostic tests run on high-throughput technology to $75, with the potential for a $25 add-on payment to labs that complete the majority of tests on all patients (not just Medicare patients) in two calendar days or less in the previous month.

October 9—CORRECTION. CMS issued a frequently asked question clarifying that Provider Relief Funds may not be used to repay Medicare loans under the Accelerated and Advance Payment Program. CMS last week announced that health care providers and suppliers will have additional time to repay Medicare loans they received under the program. A recently enacted continuing resolution gave providers and suppliers one year from the issuance date of the accelerated or advance payment to begin repayment, which previously was supposed to begin in August. A CMS press release, which has since been updated, incorrectly stated that Provider Relief Funds could be used to repay the Medicare loans.

October 9—CMS has issued cease and desist letters to 171 laboratories that were performing COVID-19 tests without appropriate certifications under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). Facilities that conduct COVID-19 testing must be certified under CLIA, which verifies that labs meet federal performance and quality standards to help ensure they provide reliable results. According to CMS, 34% of the labs that were ordered to stop testing were operating without a CLIA certificate, while the remaining 66% were performing COVID-19 testing outside the scope of their existing CLIA certification. The letters provided non-certified labs with information on how to become CLIA certified and encouraged certified labs to obtain proper CLIA certification so they could resume COVID-19 testing

Department of Health and Human Services (HHS)

October 13—HHS awarded $481 million to Cue Health, Inc. to scale-up production of its point-of-care COVID-19 molecular test that produces results in about 20 minutes. HHS said the agreement will allow Cue to increase domestic product to 100,000 COVID-19 test kits per day by March 2021 and deliver six million COVID-19 tests and 30,000 instruments to the federal government, a press release said. Federal officials said the accuracy of Cue’s COVID-19 test, which uses a nasal swab collected from the lower part of the nose using a sample wand that is part of the test kit, is nearly on par with lab tests that can take several days to produce results.

October 13—HHS is providing roughly $31 million to Massachusetts-based Cytiva to expand its manufacturing capacity for products essential to producing COVID-19 vaccines, such as liquid and dry powder cell culture media, cell culture buffers, mixer bags, and XDR bioreactors. Cytiva is a major manufacturer of pharmaceutical consumables and hardware products and the primary supplier to many of the companies currently working with the U.S. government to develop COVID-19 vaccines, the agency said.

October 9—HHS is investing $486 million in AstraZeneca’s experimental monoclonal antibody AZD7442 product, which may help treat or prevent COVID-19. The contract is part of the administration’s Operation Warp Speed initiative, the agency said in a press release. The agreement with AstraZeneca is for late-stage development and large-scale manufacturing of AZD7442, a cocktail of two monoclonal antibodies, if approved by the Food and Drug Administration. The company is starting two Phase 3 clinical trials: one that will enroll roughly 5,000 volunteers to evaluate the safety and efficacy of the AZD7442 to prevent infection for up to a year and a second study that will involve approximately 1,100 volunteers to test whether the product can help prevent infection after someone is exposed to COVID-19. The company estimates 100,000 doses of AZD7442 could be available by December 2020 for the nation's high-risk population, HHS said.

National Institutes of Health (NIH)

October 13—NIH plans to study whether certain approved therapies or investigational drugs show promise against COVID-19 and merit advancement into larger clinical trials, the agency announced. The ACTIV-5 Big Effect Trial will enroll adult volunteers hospitalized with COVID-19 at as many as 40 U.S sites, the agency said. The study is being conducted in collaboration with the NIH’s public-private partnership Accelerating COVID-19 Therapeutic Innovations and Vaccines (ACTIV) program.

Other Developments

October 9—A bipartisan group of Senate lawmakers are raising concerns about recent changes that HHS made to post-payment reporting requirements for funding distributed under the CARES Act. The lawmakers said the new requirements could put additional financial strain on hospitals, particularly safety net and rural providers. Senate Republicans and Democrats sent separate letters to HHS Secretary Alex Azar asking him to reconsider the new policy. Under frequently asked questions issued in June, HHS broadly defined “lost revenue” for purposes of accounting for provider relief funds as “any revenue that . . . a health care provider lost due to coronavirus.” The agency narrowed that definition, however, in a notice issued September 19. Under the more recent guidance, “lost revenue” is defined as “a negative change in year-over-year net patient care operating income,” which groups like the American Hospital Association have said could result in some hospitals needing to return funds. AHA in September also urged Azar to reinstate the previous guidance, noting rural hospitals in particular are likely to be adversely affected by the new requirements. “We are concerned that this change in reporting requirements changes the terms of the relief as providers initially understood them based on the initial June guidelines—further exacerbating the financial challenges and uncertainty that these systems continue to grapple with as a result of the pandemic,” according to the letter sent by Senate Democrats.