UPDATE: Providers see another wave of COVID-19-related deregulation from HHS

Crystal Yednak Senior Manager, Health Research Institute, PwC US May 07, 2020

A second rush of deregulatory actions by HHS has contributed to the department’s efforts to make telehealth more accessible to Medicare beneficiaries, give hospitals more flexibility to expand into alternate facilities, loosen licensing and reporting requirements, and widen the pool of providers who can participate in the pandemic emergency response effort.

In addition to blanket waivers, HHS has approved Section 1135 waivers for all states as of May 7 to give them more freedom to respond to the pandemic through the Medicaid program. The flood of guidelines, fact sheets and waivers has quickly altered the regulatory landscape for US healthcare, at least temporarily, through the duration of the public health emergency.

HRI has highlighted some key actions taken by HHS in the past few months in response to the pandemic, including its most recent moves:


  • Telehealth reimbursement has been increased and covered services expanded. To keep vulnerable populations protected from virus exposure, CMS is reimbursing providers the same amount for a telehealth visit as it does for an in-person visit for Medicare beneficiaries, covering 80 additional services through telehealth. Remote patient monitoring is allowed for both COVID-19 patients and those with chronic conditions.

  • More types of practitioners can deliver telehealth services to beneficiaries, including physical therapists, occupational therapists and speech language pathologists.

  • More tools are allowed. HHS has said it would use its enforcement discretion to not penalize providers for HIPAA violations for using “widely available communications apps, such as FaceTime or Skype, when used in good faith for any telehealth treatment or diagnostic purpose.” Telehealth services can be provided to beneficiaries who have only a regular phone and no ability to connect virtually.

  • More virtual check-ins are permitted. CMS is allowing providers to conduct virtual check-ins with new as well as established patients.

  • Hospitals may bill as the originating site when practitioners based in the hospital provide telehealth to Medicare patients who are registered as “hospital outpatients, including when the patient is located at home,” according to CMS.

Surge capacity: Where patients can go

  • Hospitals can use other facilities but receive the same payments. According to CMS, hospitals can transfer patients to “ambulatory surgery centers, inpatient rehabilitation hospitals, hotels, and dormitories, while still receiving hospital payments under Medicare.” A CMS blanket waiver also permits non-hospital buildings to be used for patient care and quarantine sites, and for hospitals to screen patients off-site.

  • Ambulatory surgery centers can “contract with local healthcare systems to provide hospital services, or they can enroll and bill as hospitals during the emergency declaration,” according to CMS.

  • Doctor-owned hospitals can increase their number of beds.

  • Dialysis facilities can create special purpose facilities to care only for dialysis patients with COVID-19, as an added measure to protect vulnerable populations, according to CMS guidance.

  • Teaching hospitals can increase the number of temporary beds without worrying about reduced payments for indirect medical education.

  • Outpatient hospital care provided in temporary facilities such as tents, converted hotels or homes can be reimbursed. Some provider-based hospital outpatient departments that move off-campus can temporarily be paid under the Outpatient Prospective Payment System instead of under the Physician Fee Schedule.


  • Special testing sites are allowed. CMS guidelines allow healthcare systems, hospitals and communities to set up testing and screening sites exclusively for COVID-19. Also, HHS has said it will use its enforcement discretion to not penalize covered entities such as healthcare systems and large retail pharmacy chains, and their business associates, for violations of HIPAA rules if they are acting in good faith by providing services through drive-thru and mobile COVID-19 testing sites.

  • Licensed pharmacists can order and administer COVID-19 tests (including serology tests) that have been authorized by the FDA, according to new guidance.

  • In-home tests are covered. Medicare will pay laboratory technicians to travel to a beneficiary’s home to collect a specimen for COVID-19 testing so the beneficiary does not have to go to a hospital and risk exposure. Under certain circumstances, according to CMS, some entities “will also temporarily be able to perform tests for COVID-19 on people at home and in other community-based settings.”

  • Any healthcare professional authorized to do so under state law, not just the treating physician, can order COVID-tests for Medicare beneficiaries.

  • Medicare and Medicaid will cover certain serology (antibody) tests and “laboratory processing of certain FDA-authorized tests that beneficiaries self-collect at home.”


  • Out-of-state practitioners who have a valid license do not also have to be licensed in the state where they are providing services to Medicare beneficiaries.

  • Provider enrollment eased. The change enables healthcare systems to tap local private practices and their staffs for temporary employment. CMS waivers also allow physicians whose privileges will expire to continue working, and for new physicians to start before going before a full review by a governing body.

  • Hospitals can provide benefits and support to their medical staffs, such as daily meals, laundry service for personal clothing or child care. (See HRI’s piece on the importance of caring for the caregiver.)

  • Hospitalized Medicare patients do not have to be under the care of a physician, according to a CMS waiver. This is to allow hospitals to deal with staffing challenges by maximizing the use of nurse practitioners and physician assistants.

  • Verbal order requirements have been relaxed to allow providers to focus on care. Providers in outbreak areas are also released from certain timelines on making copies of medical records available, and do not have to have written policies on visitation.

  • A Physician Self-Referral (Stark) Law waiver applies to physician financial relationships and referrals related to the COVID-19 outbreak to allow for healthcare systems to arrange for proper space and services in the response to the pandemic. Examples include a hospital renting space from an independent physician practice at below fair market value or no charge to make sure it has enough room for patients during a surge.

  • Nurse practitioners, clinical nurse specialists and physician assistants can now provide home health services without needing certification of a physician.

  • Teaching hospitals will not be penalized for moving medical residents to other locations to respond to COVID-19.

  • In critical access hospitals, a doctor does not have to be “physically present to provide medical direction, consultation, and supervision for the services provided.”

Rules/reporting: Paperwork requirements reduced

  • Quality Payment Program reporting deadlines eased. MIPS-eligible clinicians who did not submit data by April 30 will receive a neutral payment adjustment. Those in the hospital inpatient and outpatient quality reporting programs will not have to submit data for January through June.

  • Additional information requests suspended. CMS said it will continue to conduct oversight “but will suspend requesting additional information from providers, healthcare facilities, Medicare Advantage and Part D prescription drug plans, and states,” according to CMS.

  • Program audits to be rescheduled. CMS is also “reprioritizing scheduled program audits in Medicare Advantage, Part D plans, and Programs of All-Inclusive Care for the Elderly (PACE) organizations … [to] allow CMS and the organizations to focus on patient care,” according to CMS.

  • Part C and D Star Ratings calculations to be modified. CMS is “modifying the calculation of the 2021 and 2022 Part C and D Star Ratings to address the expected disruption to data collection and measure scores posed by the COVID-19 pandemic,” according to the agency.

  • Accountable care organizations (ACOs) get more predictability. CMS says ACOs will be treated equally no matter how they were affected by the pandemic. The annual application cycle will be skipped for 2021, and those ACOs set to end this year can extend for another year and maintain their current risk level.


  • Insurers with catastrophic plans will not face enforcement actions for providing coverage without imposing cost-sharing requirements for COVID-19-related services before an enrollee meets the deductible. 

  • COVID-19 cost sharing waived. In addition to waiving cost sharing for COVID-19 tests and treatments, Medicare Advantage and Part D plans can also remove prior authorization and prescription refill limits while allowing prescriptions by mail, according to guidance issued by CMS on flexibilities in an emergency.

HRI impact analysis

Providers that needed to suddenly reorient their facilities, staffs and supplies for the COVID-19 pandemic had been pressing for many of the temporary changes CMS has made. The relaxed requirements help them keep COVID-19 patients separate to contain the spread and to expand bed capacity. Staffing has been a concern for healthcare systems as they try to keep workers from being exposed while dealing with a lack of testing.

The measures by CMS will give some flexibility to expand the workforce by calling on healthcare workers from other areas that are not experiencing a surge, bringing back retired medical professionals and activating medical residents.

The efforts to expand telehealth will enable healthcare systems to keep vulnerable patients, such as the elderly and those with chronic conditions, from needlessly risking exposure to the virus by going into healthcare facilities for treatment.

The telehealth services can also keep COVID-19 patients who have mild symptoms in their homes to reduce the spread of the virus. A consumer survey conducted by HRI in April found that 5% of respondents said they or a family member had used telehealth for the first time during the pandemic.

While providers and patients adjust to the COVID-19 reality and become accustomed to expanded telehealth and more healthcare services delivered in the home, will parts of these changes take root in the healthcare landscape and be made permanent? That is a key question for the industry and regulators.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

Erin McCallister

Senior Manager, Health Research Institute, PwC US

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