Skip to Main Content

Unmasking the Future of Personal Protective Equipment Costs in the Aftermath of COVID-19: Interventions in Response to Increased Health Care Costs

This Bulletin is brought to you by AHLA’s Hospitals and Health Systems Practice Group.
  • July 20, 2020
  • Becky Bye, DDS, JD

Historically, health care facilities have maintained and utilized multiple levels of personal protective equipment (PPE) for providers and patients; however, the COVID-19 pandemic has triggered a significant increase in PPE use and a paradigm shift for the type that is necessary.

For centuries, physicians, dentists, and others in the health care industry have provided care absent a standardized approach regarding provider and patient protection; this is largely due to the limited understanding of infectious diseases until recently.

In the latter half of the twentieth century, the precursor agency to the Centers for Disease Control (CDC) issued a standard manual for hospitals with certain personal precautions. It was simple and user-friendly, establishing seven categories based on the physical source of exposure: Strict, Respiratory, Protective, Enteric, Wound and Skin, Discharge, and Blood.[1]

In the 1980s, a then-mysterious virus swept the world and the United States—the Human Immunodeficiency Virus, or HIV. At the time, as the medical world grappled with the communicable and untreatable nature of this virus, the CDC drastically evolved its stance on safety measures for health care providers. Instead of identifying protocols based on the physical composition of the potential bodily fluids, the CDC recommended providers assume that every patient had a communicable disease tantamount to HIV and advised providers to use PPE accordingly. Hence, these were “universal precautions” in the sense they were used on all patients, not just patients with known medical conditions.[2]

Similar to the shifting PPE principles in response to HIV, COVID-19 prompted new, significantly heightened PPE protocols. Instead of utilizing protection in specific health care situations to avoid blood and mucous membrane exposure, the newer CDC and Food and Drug Administration (FDA) guidelines recommend more drastic measures to avoid all aerosols, which are inevitable in many patient encounters.[3]

Aerosols are the fragments of saliva and other bodily fluids that expel when people talk, cough, sneeze, or undergo a medical procedure that involves the oral or nasal cavity. Previously, certain health care visits warranted little to no PPE, such as skin checks with a dermatologist or some wellness visits with a Primary Care Physician, but now all providers and health care facilities require some form of PPE for every patient encounter.

Other types of health care providers remain at an even higher risk of exposure to aerosols by the nature of their specialties, such as dentists, oral surgeons, otolaryngologists, and anesthesiologists. As such, they must increase their PPE supply and alter the type of PPE they integrate into their practice, resulting in significant additional costs. These additions may include incorporating more expensive N95 respirator masks rather than standard surgical masks, adding face shields, and wearing gowns.[4]

In addition, the increased PPE requirements impact other health care facilities, such as long term care facilities and nursing homes. These facilities have faced a dramatic and unanticipated increase in the required PPE supply to keep staff and residents safe. Furthermore, many of these facilities receive their patient revenue from the Centers for Medicare & Medicaid Services (CMS). While CMS will not directly subsidize for PPE, CMS still mandates adherence to the revised CDC infection control guidelines.[5] As a result, some sources indicate that home care facilities now face increased costs of up to 1000% during this unprecedented time.[6]

Health care providers are not the only consumers of PPE. Businesses and the general public have also increased their use of medical-grade PPE in response to COVID-19. The overall increased consumption of PPE creates a critical strain on many PPE suppliers, resulting in increased prices. This generates a myriad of economic and legal issues for health care providers, as many now have significant increased overhead costs while simultaneously experiencing a reduction in patient volume.[7]

Potential Solutions to Increased Health Care Costs

Insurance/Third-Party Payers      

One unanswered question that remains regarding the increased price and usage of PPE is whether insurance companies will reimburse providers for increased PPE-related costs.

In response to these novel overhead costs, the American Dental Association (ADA) issued interim guidance regarding third-party payers and PPE fees.[8] The ADA recognizes “[t[he cost of infection control procedures has skyrocketed…costs of personal protective equipment (PPE) including N95 masks…has increased due to supply shortages with prices variable across the nation…”[9] The ADA also urges third party payers to adjust the maximum allowable fee for procedures or to allow an additional fee to accommodate increased PPE costs.[10]

For other health care sectors, minimal guidance currently exists regarding insurance reimbursements for increased PPE. It is likely that CMS and third-party payers will reassess insurance coverage in light of these circumstances.

Funding Support from Federal and State Governments

The federal government initially responded to COVID-19’s economic consequences via the Coronavirus Aid Relief, and Economic Security Act (CARES Act).[11] The Paycheck Protection Program (PPP) and other business funding included, but was not exclusive to, health care entities.[12]

Aside from helping businesses in general, the CARES Act also helped health care providers and entities in other ways. Title III of the CARES Act directly addressed “Supporting America’s Health Care System in the Fight Against the Coronavirus.”[13] It amended several sections of the Public Service Health Act by adding language regarding “personal protective equipment”; this change primarily related to integrating PPE into the national stockpile for emergencies.[14]

The CARES Act also allowed for increased reimbursement rates for inpatient treatments at hospitals for COVID-19 patients.[15] This may indirectly defray increased PPE costs. Similarly, and consistent with CARES Act objectives, CMS expanded its Accelerated and Advance Payment Program for Medicare providers and supplies impacted by COVID-19.[16]

The CARES Act also apportioned $100 billion to the Public Health Fund to reimburse “eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus.”[17] For purposes of this relief, an “eligible healthcare provider” includes “public entities, Medicare or Medicaid enrolled suppliers and providers, and such for-profit entities and not-for-profit entities…that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID–19.”[18]

While the CARES Act helps alleviate some PPE-related financial burdens on the health care industry, it is limited to the treatment of COVID-19 patients—not necessarily treatment for non-COVID-19 purposes nor does it account for the lost revenue due to the stoppage of many non-essential treatments and medical services.

The U.S. House of Representatives recently proposed a bipartisan bill that allocates a tax credit of up to $25,000 for small businesses to purchase PPE, including gloves, N95 respirators, gowns, hand sanitizers, and more.[19] The credit applies to: “to small businesses, non-profits, independent contractors, veterans' organizations, and farmers, among other entities…relating to COVID-19.”[20] Presumably, the application of this bill would likely include hospitals and private health care practices; however, further details regarding the bill remain elusive.

Given the everchanging status quo, it is likely and anticipated by many that additional federal and state initiatives will address increased health care costs, including overhead, in the form of grants, tax credits, loans, and other means.

Government Apportionment

On April 3, 2020, President Trump invoked his power under the Defense Production Act of 1950 to direct the Department of Homeland Security and the Federal Emergency Management Agency (FEMA) to allocate specific PPE, including N95 respirators, surgical masks, and gloves to providers, as necessary.[21] Accordingly, FEMA secured and has allotted PPE to certain sectors of the health care industry.[22] The U.S. Department of Health and Human Services (HHS) also purchased N95 respirators and other equipment for the Strategic National Stockpile.[23]

In a recent letter to Vice President Pence and FEMA, the American Medical Association (AMA) urged immediate action to address the PPE shortages, especially regarding N95 masks and gowns.[24] In the letter, the AMA also noted that many physicians who previously did not employ certain types of PPE lack pre-existing vendor relationships, which forces them into a diminished and vulnerable bargaining position to provide care in a safe and cost-effective manner.

Telehealth

Innovations in technology allowed the integration of telehealth services before COVID-19. However, COVID-19 catalyzed a significant demand and increase for these services, which are likely to remain in effect. The benefits of telehealth include allowing patients to communicate with and “see” their providers in a safe, aerosol-free environment. More importantly, it allows health care providers to preserve PPE for encounters that require face-to-face contact, which inherently involve more exposure to aerosols. Telehealth visits allow health care providers to continue to maintain their patients’ health, while also still generating revenue.
 
The CARES Act also eliminated previous barriers of entry to telehealth; for example, it increased certain flexibilities for Medicare patients during telehealth encounters.[25] Another section of the CARES Act mandated that the Secretary of HHS “consider ways to encourage the use of telecommunications systems…”[26] Therefore, further usage of telehealth encounters is anticipated.

Other Solutions

Some providers may have the ability to charge a nominal PPE surcharge for services directly to the patient. This is most notable in smaller provider-owned practices, such as dental offices, given the already high, fixed overhead and the extreme likelihood of exposure to aerosols.[27]
 
Manufacturers and distributers are also helping to alleviate the PPE crisis. Some are attempting to prevent arbitrary PPE price inflation and the sale of counterfeit items.[28] Manufacturers are also increasing their production efforts and working with government entities to ensure an adequate supply of PPE.[29] Other manufacturers are also offering PPE to certain health care entities at their own production and acquisition costs.[30]

The Future of PPE and Health Care

Since the initial and widely reported supply shortages in early 2020, PPE is now more generally accessible; however, the increased costs and constrained supplies still pose an ongoing challenge. Increased health care costs not only affect the health care industry but also deeply affect patients. For those who have limited means to access health care, increased costs may force many to forego routine appointments, which can escalate their medical conditions.
 
In the foreseeable future, all necessary parties, such as PPE manufactures and suppliers, health care entities, providers, patients, governments, and third-party payers, must join in a concerted effort to increase access to PPE while maintaining reasonable health care costs.[31]
 
It remains unclear whether the increased amount and heightened categories of PPE will disappear when we resolve the COVID-19 crisis or whether the new requirements are indefinite. Perhaps, we will now embark on a new era of PPE protocols.[32]
 
Becky Bye is an attorney and general dentist. She received her undergraduate degree in chemistry and religion from Colgate University, her law degree from the University of Denver Sturm College of Law, and a Doctor of Dental Surgery from the University of Colorado School of Dental Medicine. She currently practices law in Denver, Colorado. You can email her at [email protected].

 


[1] History of Guidelines for Isolation Precautions in Hospitals, Appendix A, Centers for Disease Control and Prevention (2007), https://www.cdc.gov/infectioncontrol/guidelines/isolation/appendix/history.html.

[2] Id.

[3] Interim Infection Prevention and Control Recommendations for Healthcare Personnel During the Coronavirus Disease 2019 (COVID-19) Pandemic, Centers for Disease Control and Prevention (June 24, 2020), https://www.cdc.gov/coronavirus/2019-ncov/hcp/infection-control-recommendations.html (last visited July 5, 2020). See also Coronavirus (COVID-19) and Medical Devices, U.S. Food and Drug Administration (June 19, 2020), https://www.fda.gov/medical-devices/emergency-situations-medical-devices/coronavirus-covid-19-and-medical-devices (last visited July 5, 2020).

[4] Interim Infection Prevention and Control Recommendations for Healthcare Personnel During the Coronavirus Disease 2019 (COVID-19) Pandemic, supra note 1.

[5] COVID-19 Long-Term Care Facility Guidance, Centers for Medicare & Medicaid Services (Apr. 2, 2020), https://www.cms.gov/files/document/4220-covid-19-long-term-care-facility-guidance.pdf (last visited July 5, 2020).

[6] James M. Berklan, Analysis: PPE Costs Increase over 1000% During COVID-19 Crisis, McKnight’s Long-Term Care News (April 9, 2020), https://www.mcknights.com/news/analysis-ppe-costs-increase-over-1000-during-covid-19-crisis/ (citing data from the Society for Healthcare Organization Procurement Professionals).

[7] Kevin B. O’Reilly, Physician practices are losing out in the scramble for PPE, American Medical Association (Jul. 2, 2020), https://www.ama-assn.org/delivering-care/public-health/physician-practices-are-losing-out-scramble-ppe.

[8] COVID-19 Coding and Interim Guidance: PPE, American Dental Association (June 30, 2020), https://success.ada.org/~/media/CPS/Files/COVID/PPE_Coding_Billing_Guidance.pdf (last accessed July 5, 2020).

[9] Id. at 2.

[10] Id. at 2-3.

[11] Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Pub L. No. 116-136, 134 Stat. 281 (2020). 

[12] See, e.g. id. at §§ 1101-1114.

[13] Id. at Title III.

[14] Id. at § 3102 (citing the Public Service Health Act at 42 U.S.C. § 247d–6b).

[15]Id. at § 3710.

[16] Fact Sheet; Expansion of the Accelerated and Advance Payments Program for Providers and Supplies During Covid-19 Emergency, Centers for Medicare & Medicaid Services, https://www.cms.gov/files/document/accelerated-and-advanced-payments-fact-sheet.pdf (last visited July 5, 2020).

[17] CARES Act, supra note 11, at Title VIII.

[18] Id.

[19] Small Business Personal Protective Equipment Tax Credit Act of 2020, H.R. 7216, 116th Cong. (2020).

[20] Id.

[21] The White House, Memorandum on Allocating Certain Scarce or Threatened Health and Medical Resources to Domestic Use (April 3, 2020), https://www.whitehouse.gov/presidential-actions/memorandum-allocating-certain-scarce-threatened-health-medical-resources-domestic-use/.

[22] For example, FEMA recently provided the American Dental Association with 350,000 KN95 masks from the national stockpile and may send up to 1.5 million more masks. See Jennifer Garvin. ADA receives masks from national stockpile, ADANews (June 5, 2020), https://www.ada.org/en/publications/ada-news/2020-archive/june/ada-receives-masks-from-national-stockpile.

[23] HHS to Procure N95 Respirators to Support Healthcare Workers in COVID-19 Outbreaks, U.S. Department of Health and Human Services (Mar. 4, 2020), https://www.hhs.gov/about/news/2020/03/04/hhs-to-procure-n95-respirators-to-support-healthcare-workers-in-covid-19-outbreaks.html (last visited July 5, 2020).

[24] AMA Letters: Take immediate steps to address PPE Shortage, American Medical Association (June 30, 2020), https://www.ama-assn.org/press-center/press-releases/ama-letters-take-immediate-steps-address-ppe-shortage.

[25] CARES Act, supra note 11, at §§ 3703-3704.

[26] Id. at § 3707.

[27] See e.g., Iveta Ramonaite, Dental Practices Add Surcharges for PPE, Dental Tribune (June 3, 2020), https://www.dental-tribune.com/news/dental-practices-add-surcharges-for-ppe/.

[28] See e.g., Amended Complaint for Trademark Counterfeiting, Trademark Infringement, Unfair Competition, Trademark Dilution, and False Advertising, 3M Co. v. KM Brothers Inc., No. 2:20-CV-05048 (C.D. Cal. June 8, 2020). “3M brings this lawsuit to protect consumers from being deceived, prevent healthcare providers and procurement officers from wasting their valuable time interacting with illegitimate offers for critical health supplies.” Id. at ¶ 18.

[29] See generally id.

[30] AAPD, APPD Foundation and Henry Schein provide masks to AAPD members, Dental Tribune (June 29, 2020), https://us.dental-tribune.com/news/aapd-aapd-foundation-and-henry-schein-provide-masks-to-aapd-members/.

[31] These efforts may include increased manufacturing of PPE, insurance reimbursements, governmental fiscal policies, and measures to conserve and re-use sanitized PPE when indicated. The CDC and FEMA have issued guidelines urging health care facilities to re-use PPE when it can be safely sanitized and still effective due to the shortage. See e.g., Surgical Mask and Gown Conservation Strategies – Letter to Health Care Providers, U.S. Food and Drug Administration (April 27, 2020), https://www.fda.gov/medical-devices/letters-health-care-providers/surgical-mask-and-gown-conservation-strategies-letter-health-care-providers (last visited July 5, 2020); see also
Coronavirus (COVID-19) Pandemic: Personal Protective Equipment Preservation Best Practices, FEMA Fact Sheet, https://files.asprtracie.hhs.gov/documents/fema-fact-sheet-ppe-preservation-best-practices-update---14-july-2020.pdf (last visited July 5, 2020).

[32] The author would also like to thank Pat Meyers, esq., for providing insight to the author from his perspective as the Constrained Medical Supply Leader of the State of Colorado COVID-19 Response Team.