Section 1135 Waivers Now Available, but Some Waivers May Require Approval

On March 13, 2020, President Donald Trump declared a national emergency under the National Emergencies Act and made an emergency determination under the Stafford Act. This announcement follows the January 31, 2020, declaration of a public health emergency under the Public Health Service Act by the Secretary of the US Department of Health and Human Services (HHS). These actions opened the door for the authorization of waivers of certain Medicare, Medicaid and Children’s Health Insurance Program (CHIP) requirements as provided by Section 1135 of the Social Security Act (collectively, Section 1135 waivers). Shortly after the presidential declaration on March 13, the Centers for Medicare and Medicaid Services (CMS) announced a set of waivers specific to the COVID-19 pandemic (COVID-19 waivers).

As of March 16, 2020, HHS and the Centers for Medicare and Medicaid Services (CMS) have released the full text of the Section 1135 waivers, as well as guidance documents addressing implementation of some, but not all, of the Section 1135 waiver provisions. [See here, here and here for reference of waivers released to date]. HHS will implement the Section 1135 waivers through a series of releases from different divisions within the agency, creating an ongoing need for providers to monitor the process for requesting or operating under the available Section 1135 waivers. Although the process for using the Section 1135 waivers is evolving, CMS has made clear that for all services being provided under the Section 1135 waiver authority, providers must include claim-level identifiers on claims to Medicare for payment of the services.

Background

Section 1135 waivers provide a temporary relaxation of certain—but not all—healthcare regulatory requirements in the event of a declared disaster or emergency. In the past, the waivers have been issued for natural disasters and pandemics, such as Hurricane Katrina and H1N1 influenza, and focused on specific concerns related to those events and their impact on the healthcare system and provision of care. Certain of the COVID-19 waivers applicable to providers and services governed by Medicare payment laws are styled as “blanket” waivers, applicable nationally to a broad group of providers, reflecting the nationwide effects of the COVID-19 crisis. The process for using or requesting other COVID-19 waivers, such as those related to the Emergency Treatment and Labor Act (EMTALA), HIPAA and the Stark Law, remain less clear and will likely be subject to future HHS guidance. In addition, the COVID-19 waivers applicable to providers and services governed by Medicaid laws require states to individually apply for relief.

Case-by-Case Versus Blanket Waiver or Modification

CMS may implement Section 1135 waivers in several ways, although all require that CMS determine that a provider has been affected by the disaster or emergency that prompted the issuance of the waivers. CMS has the option to issue Section 1135 waivers that require providers to request and receive approval for relief on a case-by-case basis, or CMS can implement “blanket” waivers. Blanket waivers may be issued when CMS has determined that all similarly situated providers in an identified emergency area need such a waiver or modification. Often, as with natural disasters, the “emergency area” is limited. In other cases, such as pandemics, the emergency area may be much more expansive.

CMS considers several factors when determining whether to provide a specific or blanket waiver or modification, including the scope and severity of the emergency, the expected duration, feedback from the state survey agency and state and federal emergency response officials, and supporting data gathered by state provider associations.

Any waivers or modifications issued by CMS pertain only to federal requirements, and providers must ensure that any steps they take in accordance with the waivers also comport with state law.

“Blanket” COVID-19 Waivers

On March 13, 2020, subsequent to the president’s declaration of a national emergency, CMS released information on the “blanket” Section 1135 waivers that would be made available to providers in relation to the COVID-19 pandemic. The COVID-19 blanket waivers cover the following provisions of Medicare law and regulation:

• Skilled Nursing Facilities (SNFs): Waiver of the three-day prior hospitalization requirement for coverage of an SNF stay. Beneficiaries may be transferred because of the emergency without a prior qualifying hospital stay, and certain beneficiaries’ SNF coverage, once benefits are exhausted, may be renewed. CMS also waived the timeframe requirements for Minimum Data Set assessments and transmission.
• Critical Access Hospitals (CAHs): Waiver of the 25-bed limit requirement for CAHs and waiver of 96-hour limit on length of stays.
• Housing Acute Care Patients in Excluded Distinct Part Units: Waiver to allow acute care hospitals to house acute care inpatients in excluded distinct part units. The Inpatient Prospective Payment System hospital is instructed to annotate in the medical record that the patient is an acute care inpatient being housed in the excluded unit because of capacity issues related to the emergency.
• Durable Medical Equipment (DMEPOS): Authorization for contractors to waive the face-to-face visit, new physician’s order or medical necessity requirements for replacement of DMEPOS when the DMEPOS is lost, destroyed, irreparably damaged, or otherwise rendered unusable or unavailable as a result of the emergency.
• Care for Excluded Inpatient Psychiatric Unit Patients in the Acute Care Unit of a Hospital: Ability for acute care hospitals to relocate inpatients from excluded distinct part psychiatric units to acute care beds and units if necessary. The affected hospital is instructed to annotate the medical record to indicate the patient is a psychiatric inpatient being cared for in an acute care bed because of capacity or exigent circumstances related to the emergency.
• Care for Excluded Inpatient Rehabilitation Unit Patients in the Acute Care Unit of a Hospital: Ability for acute care hospitals to relocate inpatients from excluded distinct part rehabilitation units to acute care beds and units if necessary. The affected hospital is instructed annotate the medical record to indicate the patient is a rehabilitation inpatient being cared for in an acute care bed because of capacity or exigent circumstances related to the emergency.
• Supporting Care for Patients in Long-Term Care Acute Hospitals (LTCHs): Ability for LTCHs to exclude patient stays where an LTCH admits or discharges patients in order to meet the demands of the emergency from the 25-day average length of stay requirement otherwise applicable to LTCHs.
• Home Health Agencies (HHAs): Relief to HHAs regarding the timeframes related to OASIS Transmission and allowing Medicare Administrative Contractors to extend the auto-cancellation date of Requests for Anticipated Payment during emergencies (note that this is an extension of time and not a waiver of completion).
• Provider Locations: Temporary waiver of the requirement that out-of-state providers be licensed in the state where they provide services when they are licensed in another state. This temporary waiver applies to Medicare and Medicaid reimbursement requirements but not to CHIP or state licensing requirements.
• Provider Enrollment: Establishment of a toll-free hotline for non-certified Part B suppliers, physicians and non-physician practitioners to enroll and receive temporary Medicare billing privileges. Waiver of the application fee, finger-based criminal background checks and site visit typically part of the screening requirements. Postponement of all revalidation actions. Ability for licensed providers to render services outside of their state of enrollment, and expedited handling of any pending or new applications from providers.
• Medicare Appeals in Fee-for-Service, Medicare Advantage and Part D: Extension of time to file an appeal and waiver of timeliness for requests for additional information to adjudicate the appeal. Appeals will be processed even with incomplete Appointment of Representation forms, but communicating only to the beneficiary. Requests for appeal that do not meet the required elements will be processed using information that is available. All flexibilities available will be used in the appeal process as if good cause requirements are satisfied.
• Part B Prescription Refills: Medicare payment may be permitted for replacement prescription fills (for a quantity up to the amount originally dispensed) of covered Part B drugs in circumstances where dispensed medication has been lost or otherwise rendered unusable or unavailable due to the emergency.

“Case-by-Case” COVID-19 Waivers

Unlike the blanket waivers issued for Medicare laws described above, the COVID-19 waivers for EMTALA, HIPAA, Stark Law, Medicaid laws or other Medicare requirements subject to waiver under Section 1135, but not expressly designated as part of the blanket waivers, may require “case-by-case” requests and approvals. Providers interested in obtaining waivers of any of the following provisions should consider requesting a waiver, unless HHS opts to release future guidance providing for blanket waivers:

• EMTALA requirements related to direction or relocation of an individual to another location to receive medical screening pursuant to a state emergency preparedness plan, or for transfer of an individual who has not been stabilized, if the transfer is necessitated by the circumstances of the declared public health emergency
• Stark Law provisions related to limitations on physician referrals, as determined by CMS to be appropriate
• Penalties and sanctions related to the provisions of the HIPAA privacy regulations that pertain to (1) the requirements to obtain a patient’s agreement to speak with family members or friends, or to honor a patient’s request to opt out of the facility directory; (2) the requirement to distribute a notice of privacy practices; and (3) the patient’s right to request privacy restrictions or confidential communications
  • Note that the HIPAA waivers are limited to hospitals in designated geographic areas that have hospital disaster protocols in operation and extend only for 72 hours from implementation of the hospital disaster protocol.
• Conditions of participation, certification requirements, program participation, pre-approval or similar requirements
• Payment for items and services furnished by out-of-network providers to individuals enrolled in Medicare Advantage plans.

As to Medicaid program requirements, CMS did not identify limitations on provisions that it will consider waiving within the scope of the provisions set forth in the Section 1135 waiver document itself, but did provide examples of provisions that may be requested for waiver:

• Waiving prior authorization requirements in fee-for-service programs
• Permitting providers located out-of-state or -territory to provide care to another state’s Medicaid enrollees affected by the emergency (referring to ability to receive payment)
• Temporarily suspending certain provider enrollment and revalidation requirements to increase access to care
• Temporarily waiving requirements that physicians and other healthcare professionals be licensed in the state in which they are providing services, as long as they have an equivalent licensure in another state
• Temporarily suspending requirements for certain pre-admission and annual screenings for nursing home residents.

Notice or Request for a Waiver to Apply

Although not explicitly required by the CMS materials released to date, providers who desire to operate under the blanket COVID-19 waivers for Medicare laws should notify the CMS Regional Office, their Medicare Administrative Contractor (MAC) and, if applicable, their state survey agency of their intent to do so. A list of CMS Regional Office contacts for the waiver process is provided at the end of this article. Notice may be sent via email or letter, and should include the following information:

• Provider name/type
• Full address and CCN
• Contact person
• Identification of the blanket COVID-19 waivers under which the provider will operate.

In addition to the above elements of notice, if applicable, providers should simultaneously request “case-by-case” waiver accommodations under EMTALA or relief from other waivable laws, if the relief could be granted under Section 1135 and is not presently included as part of the blanket COVID-19 waivers.

While notice is sufficient to take advantage of the blanket waivers, providers requesting case-by-case waivers must submit a request to the CMS Regional Office or, if applicable, the state survey agency. It is also advisable to send a copy of the request to the MAC. There is no required format for the request, but it should include the information listed above for the blanket waivers, as well as the justification for the waiver(s) being requested. States that wish to take advantage of the Section 1135 waivers for Medicaid and State CHIP laws must submit requests directly to Jackie Glaze, CMS Acting Director, Medicaid & CHIP Operations Group Center for Medicaid & CHIP Services, by email (Jackie.Glaze@cms.hhs.gov) or mail.

Should CMS issue specific waivers related to COVID-19 in the future, providers will need to specifically request their application. This article will be updated to reflect those requirements in the event this occurs.

Regardless of waiver type, providers should keep careful records of beneficiaries who receive services in order to ensure that proper payment is made.

Claim-Level Identifiers

In connection with the Section 1135 waivers, CMS requires that providers apply one or both of the following claim-level identifiers to services furnished under the Section 1135 waivers:

• Condition Code “DR” (disaster related) for institutional billing, i.e., claims submitted using the ASC X12 837 institutional claims format or paper Form CMS-1450
• Modifier “CR” (catastrophe/disaster related) for Part B billing, both institutional and non-institutional, i.e., claims submitted using the ASC X12 837 professional claim format or paper Form CMS-1500 or, for pharmacies, in the NCPDP format.

Duration of Waivers

Waivers typically terminate at the earlier of either the termination of the emergency period or 60 days from the date the waiver or modification is first published. The Secretary of HHS may extend the waiver by notice for additional periods of up to 60 days, up to the end of the emergency period. CMS has not yet provided guidance on how long it may extend COVID-19 waiver authority.

Key Takeaways

Section 1135 waivers provide a mechanism for HHS and CMS to accommodate the exigencies experienced by healthcare providers in the event of a disaster or other significant emergency. While other accommodations and flexibility may be exercised by CMS and state survey agencies around these events, Section 1135 permits granting a broad spectrum of potential relief.
In the case of the COVID-19 waivers, providers that want to take advantage of the opportunities for relief under the Medicare laws should send a notice or request, depending on the waiver required, to CMS (see email addresses below), their MAC and, if applicable, the state survey agency. States interested in seeking waivers under the Medicaid laws may do so through an email request to the Medicaid and CHIP Operations Group.
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ROATLHSQ@cms.hhs.gov (Atlanta RO): Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee

RODALDSC@cms.hhs.gov (Dallas RO): Arkansas, Louisiana, New Mexico, Oklahoma, Texas

ROPHIDSC@cms.hhs.gov (Northeast Consortium): Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, West Virginia, New York, New Jersey, Puerto Rico, Virgin Islands, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

ROCHISC@cms.hhs.gov (Midwest Consortium): Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin, Iowa, Kansas, Missouri, Nebraska

ROSFOSO@cms.hhs.gov (Western Consortium): Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming, Alaska, Idaho, Oregon, Washington, Arizona, California, Hawaii, Nevada, Pacific Territories