News & Insights


October 26, 2020

Health Headlines – October 26, 2020

HHS Expands Eligibility for Provider Relief Fund and Amends Reporting Requirements – On October 22, 2020, HHS expanded the Provider Relief Fund Phase 3 General Distribution eligibility pool to include residential treatment facilities, chiropractors, and eye and vision providers that had not yet received any payments. The deadline to submit applications for the Phase 3 General Distribution is November 6, 2020.  Additionally, on October 22, 2020, HHS published a policy memo and amended guidance for reporting on Provider Relief Fund distributions.

Expanded Eligibility

For the Phase 3 General Distribution, HHS expanded the types of eligible providers across a broad category of practices regardless of whether they accept Medicare or Medicaid. These newly eligible providers include:

  • Behavioral Health Providers;
  • Allopathic & Osteopathic Physicians;
  • Dental Providers;
  • Assisted Living Facilities;
  • Chiropractors;
  • Nursing Service and Related Providers;
  • Hospice Providers;
  • Respiratory, Developmental, Rehabilitative and Restorative Service Providers;
  • Emergency Medical Service Providers;
  • Hospital Units;
  • Residential Treatment Facilities;
  • Laboratories;
  • Ambulatory Health Care Facilities;
  • Eye and Vision Services Providers;
  • Physician Assistants & Advanced Practice Nursing Providers;
  • Nursing & Custodial Care Facilities; and
  • Podiatric Medicine & Surgery Service Providers.

Eligible providers will receive a baseline payment of approximately 2% of annual revenue from patient care plus an add-on payment that considers changes in operating revenues and expenses from patient care, including expenses incurred related to coronavirus.  The HHS announcement is available here, and application information is available here.

Amended Reporting Requirements

On October 22, 2020, HHS published a policy memo explaining that it was amending its reporting requirements.  HHS’s initial instructions (published on September 19, 2020) limited the applicability of funds to an amount that would allow most providers to be no more profitable in 2020 than in 2019.  The previous instructions read:

PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to lost revenues, represented as a negative change in year-over-year net patient care operating income (i.e., patient care revenue less patient care related expenses for the Reporting Entity, defined below, that received funding), net of the healthcare related expenses attributable to coronavirus calculated under step 1. Recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare related sources. Recipients that reported negative net operating income from patient care in 2019 may apply PRF amounts to lost revenues up to a net zero gain/loss in 2020.

The policy memo explained that HHS was reversing its position on how to calculate lost revenue.  Instead of the net margin concept (described above), HHS was reverting back to a 2019 and 2020 revenue comparison.  The amended reporting requirements state:

PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to patient care lost revenues, net of the healthcare related expenses attributable to coronavirus calculated under step 1. Recipients may apply PRF payments toward lost revenue, up to the amount of the difference between their 2019 and 2020 actual patient care revenue. 

In sum, after reimbursing healthcare related expenses attributable to coronavirus that were unreimbursed by other sources, providers may use remaining Provider Relief Funds to cover any lost revenue, measured as a negative change in year-over-year actual revenue from patient care related sources.

The amended reporting requirements are available here, and the policy memo is available here

Reporter, Ahsin Azim, Washington, D.C., +1 202 626 9262,

CMS Approves Nebraska Medicaid Expansion Program with Community Engagement and Wellness Requirements – On October 20, 2020, CMS approved Nebraska’s Medicaid expansion program – named the “Heritage Health Adult,” or HHA – under Section 1115 of the Social Security Act, creating a new two-tiered system of Medicaid benefits for the expansion population. The HHA offers enhanced, demonstration-only benefits on a voluntary basis intended to a subset of individuals in the adult group expansion population. The expansion program will begin on April 1, 2021 and comes on the heels of a 2018 initiative (Initiative 427) and statewide vote in favor of a Medicaid adult group expansion. CMS’s October 20, 2020 approval of Nebraska’s HHA program is effective until March 31, 2026, unless extended or amended.

In April 2021, a subset of Nebraska’s Medicaid expansion population will be able to enroll in an enhanced package, the “Prime” coverage that comes in exchange for meeting certain requirements, or to enroll in the “Basic” package (the approved Alternative Benefit Plan, or ABP). The more traditional “Basic” package is comprised of physical and behavioral healthcare services and prescription drugs that includes mandatory Medicaid benefits. The “Prime” package requires wellness and community engagement, work or education-related activities in exchange for the Medicaid benefits that are available under the Nebraska state plan as well as the following additional benefits that states are not required to include in benefit plans for the adult group expansion population: 

  • Vision services, including optometrist services and eyeglasses;
  • Adult dental services, including dentures; and
  • Over-the-counter medications.

Adults ages 19 to 20, or who are medically frail or pregnant, will receive the “Prime” coverage without satisfying the newly announced requirements and are not part of the demonstration program. Adults ages 21 to 64 who are not medically frail or pregnant and who have an income at or below 138% of the federal poverty level are eligible to voluntarily select the “Prime” coverage option and in exchange for satisfying wellness and community engagement, work or education-related activity requirements. Beneficiaries who choose not to elect the “Prime” coverage will not lose their Medicaid eligibility. 

Beginning in April 2021, enrollees who elect the “Prime” package in the demonstration program must complete wellness initiatives.  This includes attending annual wellness visits, maintaining their employer-sponsored coverage, completing risk assessments, and avoiding missing most scheduled appointments. Beginning in April 2022, to receive the additional “Prime” benefits, enrollees must “engage in sufficient qualifying community engagement activities.”  Specifically, the activities include education, work, or job-seeking requirements with a minimum hourly per month commitment of 80 hours. Enrollees will also be required to participate in community engagement activities unless they can meet one of several “good cause” exemptions for such engagement activities, which could include:

  • Individuals in substance use disorder or mental health treatment programs;
  • Individuals receiving unemployment compensation or are meeting requirements in the waiting period;
  • Members of a federally recognized tribe;
  • High school students (attending school at least half time);
  • Individuals aged 60 to 64;
  • Individuals in an area with a federal SNAP Able-Bodied Adults without Dependents (ABAWD) waiver grant;
  • Individuals who are victims of domestic violence in certain circumstances;
  • Parents, caretakers, guardians, or conservators of dependent children, elderly, or disabled relatives; or
  • Individuals in the SNAP Employment and Training program or otherwise meeting AWAWD requirements.

Such “Prime” beneficiaries will also be required to notify Nebraska’s Medicaid agency of any changes that will affect their eligibility for demonstration-only benefits.

Nebraska reports that its Medicaid expansion will enroll an additional 90,000 lives in its Medicaid program (which currently enrolls approximately 221,000 people). Nebraska anticipates that most benefits will be provided through its Medicaid managed care program (Heritage Health), with dental benefits flowing through MCNA. CMS announced that the community engagement activities are designed with enrollees’ overall wellness in mind to “help lift them from poverty and put them on a road to improved health and independence.” CMS noted in its approval letter that the COVID-19 pandemic could affect this community engagement requirement, but also noted that “recent research during the COVID-19 pandemic indicates that factors such as a lack of economic participation, social isolation, and other economic stressors have negative impacts on mental and physical health.”

Additional resources and information from Nebraska’s Department of Health and Human Services related to the “Basic” and “Prime” benefits are available here.  Nebraska’s HHA original concept paper is available here.  Because Medicaid-related work requirements have often faced legal challenges, King & Spalding will continue to monitor and report on the status of Nebraska’s new program.

Reporter, Lee T. Nutini, Chicago, + 1 312 764 6910,

CMS Delays Implementation of Radiation Oncology Payment Model for Six Months in Response to Industry Feedback – On October 21, 2020, CMS announced that it is pushing the implementation of its radiation oncology payment model (RO Model) back from January 1, 2021 to July 1, 2021 in response to industry concerns regarding the implementation timeframe.  The RO Model is an episode-based payment initiative.

The RO Model is intended to test whether bundled, prospective, site neutral, modality agnostic, episode-based payments to physician group practices, hospital outpatient departments, and freestanding radiation therapy centers for radiotherapy episodes of care reduces Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries.  The RO Model has a five-year model performance period. 

As previously reported, CMS released the final rule for this payment model in September 2020.  Multiple stakeholders had expressed concern over the timeframe for implementation after the final rule was released.  For example, the American Society for Radiation Oncology (ASTRO) responded to the final rule expressing that it viewed the January 1, 2021 implementation timeframe as “untenable for practices already enduring staff shortages and other challenges due to the COVID-19 pandemic.” 

Reporter, Isabella E. Wood, Atlanta, + 1 404 572 3527,

Also in the News

HHS Allows Certain Religious Leaders to Visit Patients in COVID-19 Positive Units – On October 20, 2020, HHS Office of Civil Rights (OCR) announced that religious leaders who have completed infection control training may see patients in COVID-19 units if they wear personal protective equipment and sign an acknowledgement of the risks prior to the visit.  This announcement was made in response to two religious discrimination complaints raised by patients.  OCR’s announcement is available here.