The CARES Act and Its Impact on Healthcare Providers by Gloria D. Crawford

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The purpose of the CARES Act is to offer financial relief to businesses and families being impacted by the COVID-19 coronavirus crisis. The CARES Act focuses on solving the numerous problems caused by the virus such as unemployment benefits, offering stimulus payments to qualifying individuals, and keeping the American healthcare system functioning throughout the pandemic.

The Department of Health and Human Services is encouraging providers to utilize telehealth to treat patients with COVID-19 and other unrelated injuries. In response, the Act has relaxed additional telehealth requirements. For example, Medicare is no longer requiring that providers have a pre-existing relationship to treat patients using telehealth communications. The Act also allows physician assistants and nurse practitioners to receive reimbursement for providing home health services.

As the virus ravages through the population, providers are experiencing financial strain (among other stressors). The CARES Act puts more money into the hands of providers. Hospitals will receive advance Medicare payments while this is still a public health emergency. In addition to this, the Act reduces and delays payroll tax payments fifty percent (50%) for hospitals, health systems and other employers.  This is important, because hospitals can use this money to continue operating. The Act suspends the sequestration-mandated cuts on Medicare claims, which goes into effect on May 1 continuing through the end of the calendar year (December 31, 2020). This will increase payments to providers by approximately two percent (2%). In order to incentivize providers to treat patients in person, the Act establishes a twenty percent (20%) add-on payment to those providers treating patients with COVID-19. Providers that furnish DME (durable medical equipment) to rural areas will also see an increase in payments throughout the rest of the year.

Under the Act payers are required to cover testing performed by hospitals and labs. Additionally, there is $100 billion dollars allocated for hospital funding and operations. This amount is to offset the costs of: acquiring PPE and other critical supplies, the surge in capacity as hospitals try to make room for COVID-19 patients, and cancellation of elective procedures (ex. cosmetic surgery) as resources are shifted to the treatment of COVID-19 patients. Rural hospitals and federally qualified health centers can serve as telehealth sites and receive reimbursement for these services.

These are just a few of the many changes covered under the CARES Act. If your business is impacted by the CARES Act, contact our office so that one of our attorneys may assist you.

Post authored by Gloria D. Crawford