December 30, 2020

While millions of Americans have been stuffing wrapping paper and ribbons in the trash or heading to the store to return or exchange unwanted gifts, the federal government has delivered one more present to the American healthcare industry.  This package comes in the form of the Consolidated Appropriations Act (CAA)—otherwise known as the COVID-19 relief bill—passed by Congress on December 21 and signed into law by President Trump on December 27.  It is a nearly 5,600-page document that covers a wide range of topics and will take some time to fully digest; but, based on multiple societal publications and other sources we have reviewed, we have taken note of a few key highlights found in the CAA that we believe will be of interest to our readers.  They are summarized below.

PRF Reporting Requirements

The CAA allows greater flexibility in the Provider Relief Fund (PRF) reporting guidelines, including allowing hospital systems to move targeted PRF distributions within their system and allowing providers to use any reasonable method to calculate lost revenue.  The CAA also provides additional funding for the PRF, though such funding is considered by some to be somewhat modest.

Cuts Reversed or Postponed

The legislation eliminated cuts to the Medicaid disproportionate share hospital (DSH) program over the next three years.  In addition, the bill suspends the Medicare sequestration cuts of 2 percent, originally scheduled to go into effect on January 1, 2021, for an additional three months—meaning, those cuts won’t become effective until April 1, 2021.

New Round of Loans

The massive bill signed by President Trump also authorizes a new round of Paycheck Protection Program (PPP) loans.  While we have yet to determine all the details pertaining to this second round of PPP, it will certainly come as good news to those providers who need additional financial help during this uncertain time.

Surprise Medical Bills

We finally have national legislation addressing the issue of so-called “surprise medical bills,” which occurs when a patient in an in-network facility with an in-network surgeon is additionally treated by a non-participating provider, such as an anesthesiologist.  Since these providers do not participate with the patient’s insurance plan, they are able to charge their full rate to the patient.  When the beneficiary receives their bill from such providers, there is often a reaction of surprise, shock and downright dismay.  All that is ended with the passage of the CAA, which contains a section known as the “The No Surprises Act” (NSA).  According to GovTrack, its key stipulations are as follows:

• Insurers offering plans that cover emergency services are required to bill plan holders no more than the median in-network rate for a particular emergency service, even if the service provider is out of network.
• Insurers are prohibited from billing plan holders more than the median in-network rate for nonemergency services provided by out-of-network providers at in-network facilities.
• Out-of-network providers may not bill plan holders for the difference between the in-network and out-of-network rates for emergency services.
• The bill further prohibits out-of-network providers from billing plan holders for the difference in rates for nonemergency services provided at an in-network facility unless the provider complies with specified notice and consent requirements.
• Even when complying with these requirements, an out-of-network provider may not charge plan holders for the difference in rates for such nonemergency services if the provider is based at the in-network facility and is the only provider available to deliver the particular treatment or service at the facility.
• The Department of Health and Human Services (HHS) must provide grants to states to establish or maintain All Payer Claims Databases, which publish claims and payment information from insurers.
• Insurers will be required to publish provider directories, while the Government Accountability Office and the Department of Labor must report on certain issues related to the commercial health care market.

Reacting to the passage of the NSA, American Hospital Association (AHA) President Rick Pollack stated the following:

The hospital and health system field strongly supports protecting patients from surprise medical bills. We are pleased that Congress rejected approaches that would impose arbitrary rates on providers, which could have significant consequences far beyond the scope of surprise medical bills and impact access to hospital care. We also applaud Congress for rejecting attempts to base rates on public payers, including Medicare and Medicaid, which historically pay far less than the cost of delivering care.

Rural Hospitals

The CAA incorporates Senator Chuck Grassley’s Rural Emergency Hospital (REH) legislation, long supported by the AHA, which will allow rural hospitals to provide emergency and observation services without the provision of inpatient services.  According to the AHA, the package also “lifts the cap on the number of Medicare-funded residency slots, which will expand training opportunities and help address health professional shortages, including in rural communities.”

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There will undoubtedly be more details emerging from the CAA in coming weeks, and we will bring you any relevant details in future alerts.  Until then, please feel free to contact us should you have questions about the CAA or are seeking solutions to a business need.  You can reach us at info@miramedgs.com.