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August 28, 2020

Health Law Weekly

COVID-19 Updates and Developments (Week of August 24)

  • August 28, 2020

The Centers for Medicare & Medicaid Services (CMS) unveiled this week new reporting and testing requirements for nursing homes, hospitals, laboratories, physicians, and pharmacies that include potential sanctions and termination from Medicare and Medicaid for noncompliance.

“These new rules represent a dramatic acceleration of our efforts to track and control the spread of COVID-19,” said CMS Administrator Seema Verma. “Reporting of test results and other data are vitally important tools for controlling the spread of the virus and give providers on the front lines what they need to fight it.”

The interim final rule with comment period revises infection-control regulations for long term care facilities participating in Medicare and Medicaid to require nursing homes to routinely test staff for COVID-19. Nursing homes also must offer testing to residents for COVID-19 when there is an outbreak or residents show symptoms.

CMS released August 26 follow-up guidance for nursing homes that includes instructions on the frequency of the required testing, reporting documentation requirements, and a revised facility survey tool for program compliance.

For example, the guidance notes that all staff and residents should be tested after a single new case of COVID-19 in any staff or residents. All staff and residents that tested negative should be retested every three days to seven days for a period of 14 days since the most recent positive result.

According to the guidance, routine staff testing should be tied to their county’s positivity rate in the prior week. County-level positivity rates will be available at, starting August 28, CMS said.

The guidance advises that in areas with low community activity (less than 5% positivity rate), staff testing should occur, at a minimum, once a month. In areas with moderate community spread (a positivity rate between 5% and 10%), nursing homes should perform testing once a week. Nursing homes should test twice weekly in areas with a high degree of community spread (more than 10% positivity). The guidance notes that the frequency of testing is subject to availability of Point of Care testing on-site at the nursing home or where off-site testing turnaround time is less than 48 hours.

Facilities that fail to comply with the new testing requirements may face civil money penalties (CMPs) of more than $400 per day, or over $8,000 for an instance of noncompliance.

According to CMS, the additional $5 billion in Provider Relief Funds under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that the administration released in July for nursing homes will help offset the cost of the new testing requirements. HHS said August 27 that $2.5 billion of those additional funds have been distributed to nursing homes. HHS previously provided $4.9 billion in CARES Act funding to skilled nursing facilities. The agency plans to distribute another $2 billion to nursing homes later this fall based on performance indicators.

Under the interim final rule, hospitals and critical access hospitals, as a condition of Medicare and Medicaid participation, now must report data on a daily basis including the number of confirmed or suspected COVID-19 positive patients, ICU beds occupied, and availability of essential supplies and equipment such as ventilators and personal protective equipment (PPE).  

Earlier in the pandemic, the administration asked hospitals to report the results of in-house COVID-19 testing voluntarily, but CMS said not all of them are doing so. Hospitals’ Medicare and Medicaid payments now are at risk if they fail to report, CMS said.

In additional to hospital labs, CMS also is requiring clinical labs—as well as nursing homes and other facilities conducting COVID-19 testing—to report the test results to the Department of Health and Human Services (HHS). CMS issued August 26 additional guidance on the new requirements for clinical labs.  

Labs that fail to report will face a CMP of $1,000 per day for the first day, and $500 for each subsequent day. CMS is giving labs a one-time, three-week grace period to begin reporting required test data.

CMS also revised its testing policy to provide that each Medicare beneficiary may receive one COVID-19 test without the order of a physician. Subsequent tests must be ordered by a physician or other health practitioner, including pharmacists, the agency said. CMS said the policy change is aimed at ensuring beneficiaries are receiving appropriate medical care and to prevent fraud.

In an August 25 statement, American Hospital Association (AHA) President Rick Pollack called the new rules “heavy-handed.”  

“America’s hospitals remain fully committed to ensuring that the federal government gets the data it needs. It’s beyond perplexing why CMS would use a regulatory sledgehammer--threatening Medicare participation--to the very organizations that are on the frontlines in the fight against COVID-19. This rule should be reversed immediately,” Pollack said.

Agency Action

Department of Health and Human Services

August 25—HHS released 1.5 million N95 respirators from the Strategic National Stockpile for distributing to the nation’s over 3,300 nursing homes. Shipments will begin August 28 to nursing homes that recently reported low supplies of N95 respirators. The distributions will be based on the number of medical staff employed at the facility.

August 25—HHS extended the deadline until September 13 to apply for Phase 2 General Distribution Funding under the CARES Act for providers that haven’t already received funding equal to 2% of total patient revenue. The previous deadline was August 28.

Centers for Medicare & Medicaid Services

August 26—CMS issued additional Frequently Asked Questions (FAQs) to Medicare providers on the Provider Relief Fund and Paycheck Protection Program payments. CMS said the FAQs provide guidance on how providers report provider relief fund payments, uninsured charges reimbursed through a program administered by the Health Resources and Services Administration, and Small Business Administration (SBA) Loan Forgiveness amounts. The FAQs also address that provider relief fund payments should not offset expenses on the Medicare Cost Report, CMS said.   

August 25—CMS released August 25 a national nursing home training program to help facilities prevent outbreaks of COVID-19. The CMS Targeted COVID-19 Training for Frontline Nursing Home Staff and Management program focuses on areas including infection control and prevention, appropriate screening of visitors, effective cohorting of residents, safe admission and transfer of residents, and the proper use of PPE. CMS said the training builds on best practices and lessons learned through nursing home inspections, from Centers for Disease Control and Prevention (CDC) experts, and from findings of federal nursing home task force strike teams. The training includes modules for frontline staff such as screening and surveillance and cleaning and for nursing home management, including basic infection control, emergency preparedness, telehealth, and preparing for vaccine delivery. The training will be available on the CMS Quality, Safety & Education Portal. CMS also is offering an online self-assessment tool at to help nursing homes select the training modules that best meet their needs. CMS also is directing Quality Improvement Organizations to include the training in action plans they develop with nursing homes as part of existing quality improvement efforts.

August 24—CMS issued guidance to states on flexibilities for increasing Medicaid reimbursement to nursing facilities that implement specific infection control practices for COVID-19 such as designating a quarantine or isolation wing. The guidance, issued as a Medicaid Informational Bulletin, includes information on the Disaster State Plan Amendments template and describes how states may use state-directed payments to increase reimbursement to nursing facilities in managed care. 

Food and Drug Administration (FDA)

August 26—The FDA issued an EUA to Abbott Diagnostics Scarborough, Inc for its BinaxNOW COVID-19 Ag Card, the first antigen test for COVID-19 where results can be read in minutes right from the testing card, similar to some pregnancy tests, without the use of an analyzer. The test is performed on a sample collected by a health care provider from a nasal swab of the patient. In about 15 minutes, the test card will display one line for a negative result and two lines for a positive result. The FDA said the test can be used at the point of care and may be more broadly available in the future. Abbot plans to make 50 million tests available monthly beginning in October. The FDA noted that antigen tests aren’t as sensitive as molecular tests so follow up testing may be necessary to confirm negative results. Meanwhile, on August 27, HHS announced a $760 million deal with Abbott for 150 million units of its rapid diagnostic tests. "Testing will be potentially deployed to schools and to assist with serving other special needs populations," HHS said. 

August 23—The FDA issued an emergency use authorization (EUA) for COVID-19 investigational convalescent plasma to treat suspected or laboratory-confirmed cases of COVID-19 in hospitalized patients. FDA said the decision was based on available scientific evidence that the benefits of administering convalescent plasma—which is taken from individuals who recovered from COVID-19 and have antibodies to the virus—outweigh the known and potential risks. According to the FDA, “it is reasonable to believe that COVID-19 convalescent plasma may be effective in lessening the severity or shortening the length of COVID-19 illness in some hospitalized patients.” Clinical trials to definitively demonstrate safety and efficacy of the treatment remain ongoing, the agency said. The FDA issued fact sheets to health care providers and patients, including dosing instructions and potential side effects, related to using COVID-19 convalescent plasma in treating COVID-19. After facing backlash for overstating the benefits of convalescent plasma when announcing the EUA, FDA Commissioner Stephen Hahn, MD, said in tweet on August 24 that the “criticism is entirely justified.” According to Hahn, “[w]hat I should have said better is that the data show a relative risk reduction not an absolute risk reduction.” He also emphasized in a series of tweets that the decision was “data driven” and not politically motivated.

Office for Civil Rights (OCR)

August 23—OCR updated guidance that health plans, as well as health care providers, can use the use protected health information (PHI) to identify individuals who have recovered from COVID-19 and provide them information about donating their plasma containing antibodies to SARS-CoV-2 without running afoul of the Health Insurance Portability and Accountability Act (HIPAA) privacy rule. OCR added health plans to the June 2020 guidance, which makes clear that “health care operations” include identifying and contacting individuals about donating plasma with antibodies to COVID-19 as part of case management and care coordination activities. The guidance also notes that communications encouraging individuals to use a particular blood or plasma donation center constitute marketing, unless meeting an exception, and therefore would require an individual’s authorization.

Centers for Disease Control and Prevention (CDC)

August 24—CDC issued updated COVID-19 testing guidelines. The revised guidelines indicate that asymptomatic individuals who have been within six feet of a person with COVID-19 for at least 15 minutes do not necessarily need a test unless they are a “vulnerable individual” or health care providers or public health officials recommend they take one. The updated guidance also provides that asymptomatic individuals in high COVID-19 transmission areas who have attended gatherings of more than ten people without widespread mask wearing or physical distancing don’t necessarily need a test, again unless they are a “vulnerable individual” or their health care provider or public health officials recommend it. The change drew swift criticism from public health experts who stressed that testing of asymptomatic individuals is key to controlling the spread of COVID-19. According to published reports, CDC Director Robert Redfield subsequently issued a statement clarifying the guidelines, indicating that all close contacts of confirmed or probable COVID-19 patients could consider testing.

Other Developments

August 26—The American Hospital Association (AHA) urged CMS not to require a positive test result for COVID-19 for hospitals to be eligible for the 20% diagnosis-related group (DRG) add-on payment to the inpatient prospective payment system for patients diagnosed with COVID-19. In updated guidance issued August 17, CMS added a requirement to have a positive COVID-19 laboratory test documented in the patient’s medical record for the claim to be eligible for the DRG add-on payment, which was included in the CARES Act. The new COVID-19 test documentation requirement for the DRG add-on payment is set to go into effect for inpatient admissions on or after September 1. In a letter to CMS Administrator Seema Verma, AHA argued the new requirement “will put substantial administrative burden on hospitals” and urged the agency “to continue flexibility in eligibility for the DRG add-on payment.”