News & Insights

Newsletter

October 12, 2020

Health Headlines – October 12, 2020


CMS Announces 14-Week Timeline for Hospitals to Comply with Daily COVID-19 Reporting Requirements or Risk Termination from Medicare and Medicaid ProgramsOn October 6, 2020, CMS announced new enforcement measures to ensure hospitals report daily COVID-19 data, with the exception of psychiatric and rehabilitation hospitals that must report weekly, to the federal government during the COVID-19 public health emergency.  Any hospitals that are in non-compliance will receive a series of escalating notification and enforcement letters over the next 14 weeks that may lead to termination from the Medicare and Medicaid programs.  CMS also announced that it will be adding data fields for influenza to the reporting requirements, which will be optional for hospitals to report beginning October 19, 2020, but CMS expects to make influenza reporting mandatory within the coming weeks.

The new guidance was announced by the CMS Quality Safety & Oversight Group and follows the September 2, 2020 interim final rule, which made compliance with the daily reporting requirements a condition of participation in Medicare.  The new guidance states that hospitals that fail to report the specified data elements on a daily basis will receive the following notification and enforcement letters over the next 14 weeks:

  • Between October 7 and November 18, 2020, hospitals that do not meet the reporting requirements completely on a daily basis will receive an initial notification from CMS reminding the hospitals of the reporting requirements.  Three weeks after receiving this initial notification of noncompliance, those providers that continue to not submit the specific information daily and completely will receive a second reminder notification.
  • Providers that continually fail to meet the reporting requirements after the initial six-week period will receive the first in a series of enforcement notification letters.  This is the beginning of the enforcement action and providers will have one calendar week to demonstrate compliance.  Providers failing to meet the reporting requirements within one calendar week will receive a second enforcement letter, and then a third if the provider remains non-compliant the following week.  The third letter will inform the provider that it has one additional week to demonstrate compliance with the reporting requirements, otherwise the provider will receive a fourth and final enforcement letter.  The fourth letter will include a notice of termination of the Medicare provider agreement to become effective within 30 days of the date of the notification unless the provider demonstrates compliance with the daily reporting requirements during the 30-day period.
  • For any non-compliance identified after November 18, 2020, the series of enforcement letters will begin immediately, without any of the reminder notifications.  Providers that are terminated from Medicare for failure to comply with the regulatory reporting requirements will have a right to appeal.

CMS also announced on October 6, 2020 that influenza fields will be added to the online portal for optional daily reporting beginning October 19, 2020, and CMS expects to make these influenza fields mandatory for daily hospital reporting within the coming weeks.  The new fields will be added to the end of the existing templates, and the current templates will continue to work until states and hospitals adopt the new fields.

CMS uses the data that hospitals report daily during the COVID-19 public health emergency to make decisions regarding the allocation of supplies, treatments and other resources.  Hospitals’ daily reporting to CMS is the only mechanism used for the distribution calculations for Remdesivir and other treatments and supplies.  If a hospital does not have the ability to report on weekends or holidays, the data can be submitted on the next business day.

The CMS Quality & Safety Oversight memorandum that sets forth the new enforcement measures can be found here.  The interim final rule making daily reporting of COVID-19 data a condition of participation can be found here.  The updated FAQ on the new CMS enforcement measures can be found here.

Reporter, Ariana Fuller, Los Angeles, +1 213 443 4342, afuller@kslaw.com.

CMS Amends Medicare Loan Terms Allowing Providers More Time to Make Payments – During the COVID-19 pandemic, CMS has issued approximately $106 billion in loans to providers who were struggling with cash flows and financing in the early stages of the pandemic.  This month, the Continuing Appropriations Act, 2021 and Other Extensions Act were enacted, and CMS released new payment terms for the Accelerated and Advance Payment (AAP) Program loans issued during the pandemic.  Under the original loan terms, providers and suppliers were required to start making payments in August.  Now, providers and suppliers have one year after their accelerated or advanced payment loan issuance dates to start making repayments.

At the end of the year period, Medicare will automatically recover 25% of the Medicare payments for 11 months.  Then, providers will be required to pay 50% for the next 6 months.  After this 17-month repayment period, if providers are unable to repay the total amount of the loans then CMS will require repayment of any outstanding balance subject to a 4% interest rate. 

Since March 28, 2020, CMS has paid approximately $98 billion in accelerated payments to more than 22,000 Part A providers and approximately $8.5 billion in advance payments to over 28,000 Part B suppliers.  As of October 8, CMS will no longer accept applications for AAP Program loans.

Providers and suppliers that are experiencing extreme hardship can also request a debt installment payment plan called an Extended Repayment Schedule (ERS). The ERS permits suppliers and providers to repay their loans over a 3 to 5-year period.  Providers and suppliers can contact their MAC for more ERS information.  In addition, providers can use their Provider Relief funds to repay their Medicare loans.  For more information about the repayment terms, see the CMS Fact Sheet and FAQs.

Reporter, Taylor Whitten, Sacramento, +1 916 321 4815, twhitten@kslaw.com.

U.S. Supreme Court Declines to Review False Claims Act Materiality Standard – On October 5, 2020, the U.S. Supreme Court declined to review a case questioning the materiality standard for Medicare fraud cases under the False Claims Act (FCA).  The case involved allegations that Lawrence Memorial Hospital in Kansas falsified records of patient arrival times and employee training to inflate its Medicare reimbursements.  The Tenth Circuit affirmed the district court’s opinion that the alleged false claims were not material to the government's decisions to pay the hospital.

Under the Supreme Court’s 2016 ruling in Universal Health Services, Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (2016), materiality for FCA purposes turns on whether the government would have withheld payment to a contractor had it known about alleged the noncompliance with Medicare requirements.  The Tenth Circuit rejected the petitioner’s position that materiality should be based on whether a “reasonable person” would consider the alleged noncompliance material.  Instead, the Tenth Circuit held the petitioner failed to show the hospital’s alleged inaccuracies in patient arrival time affected the “essence of the bargain” between the government and hospital.  Further, the alleged failure to comply with FCA-related training requirements were “precisely the type of garden variety compliance issues that the demanding materiality standards of the FCA are meant to forestall.”

The case is United States ex rel. Janssen v. Lawrence Mem’l Hosp., U.S., No. 20-286 (petition denied Oct. 5, 2020).  The Tenth Circuit’s opinion is available here.  The Supreme Court’s list of cert denials from October 5, 2020 is available here.

Reporter, Nicholas Kump, Sacramento, +1 916 321 4817, nkump@kslaw.com.

ALSO IN THE NEWS

 U.S. Department of Health and Human Services Renews Determination of Public Health Emergency – On October 2, Alex Azar II, the Secretary of Health and Human Services (the Department), announced the renewal of the Department’s previous determination that a public health emergency exists and has existed since January 27, 2020 as a result of the continued consequences of COVID-19.  The renewal is effective October 23, 2020.  The announcement is available here.

CMS Orders Uncertified Labs to Stop COVID-19 Testing – On October 9, CMS issued a press release stating that, since August 12, 2020, it has sent 171 cease and desist letters to facilities that lacked proper Clinical Laboratory Improvement Amendments of 1988 (CLIA) certifications.  Every facility that conducts COVID-19 testing is considered a “laboratory” and must be certified under CLIA.  The cease and desist letters ordered uncertified labs to stop testing for COVID-19 immediately to safeguard the integrity of testing and protect patients from potential endangerment if provided inaccurate or unreliable results.  The press release is available here.

King & Spalding Webinar:  What You Need to Know About CMS’s Latest Rulemakings Affecting Hospital Medicare Reimbursement, Including IPPS, OPPS and the Part C Proposed Rule

On Tuesday, October 13, from 1:00 p.m. – 2:15 p.m. ET, King & Spalding will host a webinar to discuss the highlights of the IPPS Final Rule for FY 2021, the OPPS Proposed Rule for CY 2021, and CMS’s Proposed Rule to count Part C Days in the Medicare Fraction for cost reporting periods preceding October 1, 2013.  The discussion will include:

  • CMS’s new requirement that hospitals report their median payer-specific negotiated charges for Medicare Advantage organizations, and how CMS will use this data to set MS-DRG relative weights starting in FY 2024;
  • New requirements for claiming reimbursement for bad debt from Medicare, which of those requirements will apply retroactively, and which proposals were dropped from the Final Rule;
  • CMS’s proposal to include Part C Days in the calculation of the SSI fraction for cost reporting periods preceding October 1, 2013; and
  • Various highlights from the OPPS proposed rule for CY 2021, including CMS’s proposal to eliminate the inpatient-only list.

To register for the webinar, please click here.