What the End of the COVID-19 PHE Means for Healthcare Providers

May 11, 2023 - The COVID-19 public health emergency (PHE) has officially ended, and with it, so have policies that helped healthcare providers navigate challenging circumstances, including provider relief funds and workforce flexibilities.

During the COVID-19 pandemic, the federal government introduced legislation that impacted providers, payers, and patients. Some of these legislations were tied to the PHE declaration, meaning that certain policies have ended as of May 11, 2023, a report from Ernst & Young (EY) detailed.

Hospitals and healthcare providers experienced operational and financial challenges during the pandemic. Provider relief funding, increased payment policies, and workforce flexibilities helped minimize some of these obstacles.

The Provider Relief Fund allocated $178 billion for providers, while the American Rescue Plan dedicated $8.5 billion for rural hospitals and providers. Nearly all of these funds have been distributed. Additionally, the Paycheck Protection Program offered almost $100 billion to providers.

CMS expanded the COVID-19 Accelerated and Advance Payments (CAAP) Program but stopped accepting applications for payments related to the COVID-19 PHE in October 2020. The agency has started to recoup payments despite pushback from the industry.

Providers also received higher Medicare payments during the PHE.

Medicare increased all inpatient reimbursement for COVID-19 patients by 20 percent through April 14, 2022, and increased reimbursement for COVID-19 vaccine administration. The payer also allowed eligible providers in the inpatient setting to receive additional payments for certain COVID-19 treatments through the New COVID-19 Treatment Add-on Payment (NCTAP) policy.

CMS extended the NCTAP policy through the end of the year in which the PHE expires, while the 20 percent add-on payment has ended with the PHE.

In addition to losing PHE-related reimbursement bumps, providers are facing payment cuts of -4.08 percent in 2023 after accounting for the 2 percent Medicare sequestration and the conversion factor reduction included in the Medicare Physician Fee Schedule.

CMS implemented flexibilities and measure suppression policies to reduce provider reporting burdens during the PHE. Providers can still use the Extreme and Uncontrollable Circumstances policy to request reweighting of one or more Merit-based Incentive Payment System (MIPS) performance categories for the 2023 performance year.

Meanwhile, most measure suppressions will likely expire for the 2023 performance year, leaving MIPS participants subject to all quality program requirements in 2024.

The healthcare industry faced significant staffing shortages in all sectors during the pandemic. CMS issued blanket waivers and flexibilities allowing providers to care for both COVID-19 and non-COVID-19 patients. The flexibilities enabled advanced practice providers, such as physician assistants (PAs) and nurse practitioners (NPs), to operate at the top of their licenses and forgo certain training requirements.

Additionally, CMS waived requirements that Medicare patients be under the care of a physician, requirements that certified registered nurse anesthetists be supervised by a physician, and removed the 50 percent requirement for rural health clinics to have an NP, PA, or certified nurse-midwife available to deliver patient care.

Providers continue to face workforce shortages but must learn to adapt without these flexibilities, as most of them have expired with the PHE.

CMS also waived the three-day prior hospitalization requirement for skilled nursing facility (SNF) stays, which has also ended with the PHE expiration.

Other sectors of the healthcare industry will face challenges due to the PHE ending as well, the report highlighted. For example, several telehealth policies have ended; Medicaid redeterminations have resumed; and insurance coverage of COVID-19 testing, treatment, and vaccines has shifted.