Policy Playbook: Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

Author: Summer Chavez, DO, MPH, MPM (Health Policy Fellow, Georgetown University/Medstar) // Reviewed by: Alex Koyfman, MD (@EMHighAK) and Brit Long, MD (@long_brit)

The Policy Playbook series from Dr. Summer Chavez is back! This post looks at the CARES Act.

As of April 13, 2020 there have been more than 550,000 cases of coronavirus disease (COVID-19) and nearly 22,000 deaths in the United States.¹ COVID-19 is unparalleled in terms of its disruption to daily life, economic impact, and enormous strain on the healthcare system. In response, the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748), also referred to as the CARES Act, was signed into law on March 27, 2020.² The CARES Act includes provisions for unemployment benefits and relief for small businesses amongst others changes, but importantly includes language that directly affects the healthcare industry. This month’s post will highlight the most important aspects of the bill for practicing emergency medicine physicians.

Insurance Coverage Requirements

• Testing for SARS-CoV-2, the virus that causes COVID-19, will be covered under either a negotiated rate from a health care plan or a published cash price.
• Insurance plans must cover, without any cost-sharing, any “qualifying coronavirus preventive service” such as vaccine.² However, they must have an “A” or “B” rating from the United States Preventive Services Task Force (USPTF) or be a recommended immunization from Centers for Disease Control and Prevention (CDC).

Funding

• Public Health and Social Services Emergency Fund that includes $100 billion to reimburse hospitals responding to coronavirus. $17 billion is allocated for the Veterans Health Administration.
• Additional funding ($1.32 billion) for health centers to prevent, detect, diagnose, or treat COVID-19.
• Additional funding ($29 million annually fiscal years 2021-2025) for telehealth.
• Increase in funding to $79.5 million annually for fiscal years 2021-2025 for rural health services.
• For fiscal year 2020, allocates $150 billion for state, tribal, and local governments for the Coronavirus Relief Fund.
• Allocates $1 billion for purchasing of personal protective equipment (PPE) and other critical medical equipment.³
• Additional funding for the CDC, National Institutes of Health (NIH), and Centers for Medicare and Medicaid Services (CMS).
• $415 million towards vaccine development efforts.
• A comprehensive user-friendly listing of all funding can be found here: Kaiser Family Foundation.

Medicare Reimbursement

• From May 1, 2020 to December 31, 2020, Medicare programs will no longer have the 2% Medicare sequestration payment cut applied.
• Medicare patients diagnosed with COVID-19 and treated as an inpatient will have a 20% increase in the diagnosis-related group discharge code during the emergency period.

Miscellaneous

• Removes liability for healthcare providers working as volunteers.
• Defines “nurse managed health clinic”, demonstration projects for the nursing workforce, professional development programs for the nursing profession, evaluation on nurse loan repayment programs, specifies eligibility criteria for authorized clinical nurse specialist programs.
• Suspension of student loan payments for federal student loan borrowers. During this time, interest will not accrue. These monthly forgiveness payments will still count towards federal loan forgiveness programs.
• Expansion of telehealth for Medicare beneficiaries, federally qualified health centers, rural health clinics, home dialysis patients, and recertification for hospice.

Additional guidance from the Centers for Medicare & Medicaid Services based on Section 3201 of the CARES Act which amends Section 6001 of the Families First Coronavirus Response Act (FFCRA) has been released.⁴ It expands insurance coverage for mandated benefits without incurring cost-sharing or prior authorization.⁵ Plans required to comply under Section 6001 are group health plans, self-insured group plans, non-federal government plans, and individual and student health plans as well as certain grandfathered health plans.⁶ Excluded plans are those that are retiree-only or short-term plans.⁶

Essentially, under Section 3202 of the CARES Act, either the negotiated price will be the reimbursed rate, or the cash price listed on a public website if not negotiated prior.⁵ Diagnostic testing may be broadened to include influenza testing or other laboratory tests (i.e. screening for other respiratory illnesses) deemed necessary by the attending physician and must be covered by the insurance plan.⁵ Emergency departments, urgent care locations, office visits, and telehealth visits are included.⁵ Coverage begins March 18, 2020 and ends June 16, 2020 unless the Secretary of Health and Human Services changes the date.⁶

Significant gaps remain, such as coverage for treatment related to COVID-19. As of April 14, more than 16 million individuals have become unemployed because of coronavirus, highlighting the point that many individuals could lose their employer sponsored health insurance.⁸ The Kaiser Family Foundation estimates Medicare payment rates for a less severe hospitalization to be approximately $13,000 while a hospitalization requiring more than 4 ventilator days to cost approximately $40,000.⁷ It’s important to note that Medicare payments are typically half of what private insurers pay although these estimates include the 20% payment increase.⁷ With most conservative estimates, up to 2 million uninsured individuals will be hospitalized with COVID-19, potentially utilizing more than 40% of the $100 billion relief fund allocated for hospitals.⁷ Protections against surprise billing are also discussed for inclusion in future bills.⁷ The FFCRA and CARES Act are steps in the right direction, but more work is needed. Although there’s a great deal of uncertainty about the future, continue to stay informed and stay involved.

References

1. CDC. Coronavirus Disease 2019 (COVID-19) in the U.S.: Cases in U.S. Centers for Disease Control and Prevention. https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html. Published April 13, 2020. Accessed April 14, 2020.
2. Courtney J. H.R.748 – 116th Congress (2019-2020): CARES Act. https://www.congress.gov/bill/116th-congress/house-bill/748. Published March 27, 2020. Accessed April 14, 2020.
3. Moss K, Wexler A, Dawson L, et al. The Coronavirus Aid, Relief, and Economic Security Act: Summary of Key Health Provisions. Kais Fam Found. April 2020. https://www.kff.org/global-health-policy/issue-brief/the-coronavirus-aid-relief-and-economic-security-act-summary-of-key-health-provisions/. Accessed April 15, 2020.
4. Centers for Medicare & Medicaid Services. Trump Administration Announces Expanded Coverage for Essential Diagnostic Services Amid COVID-19 Public Health Emergency | CMS. Centers for Medicare & Medicaid Services. https://www.cms.gov/newsroom/press-releases/trump-administration-announces-expanded-coverage-essential-diagnostic-services-amid-covid-19-public. Published April 11, 2020. Accessed April 15, 2020.
5. Centers for Medicare & Medicaid Services. FAQs About Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 42. April 11, 20202. https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf. Accessed April 15, 2020.
6. Keith K. New Guidance To Implement COVID-19 Coverage Requirements And More | Health Affairs. Health Affairs. https://www.healthaffairs.org/do/10.1377/hblog20200413.78972/full/. Published April 13, 2020. Accessed April 15, 2020.
7. Schwartz K, Apr 07 ELP, 2020. Estimated Cost of Treating the Uninsured Hospitalized with COVID-19. Henry J Kais Fam Found. April 2020. https://www.kff.org/uninsured/issue-brief/estimated-cost-of-treating-the-uninsured-hospitalized-with-covid-19/. Accessed April 15, 2020.
8. Pollitz K, Apr 14 GCP, 2020. Changes in Income and Health Coverage Eligibility After Job Loss Due to COVID-19. Henry J Kais Fam Found. April 2020. https://www.kff.org/health-reform/issue-brief/changes-in-income-and-health-coverage-eligibility-after-job-loss-due-to-covid-19/. Accessed April 15, 2020.