“Hospitals Without Walls” and Other Flexibilities for Hospitals During COVID-19

April 24, 2020

RELATED:  End of COVID-19 Emergency: Legal Implications for Healthcare Providers (May 1, 2023)

On March 31, 2020, the Centers for Medicare & Medicaid Services (CMS) issued an interim final rule with comment period (IFC). This alert is part of a series of alerts discussing the IFC provisions and comprehensive actions CMS is taking that are most important to healthcare providers.

In response to the extraordinary circumstances of the 2019 novel coronavirus (COVID-19) pandemic, on March 31, 2020, CMS issued an IFC with 30 immediate rule changes and temporary waivers to the current regulatory framework. Hospitals currently face enormous financial pressures due to cancellations of elective surgeries, coupled with the costs of procuring the equipment, supplies and space to treat COVID-19 patients. Recognizing the critical role hospitals play in the fight against COVID-19, CMS has waived many regulatory requirements to provide hospitals flexibility in where and how they treat patients, and CMS has loosened hospital documentation requirements in CMS’ ongoing efforts to let providers put “patients over paperwork.”

“Hospitals Without Walls”

Expansion of Under-Arrangements Coverage and Physical Environment Rules
In anticipation of a growing need for hospital bed capacity, CMS is allowing hospitals to use non-hospital spaces to treat hospital patients. In particular, CMS is allowing ambulatory surgery centers (ASCs) to contract with local hospitals and healthcare systems to provide surge capacity or to temporarily enroll in Medicare as hospitals during the pandemic. CMS’ waiver is relatively broad and allows any non-hospital space to be used for patient care and quarantine sites “provided that the location is approved by the state (ensuring that safety and comfort for patients and staff are sufficiently addressed) and so long as it is not inconsistent with a state’s emergency preparedness or pandemic plan.” Significantly, this change allows for hospitals to provide “routine” inpatient services — bed, board and nursing — under arrangements in a non-hospital space, which is typically prohibited by Medicare coverage rules. Hospitals may use this flexibility for all admissions during the public health emergency, which began March 1, 2020.

Off-Site Patient Screening
Generally, the Emergency Medical Treatment and Labor Act (EMTALA) requires hospitals that offer emergency services to provide a medical screening examination and to stabilize a patient’s emergency medical condition, or, in certain circumstances, to arrange for an appropriate transfer. During the public health emergency, CMS is waiving enforcement of EMTALA to allow hospitals “to screen patients at a location offsite from the hospital’s campus to prevent the spread of COVID-19, so long as it is not inconsistent with a state’s emergency preparedness or pandemic plan.” CMS has released a survey and certification memorandum with more details on EMTALA requirements for hospitals during the public health emergency.

As detailed in a prior McGuireWoods alert, CMS issued sweeping waivers that greatly broaden Medicare coverage rules for services provided via telemedicine. CMS extended those waivers to applicable telemedicine provisions in the hospital conditions of participation, which will provide hospitals more flexibility in treating patients outside their four walls while containing the spread of COVID-19. CMS stated that this will increase “access to necessary care for hospital and [critical access hospital] patients, including access to specialty care.”

Direct Supervision Requirements for Diagnostic Services
Hospital outpatient diagnostic services provided in the hospital or a hospital department are typically covered only if provided under “direct supervision,” which requires the physical presence of a physician (or in some cases, a non-physician practitioner) in the hospital department. CMS recognized that the current supervision requirements could present “additional exposure risks” to patients and would prevent a practitioner who may be self-isolating from supervising a procedure when the practitioner “could otherwise safely supervise from another location using telecommunications technology.” Therefore, CMS will allow direct supervision of hospital outpatient diagnostic services to include “virtual presence through audio/video real-time communications technology when use of such technology is indicated to reduce exposure risks for the beneficiary or health care provider.” CMS also adopted this revision to the coverage regulations for pulmonary rehabilitation, cardiac rehabilitation and intensive cardiac rehabilitation services.

Patients Over Paperwork

Verbal Orders
CMS is relaxing its requirement for ordering (or responsible) practitioners to authenticate a verbal order within 48 hours after the verbal order is given. While a practitioner may authenticate a verbal order more than 48 hours after the order is given, a read-back verification of the order is still required and such orders must be dated and timed. By relaxing the authentication requirement for verbal orders, CMS intends to give practitioners more time to provide care in the event of a surge in hospital patients.

Discharge Planning
CMS limited discharge planning for hospitals and critical access hospitals by waiving requirements for such hospitals to provide patients with quality measures and data on post-acute care providers as part of the discharge planning process. CMS recognized that, during the pandemic, hospitals might not be able to provide patients and their families with information on post-acute care providers, such as home health agencies, skilled nursing facilities, inpatient rehabilitation facilities and long-term care hospitals. Instead, hospitals should continue to focus on ensuring that hospitals discharge patients to the appropriate post-acute care provider with the necessary medical information and goals of care. Hospitals are still required to follow other discharge planning requirements, including a timely discharge evaluation, inclusion of the evaluation in the patient’s medical record, and discussion of the results of an evaluation with the patient or the patient’s representative.

Medical Records
In an effort to give healthcare practitioners more time to focus on patient care, CMS is waiving all standards for medical record services. While hospitals must have a medical record service responsible for the administration of medical records and maintain a medical record for every individual evaluated or treated in the hospital, CMS waived all of the specific medical record requirements related to the form, retention and content of medical records. Furthermore, CMS waived the requirement for hospitals to complete a medical record within 30 days following discharge or for a critical access hospital to complete all medical records promptly.

Utilization Review
CMS typically requires hospitals to have a utilization review plan that provides for the review of services furnished by the hospital and its medical staff to Medicare and Medicaid patients by a utilization review committee. The utilization review committee reviews the medical necessity of hospital admissions, duration of stays, and professional services furnished to Medicare and Medicaid patients. CMS is waiving this entire utilization review condition of participation, so long as such waiver is consistent with state and/or pandemic emergency plans.

Nursing Services
To give nurses more time to care for patients, CMS is waiving the requirement for nursing staff to develop and keep a current nursing plan for each patient. CMS is also waiving the requirement for hospitals to have policies and procedures establishing which outpatient departments are not required to have a registered nurse present. CMS expects the waiver of these nursing requirements to give hospitals the relief they need for an influx of inpatient services resulting from managing COVID-19 cases. The waivers apply to both hospitals and critical access hospitals, unless they are inconsistent with state and/or pandemic emergency plans.

Please contact the authors of this alert with any questions and for additional guidance on how other COVID-19 considerations may impact healthcare providers. McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial COVID-19-related business and legal issues.

Amber Walsh
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