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Healthcare

Three Healthcare Business Implications for the End of the Public Health Emergency

Legal experts on what is changing and what isn't when PHE ends later this spring.
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Building with large H sign for hospital iStock

Earlier this year, the Biden administration announced that if current COVID-19 trends hold, it would not be extending the public health emergency past May 2023. Announced in March 2020, the public health emergency has significantly impacted how healthcare organizations have operated, billed for reimbursement, and calculated expenses for several years. Its end will mean major changes for payers, providers, and patients alike. Many organizations have entered into restructured arrangements connected to the waivers issued during the pandemic and need to be ready for the end of the PHE while patients got used to telehealth and Medicaid enrollment swelled.

D CEO Healthcare spoke with two experts from Munsch Hardt’s healthcare practice about the implications of the changes and what needs to be done when the PHE ends. Bill Swart is a Dallas shareholder for Munsch Hardt, who works with early-stage and middle-market companies in healthcare and other companies. Bradley Cook is a healthcare attorney focusing on regulatory issues, fraud and abuse, compliance, Medicare/Medicaid enrollment, and more.

Stark Law

Under normal circumstances, the Stark Law prevents physician self-referrals, specifically when the physician of a Medicare or Medicaid patient refers a patient to an entity for treatment at a facility where the physician has a financial relationship. During the pandemic, the federal government issued a series of waivers to allow providers to respond to the pandemic without fear of violating the Stark Law. The waivers applied to office space, personal protective equipment, and telehealth services.

For example, when the pandemic set in and patients stopped going to the doctor, many providers still had to pay rent on the space they rented from a hospital or other entity. The waivers allowed the landlords to make special deals with the providers below market rate to keep them in business and not impact care or put them out of business. Because the lease agreement was not market rate, it would violate Stark Law when the public health emergency ends. If other arrangements were made connected to medical equipment or personal protective equipment, those contracts should be restructured and returned to market rate before the end of the PHE.

“Arrangements that were entered into and were perfectly legal during the public health emergency now become prohibited under Stark Law,” Cook says.

Medicaid

At the beginning of the pandemic, Congress required that individuals that had been previously enrolled in Medicaid programs be kept on the Medicaid rolls until the end of the public health emergency. Because of this requirement, the number of uninsured people has dropped since the pandemic, and Medicaid enrollment has grown. When many people lost their jobs at the onset of the pandemic, they may have also qualified for Medicaid. Congress voted to end the provision in March, meaning states can unenroll individuals from Medicaid in April. The Kaiser Family Foundation estimates that between 5 and 14 million people will lose their health coverage because of the end of the provision. Many people now have jobs that would disqualify them from this benefit (to qualify in Texas for regular Medicaid, the individual must make less than $914 a month) but cannot afford commercial health insurance or the individual marketplace.

A lot is still unknown about how Texas will handle this, but there is a chance that patients who had benefitted from federal funding would now be indigent patients or unable to pay for needed services and need to receive charity care. Hospital associations have continually pushed the state of Texas for Medicaid expansion for this reason, but if the state begins removing people from the Medicaid rolls, this could impact providers’ bottom lines.

“As we’ve come through the recovery process, these families may have gotten new jobs hopefully and started to better their situations,” Cook says. “What’s the impact if they have to start joining the commercial insurance world versus the government payer as a beneficiary? It’s going to be interesting.”

Telehealth

Before the pandemic, there were several requirements for face-to-face interaction with a provider to continue to receive care. But waivers allowed patients at skilled nursing facilities and other providers to have telehealth visits to satisfy those requirements and allow those patients to continue to receive payments. These waivers were also set to end with the sunsetting of the PHE, but Congress’ omnibus bill passed at the end of last year made these provisions more permanent. Skilled nursing facility patients can have telehealth visits to continue their care without an in-person appointment through the end of 2024.

Other changes to telehealth services that have been made permanent beyond the end of the PHE are that there are no geographic restrictions for originating sites for behavioral telehealth services and that those services can be delivered with audio-only platforms. Rural hospital emergency departments can also be accepted as an originating site for telehealth services. During the pandemic, providers were allowed to use any non-public-facing application to communicate with patients without risking federal penalties, but that waiver will no longer exist with the end of the public health emergencies, so providers need to make sure their communication portal is HIPAA compliant. Operating across state lines is another PHE-era waiver that will be coming to an end, Swart says. “Particularly in the telemedicine context, several companies will need to rethink their ability to operate in other states. Some large companies that have crossed borders, particularly for telemedicine, will have less ability to do so.”

Author

Will Maddox

Will Maddox

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Will is the senior writer for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…
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