With the federal emergency designation disappearing, health systems will see changes in funding and an end to some policies that had given providers more flexibility.
The federal government’s COVID-19 Public Health Emergency has ended, and that brings some significant changes for hospitals and health systems.
President Biden’s administration announced in January that the COVID-19 public health emergency would be phased out on May 11. So hospitals have had some time to get ready.
Still, Mark Howell, the American Hospital Association’s director of policy, said the end of the emergency designation brings some challenges for hospitals.
“Our members are ready to go; they've been preparing for this moment,” Howell told Chief Healthcare Executive® in an interview Wednesday. “But like anything else, there will be some growing pains and some challenges, I think, as everyone tries to get a feel for this new normal.”
With the emergency designation coming to a close, hospitals will face changes in funding, the return of some policies that weren’t exactly cherished traditions, and rules affecting capacity and discharge planning.
Here’s a rundown of some of the implications of the end of the public health emergency, policies that will change, and some flexibilities that will remain in place.
Under the COVID-19 emergency, hospitals received additional funding from Medicare for treating patients with the coronavirus. Medicare provided a 20% “add on” for patients diagnosed with COVID-19, but that policy disappears with the end of the emergency designation.
While COVID-19 hospitalizations are far lower than they were during the peak of the pandemic, health systems are still treating thousands of patients with COVID-19. The seven-day average of COVID-19 hospitalizations topped 8,200 from May 2-8, according to figures from the Centers for Disease Control and Prevention.
“Any financial cut is certainly concerning, given the financial situation that hospitals are in and the economic impact they have on their communities,” Howell said. “When you start to take away levels of reimbursement, that's always cause for concern.”
Hospitals are hoping the Centers for Medicare & Medicaid Services will eventually adjust reimbursements for caring for patients with COVID-19, who often require longer hospital stays, Howell says.
Gina Bertolini, a partner with K&L Gates specializing in health law, says the loss of the additional aid for COVID-19 patients is going to be another financial headache for health systems.
“This has been a hard year and a half or two years for hospitals from a bottom line perspective,” Bertolini says. “So I think, absolutely, the bump in reimbursement is a critical issue.”
The American Hospital Association continues to press Congress and the Biden administration for additional funding to offset losses during the pandemic. Rick Pollack, the AHA president, has bemoaned the lack of funding for the influx of patients during the Delta and Omicron waves.
“We haven’t received a dime for Delta and Omicron,” he said last July.
Some telehealth provisions appeared to be coming to a close with the end of the public health emergency, but federal agencies have issued a reprieve.
The Drug Enforcement Administration said it would allow telehealth provisions on the remote prescription of controlled substances to continue into November, easing the concerns of some healthcare leaders. Telehealth advocates said they worried that patients could lose access to medications for mental health needs and substance use disorder.
The DEA and SAMSHA also said that if a patient and a provider have established a telemedicine relationship on or before Nov. 11, 2023, the flexibilities will be permitted to continue until November 11, 2024.
The DEA has said it wants to ensure patients have access to medication but is also looking to prevent abuse or the “problematic prescribing” of controlled substances, Bertolini says.
“Telehealth, when done right, is really important to the future of healthcare, in particular for rural Americans or underserved Americans,” says Bertolini, who represents telehealth providers. “But I understand their concerns. And I think getting that balance is tricky.”
Congress approved a two-year extension for most telehealth waivers in a $1.7 trillion spending package in December, ensuring providers could continue telehealth services through the end of 2024. The extension also covered hospital-at-home programs. Medicare's telehealth flexibilities will remain in place through 2024, according to the U.S. Department of Health & Human Services.
Healthcare advocates are pushing for permanent telehealth reforms.
Bertolini predicts lawmakers and the administration are eventually going to approve permanent measures regarding telehealth and home hospital programs. She pointed out that the spending bill which included telehealth flexibilities had strong bipartisan support.
“You can't unring the bell,” Bertolini says, adding, “I think there's significant support at the federal level for extending these flexibilities.”
During the COVID-19 emergency, some rural hospitals gained some flexibility that is coming to an end.
Providers designated as critical access hospitals were able to exceed limits of 25 beds. Now, the 25-bed limit returns.
For rural hospitals, the greater concern is the return of limits regarding an average stay of 96 hours.
“We're not entirely sure how much sense it makes to keep that in place moving forward,” Howell says. “I know we've advocated for an extension of that waiver of the 96-hour rule and we're going to continue to do so and hope that Congress is interested in doing something as well.”
Requirements for nursing homes
Now that the emergency designation is disappearing, hospitals will once again be required to house patients for at least three days before they can be discharged to a skilled nursing facility.
Health systems have been struggling to find places to send patients who no longer require acute care. Due to staffing shortages at nursing homes, hospital leaders say they’ve been boarding patients who no longer require hospital care.
“Anytime you increase the requirements around when someone can be discharged from a facility when we're running into the issues we're running into now, certainly, it doesn't make it any easier,” Howell said.
Hospitals were given more flexibility in discharge planning during the public health emergency. Now, health systems will again have to follow more rigid rules in preparing patients to be discharged to a nursing home, rehabilitation center or home health agency.
Rather than flood patients with an overwhelming amount of information that may not be relevant to their needs, hospitals should be able to personalize discharge planning for the needs of patients, Howell says.
“It is one of the things that we've seen, even prior to the public health emergency, as a pretty significant level of burden that's not providing the level of benefit necessary,” Howell says. “And so we're hoping to work with CMS to revamp the way we think about discharge planning.”
Issue to watch: Medicaid enrollment
Congress had required states to keep people enrolled in Medicaid through the end of the public health emergency, significantly expanding the number of people covered. In the omnibus spending package signed late last year, Congress ended that requirement for continuous enrollment.
States are now tightening eligibility requirements, and federal officials have projected that millions could lose coverage. The Kaiser Family Foundation estimates 5 million to 14 million Americans could end up losing Medicaid coverage.
So far, hospitals aren’t seeing a large influx of patients without coverage yet, Howell says. But he projects health systems could be seeing more people without Medicaid coverage in four to six months.
COVID-19 treatment and vaccines
Even after the end of the public health emergency, Americans will continue to be able to get COVID-19 vaccines at no cost, the Department of Health & Human Services says.
The department also says it is working to ensure that COVID-19 treatments, such as Paxlovid and Lagevrio, will remain widely available.