After months of negotiations on a second COVID-19 relief package, Congress has passed a bi-partisan agreement titled the “Consolidated Appropriations Act, 2021” which will provide $900 billion dollars in pandemic assistance and a $1.4 trillion deal to keep the government funded through September 2021. Enhanced unemployment benefits, direct stimulus payments, re-vamping the Paycheck Protection Program (PPP), protecting patients from ‘surprise’ medical bills, and legislation addressing upcoming Medicare Physician Fee Schedule cuts are all included in the agreement. The bill was signed by the President on 12/27/2020.
- 2021 Medicare Physician Fee Schedule cuts – $3 billion dollars will be diverted towards the 2021 Medicare Physician Fee Schedule with the intent to mitigate payment reductions due to the budget neutrality requirement associated with new evaluation and management (E/M) code values and documentation requirements. For a summary of provisions from the Ways & Means Committee: CLICK HERE
- Extension of Medicare sequester suspension – Passage of the CAREs Act temporarily suspended the 2% sequestration reduction required by the Sequestration Transparency Act of 2012. The passage of this new bill extends the suspension until March 31st, 2021.
- GPCI Floor Extended – the ‘floor’ of the work geographic price cost index (GPCI) has been extended through January 1st of 2024. This increases payment for the work GPCI in areas where labor costs are determined to be lower than the national average.
- Qualifying Participant APM Thresholds Frozen – higher thresholds for sufficient APM participation to qualify for the Advanced APM side of the Quality Payment Program have been paused. Instead of increasing qualifying participant thresholds in 2021 as planned, the QPP program will maintain current rates through 2022:
- Qualifying Participant – receive at least 50% of Medicare part B payments through APM
- Partial Qualifying Participant – Receive at least 50% of its Medicare Part B payments through the Advanced APM
- Moratorium on New E/M Add-On Code – payment for a new add-on code for medically complex evaluation and management (E/M) services (G2211) has been blocked until 2024. This code was originally set to be payable starting January 1st, 2021 as part of CMS’s plan for enhanced reimbursement for office/outpatient E/M services.
COVID-19 Relief Bill
Major highlights of the COVID-19 relief bill for healthcare providers:
- Direct stimulus payments and enhanced unemployed benefits – A second stimulus check of $600 will go to individuals making up to $75,000. Jobless workers will receive an extra $300 per week in federal funds through March 14, 2021.
- Paycheck Protection Program – $284 billion will be made available under the Paycheck Protection Program. Businesses who have already received a PPP loan can apply for a second loan if they fit the following criteria:
- Employ no more than 300 employees;
- Have used or will use the full amount of their first PPP; and
- Demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter.
The official re-start date of the PPP program is unclear, we anticipate more information to be available on the Small Business Administration website in the upcoming weeks. CLICK HERE
The bill also clarifies that expenses paid for with PPP loans are eligible for business tax deductions, a deviation from IRS’s position that businesses cannot deduct otherwise deductible expenses (such as payroll or rent) if the business used Paycheck Protection Program (“PPP”) loan proceeds to pay those expenses if the PPP loan is later forgiven.
- Health and Human Services Funding – $69 billion in funding will go towards various HHS programs, with the primary focus on vaccine distribution and testing/tracing services and some additional monies ($3 billion) added to the Provider Relief Fund.
- Tax Provisions– Several tax related provisions are included in the relief package, most notably an extension of the Employee Retention Tax credit and a tax credit to support employers offering paid sick leave. The bill would also allow taxpayers to use their 2019 income for purposes of claiming the earned income tax credit and child tax as well as extend the tax deductibility of business meals for two years.
“No Surprises Act”
“No Surprises Act” Ends Surprise Medical Bills
Legislation intended to ban the practice of ‘surprise’ medical bills was included into last minute negotiations for 2021 government funding. The ‘No surprises Act’ protects insured patients from receiving medical bills when they unknowingly receive out-of-network (OON) care.
At the core of the act, physicians and facilities will be prohibited from balance billing patients for the difference between in-network cost-sharing and billed charges. The exception to this rule would allow for balance billing a patient if the provider gave 72-hour advance notice that a procedure is considered OON.
The act establishes the following responsibilities and timelines for providers and facilities:
- Providers, facilities, and insurers are expected to verify patient insurance coverage three days before a scheduled service and to provide an estimate of expected costs.
- Providers are required to deliver patients a list of all services rendered within 15 days of the visit or of discharge from a facility.
Independent Dispute Resolution Process:
Under the act, if a provider and insurer disagree over an OON payment either party can initiate independent dispute resolution process (IDRP) following a 30-day negotiation period to attempt to resolve the payment dispute first.
The IDRP would be final offer, or baseball-style, arbitration, where both parties propose what they believe to be an appropriate payment and a mediator selects between the two offers. A mediator would not be permitted to use Medicare or Medicaid rates when determining appropriate payment amounts during the IDRP.
Patient liability for emergency services at OON facilities will be limited to in-network deductibles and cost sharing. Additionally, patients who receive care at an in-network facility by an OON provider will also have their costs limited to in-network rates. Insurers will be required to provide patients with additional information on deductibles, cost-sharing, and out-of-pocket limits.
Provisions of the “No Surprises Act” are effective for insurance plans beginning on or after January 1st, 2022.
The President-elect and leaders of both parties have stated that Covid-19 relief would remain a top priority for the new year.
Provider Relief Fund
HHS Begins Distributing Phase 3 of Provider Relief Funds
The department of Health and Human Services (HHS) announced that they have completed the review of the previously submitted Phase 3 Provider Relief Fund (PRF) applications and payments will be distributed to over 70,000 providers. Applications for the third phase closed on November 6th, for more details: CLICK HERE
HHS had originally allocated $20 billion for the third phase of funding, which was expected to compensate providers who had not already received a baseline payment of 2 percent of annual revenue from patient care and then provide additional payment related to lost revenue. However, HHS announced that will ultimately distribute $24.5 billion through this newest distribution which will continue through January 2021.
Important Upcoming Provider Relief Fund Dates:
- January 15, 2021 – the reporting portal for use of PRF funds opens. Recipients of PRF monies in excess of $10,000 dollars are required to report on the use of funds as outlined in the terms and conditions of the program.
- February 15, 2021 – Deadline to submit a first report for PRF expenditures spent through December 31, 2020
As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.
Manager, Regulatory Affairs