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Normal Kickback and Billing Rules Return When PHE Ends on May 11

by Glenn S. Demby | Feb 9, 2023 | Compliance-nir, Essential, National Lab Reporter

A look at the US end-of-emergency game plan and how it will impact lab compliance.

Two researchers in masks with gloves in a laboratory istock image — iStock, PeopleImages

They say that all bad things must come to an end. That includes the COVID-19 national emergency and public health emergency (PHE).^1,2 On January 30, 2023, the Biden administration notified the Rules Committee of the House of Representatives of its intention to end both emergencies on May 11 after providing one final but abridged extension.³ The notification comes as part of the administration’s effort to block the Republican House’s plan to end the emergencies right now. Here’s a look at the end-of-emergency game plan and how it will impact lab compliance.

The Final Renewal of the PHE

Declared by the Trump administration in 2020, the COVID-19 emergencies carried an original shelf life of 90 days but have been renewed every three months ever since, with the most recent renewal of the PHE occurring on January 11, 2023.⁴ The PHE is set to expire on April 11, while the national emergency is set to expire on March 1. Rather than the customary 90 days, the administration’s final renewal would extend the PHE by only 30 days. Both emergencies would come to an end on that same May 11 date. “This wind-down would align with the Administration’s previous commitments to give at least 60 days’ notice prior to termination of the PHE,” according to the notification sent to the House committee.³

But House Republicans don’t want to wait even that long. They’ve introduced a bill called the Pandemic Is Over Act (H.R. 382) and a resolution (H.J. Res. 7) that would end both emergencies immediately upon passage.^5,6 The administration opposes the idea, contending that an “abrupt end to the emergency declarations would create wide-ranging chaos and uncertainty throughout the health care system.”³

For one thing, the strategy would disrupt Congress’ plan to ensure “an orderly wind-down” of the special rules put in place during the PHE to provide extra funding to states to prevent disruptions in Medicaid coverage during the pandemic. A sudden end to the PHE would leave “tens of millions of vulnerable Americans” without health insurance coverage, the Biden notification warns. All of this would result in care and payment delays that would plunge hospitals, nursing homes, and other providers that have relied on the flexibilities provided by the emergency declarations into “chaos,” the notification adds.³

What Becomes of the Blanket Waivers and Regulatory Relief?

The “plunging into chaos” phrase is a reference to the significant and immediate compliance ramifications that the end of the PHE will have for labs and other providers. Of particular concern is the revocation of the blanket waivers issued by the U.S. Department of Health and Human Services under Section 1135 of the Social Security Act to avoid disruptions to lab testing and care during the PHE.⁷ The blanket waivers relaxed the normally strict requirements across a broad range of activity so that providers could focus on patients rather than compliance. When the PHE ends, so will the blanket waivers directly affecting COVID-19 testing labs.

Kickback Restrictions

A series of Section 1135 blanket waivers temporarily relaxed Anti-Kickback Statute (AKS) and Stark Law restrictions allowing labs to enter into otherwise problematic arrangements for the purpose of providing COVID-19 diagnosis and treatment. Revocation of the waivers and restoration of the normal AKS and Stark rules may make these arrangements unviable. Specifically, labs and their compliance officers will have to step back and take a hard look at COVID-19 testing arrangements involving:

Participation in Accountable Care Organizations (ACOs);

Remuneration for services or items at above or below fair market value;

Free or below fair market value rent for leased office space or equipment, such as giving physicians free telehealth communications equipment;

Hospital medical staff incidental benefits above the usual limits;

Nonmonetary compensation above the usual limits;

Loans at below fair market value interest or at terms not offered to non-referral sources; and/or

Referral by a physician in a group practice for medically necessary designated health services furnished by the group practice in a location that doesn’t qualify as a “same building” or “centralized building.”

Medicare Coverage & Billing Rules

End of the PHE will also end Section 1135 blanket waivers designed to expand access to COVID-19 testing by loosening Medicare coverage and billing rules, including:

Waiving the requirement of an order from a treating physician or other practitioner and accepting orders from any healthcare professional authorized to order tests under state law not only for COVID-19 tests but other tests required as part of coronavirus testing;

Waiving the requirement of a written practitioner’s order for purposes of Medicare reimbursement for the COVID-19 test;

Allowing pharmacists to work with practitioners to evaluate beneficiaries, collect samples, and perform COVID-19 tests to clear the way for drive-through testing;

Paying hospitals and practitioners to evaluate beneficiaries and collect lab samples for SARS-CoV-2 tests, and providing separate payment when it’s the only service the patient receives; and

Paying for serology and over-the-counter tests.

Labs that have relied on these blanket waivers will have to revisit their billing practices once the normal coverage requirements are back in place. That includes waivers affecting the 60-day rule allowing a physician or physical therapist to use the same substitute for the entire time they’re unavailable to provide services during the COVID-19 emergency plus an extra period of 60 days after the PHE expires. In addition, Medicare payment appeals will become more difficult once the blanket waivers expire.

Telehealth Coverage Rules

The one area where the transition from PHE to non-PHE will be less difficult is regarding telehealth. The reason for that is that Congress has already acted to ensure that the flexibilities to Medicare coverage rules afforded by the blanket waivers continue at least temporarily after the PHE ends. Thus, the Consolidated Appropriations Act, 2023 (H.R. 2617) extends the removal of Medicare geographic requirements and expansion of the list of sites and practitioners eligible to provide telehealth services until December 31, 2024.⁸ Meanwhile, Congress is expected to pass legislation to permanently reform the coverage rules to expand Medicare beneficiaries’ access to telehealth.

Takeaway

COVID-19 testing labs should be on notice that come May 11, the PHE will end and the normal kickback and Medicare coverage rules will apply once again. At least that should be the operating assumption as of now. In theory, HHS can opt to keep any or all of the blanket waivers in place or even make them permanent after the PHE ends. But that appears to be unlikely. Thus, assume that whatever grace period there will be has already started and will unlikely extend beyond May 11.