Takeaways From New CMS Interim Rule Requiring COVID-19 Vaccination for Healthcare Providers and Suppliers

November 5, 2021

Latest update in series:
End of an Era: White House Ends Many Federal COVID-19 Vaccine Requirements (May 3, 2023)
CMS Vaccine Mandate Enforcement Begins — Understanding the Three Deadlines (January 27, 2022)

Related webinar replays:
OSHA ETS Employee COVID-19 Vaccination and Testing Mandates New Requirements, Tips and Traps for Large Employers (November 10, 2021)
COVID-19 Employee Vaccine and Testing Mandates New Requirements for Large Employers, Federal Contractors and Healthcare Organizations (September 16, 2021)

As McGuireWoods noted in a Sept. 10, 2021, alert, in Sept. 20 and Sept. 23 FAQs, and in Sept. 27 and Oct. 18 alerts, President Biden’s “Path Out of the Pandemic” employee COVID-19 vaccination mandates have three main components — one of which applies to healthcare providers and suppliers.

On Nov. 4, 2021, the Centers for Medicare & Medicaid Services (CMS) released an interim final rule with comment period requiring 21 Medicare- and Medicaid-certified provider and supplier categories to have all staff vaccinated for COVID-19 by Jan. 4, 2022 (the Vaccination Rule). CMS issued the Vaccination Rule on the same day the Occupational Safety and Health Administration (OSHA) issued its Emergency Temporary Standard (ETS) requirement for large employers, discussed in a Nov. 4, 2021, McGuireWoods alert. Unlike the OSHA ETS requirement, the Vaccination Rule does not allow for testing in lieu of staff vaccination. Below are eight takeaways from CMS’ Vaccination Rule.

1. Which providers and suppliers are subject to the Vaccination Rule?

The Vaccination Rule applies only to providers and suppliers subject to Medicare and Medicaid Conditions of Participation (CoP), Conditions for Coverage (CfC), or Requirements for Participation (RFP). Importantly, the Vaccination Rule does not apply to other healthcare entities, such as physician offices, that are not subject to certification health and safety standards, although they may still be subject to other requirements as discussed below. The full list of applicable providers and suppliers is:

  1. Ambulatory surgical centers
  2. Hospices
  3. Psychiatric residential treatment facilities
  4. Programs of all-inclusive care for the elderly
  5. Hospitals (acute care hospitals, psychiatric hospitals, hospital swing beds, long-term care hospitals, children’s hospitals, transplant centers, cancer hospitals and rehabilitation hospitals/inpatient rehabilitation facilities)
  6. Long-term care (LTC) facilities, including skilled nursing facilities (SNFs) and nursing facilities (NFs), generally referred to as nursing homes
  7. Intermediate care facilities for individuals with intellectual disabilities
  8. Home health agencies
  9. Comprehensive outpatient rehabilitation facilities
  10. Critical access hospitals
  11. Clinics, rehabilitation agencies, and public health agencies as providers of outpatient physical therapy and speech-language pathology services
  12. Community mental health centers
  13. Home infusion therapy suppliers
  14. Rural health clinics/federally qualified health centers
  15. End-stage renal disease (ESRD) facilities

CMS did not include religious nonmedical healthcare institutions, organ procurement organizations or portable X-ray suppliers in the Vaccination Rule, despite these categories also having Medicare certification requirements. CMS noted, however, the latter two entity types would be indirectly regulated under the Vaccination Rule from service contracts with applicable providers and suppliers.

2. Are there different requirements for different setting of care?

Generally, no. The Vaccination Rule creates a uniform requirement for different settings by adding new regulatory requirements to the CoP, CfC or RFP applicable to each different setting — for all facility staff described below. Due to differences in staffing, not all provider and supplier categories refer to the same list of individuals (e.g., the LTC, SNF and NF requirements do not reference students, trainees and volunteers). Additionally, the Vaccination Rule revises the infection control requirements for LTCs, SNFs and NFs so that residents (or resident representatives acting on behalf of a resident) can accept or refuse the COVID-19 vaccine.

3. Which facility staff must be vaccinated?

The Vaccination Rule requires that all facility staff be fully vaccinated against COVID-19. Fully vaccinated means that it has been two weeks or more since the relevant staff member received two doses of Pfizer or Moderna or one dose of Johnson & Johnson, with staff deemed to meet this requirement if they have not yet completed the 14-day waiting period but have completed their shot series by the Phase 2 implementation date (described below).

The rule covers all current staff as well as any new staff, regardless of clinical responsibility or patient contact, including facility-employed staff and staff under contract or arrangement who provide any care, treatment or other services directly, on a regular basis, for the facility and/or its patients. This includes all facility employees; licensed practitioners; students, trainees and volunteers; and individuals who provide care, treatment, or other services for the facility and/or its patients, under contract or other arrangement. This also includes administrative and other staff of a healthcare facility who primarily provide services remotely, as they may occasionally encounter fellow staff who will enter the facility to provide patient care.

4. Are there exceptions to the vaccination requirements?

The Vaccination Rule does not require individuals to be vaccinated who exclusively provide services remotely, such as fully remote telehealth providers or individuals furnishing payroll services, if they do not have direct contact with patients, residents or other staff members. Similarly, the Vaccination Rule does not include vendors, volunteers and professionals who perform infrequent “one off” services and tasks for the facility.

The regulation also provides for limited exemptions to the Vaccination Rule based on applicable federal law, based on disability or medical condition contraindicating vaccines required by the Americans with Disabilities Act, or sincerely held religious beliefs, practice or observance required by Title VII of the Civil Rights Act of 1964. Facilities are required to develop a process or plan for permitting the latter disability and religious exemptions in alignment with federal law, including the tracking and secure documentation of information provided by staff who requested exemption, the facility’s decision on the request and any accommodations that are provided. Requests for exemptions based on an applicable federal law must be documented. For staff members who request a medical exemption from vaccination, supporting documentation from a licensed practitioner must be provided to the facility. Facilities may review Equal Employment Opportunity Commission guidance to develop their own policies and procedures to review such requests.

5. When do affected providers and suppliers need to comply with the Vaccination Rule?

CMS implements the Vaccination Rule in two phases. Phase 1, effective 30 days after publication (Dec. 5, 2021), requires all affected staff to receive the first dose of the primary series or a single dose COVID-19 vaccine, subject to certain exemptions. In Phase 1, affected providers and suppliers must establish a policy ensuring all eligible staff have received the first dose of a two-dose COVID-19 vaccine or a one-dose COVID-19 vaccine prior to providing any care, treatment or other services by Dec. 5, 2021.

Phase 2, effective 60 days after the publication date (Jan. 4, 2022), requires all affected staff to be fully vaccinated for COVID-19, except for staff granted exemptions from COVID-19 vaccination or staff for whom COVID-19 vaccination must be temporarily delayed, as recommended by the CDC, due to clinical precautions and considerations. CMS stated that, although individuals are not considered “fully vaccinated” until 14 days after the final dose, for purposes of compliance with the Phase 2 rule, staff who received the second dose by Jan. 4, 2022, will meet the vaccination requirement.

6. How will CMS enforce the Vaccination Rule?

CMS will issue interpretive guidelines with provider and supplier survey procedures following the Vaccination Rule. The survey procedures will include evaluations of provider and supplier records of staff vaccination statuses and qualifying exceptions, interviews with provider and supplier staff to verify vaccination status, and reviews of provider and supplier policies and procedures to confirm compliance with requirements of the Vaccination Rule.

The interpretive guidelines will also provide processes and penalties regarding providers and suppliers who do not comply with the Vaccination Rule. CMS indicated that providers and suppliers cited for noncompliance may be subject to penalties available under federal law, which could include civil money penalties, denial of payment for new admissions or termination of the entity’s provider agreement. In its discussion of policy alternatives considered, CMS noted that it already has and uses discretion in enforcement when inspectors identify violations, and that termination of an entity’s provider agreement is not typically an immediate consequence, as entities usually have an opportunity to correct deficiencies. During a Nov. 3, 2021, press briefing at the White House, senior administration officials stated that the goal is to bring healthcare providers into compliance and not to punish workers or healthcare facilities. However, CMS will not hesitate to use its full enforcement authority to protect the health and safety of patients.

7. For facilities not covered by the CMS rule, could other federal requirements apply?

Potentially. Facilities and providers not covered by the CMS rule may still be subject to vaccination rules set by OSHA or pertaining to federal contractors. On Nov. 4, 2021, OSHA issued the ETS requiring employees of large employers with at least 100 employees to get vaccinated or to test negative on a weekly basis. The ETS also requires large employers to provide employees with paid leave to get vaccinated and requires unvaccinated employees to wear a mask at work. More information on these requirements can be found in McGuireWoods’ Nov. 4, 2021, alert. Smaller employers may also face staff vaccine requirements if they are federal contractors or subcontractors as discussed in an Oct. 18, 2021, McGuireWoods alert.

8. Will there be a notice and comment period with respect to the Vaccination Rule?

Yes, but not before the Vaccination Rule takes effect. Typically, CMS’ regulations undergo a notice and comment period for stakeholders to respond to a proposed rule before CMS issues a final rule with the regulations. Federal law allows an agency to waive the proposed rulemaking procedures if the agency finds good cause that the procedures are impracticable, unnecessary or contrary to the public interest. CMS determined the Vaccination Rule would be impracticable and contrary to public interest to undertake normal notice and comment procedures after assessing COVID-19’s impact, the effectiveness of the COVID-19 vaccines, the potential danger to patients without a mandate and the vaccine uptake among healthcare professionals. CMS will accept comments for 60 days after the Vaccination Rule’s publication in the Federal Register.

McGuireWoods monitors this developing area of the law and may provide additional analysis of the Vaccination Rule requirements. Subscribe to firm client alerts for such updates. In addition, the firm’s labor and employment team will discuss the OSHA ETS mandates on Nov. 10, 2021. For questions about the Vaccination Rule, or if you need assistance developing or updating policies and materials for implementation, please contact the authors of this article, your McGuireWoods contact, or a member of the firm’s healthcare team or COVID-19 response team


OSHA ETS Employee COVID-19 Vaccination and Testing Mandate: New Requirements, Tips and Traps for Large Employers
November 10, 2021
1-2 p.m. (ET) | 12-1 p.m. (CT) | 10-11 a.m. (PT)
For registration and additional details, click here.