CMS Flexibilities to Fight COVID-19 – Inpatient Rehabilitation Facilities
4/29/2020
Inpatient Rehabilitation Facilities: CMS Flexibilities to Fight COVID-19
Since the beginning of the COVID-19 Public Health Emergency, the Trump Administration has issued an
unprecedented array of temporary regulatory waivers and new rules to equip the American healthcare
system with maximum flexibility to respond to the 2019 Novel Coronavirus (COVID-19) pandemic. These
temporary changes will apply immediately across the entire U.S. healthcare system for the duration of
the emergency declaration. The goals of these actions are to 1) expand the healthcare system workforce
by removing barriers for physicians, nurses, and other clinicians to be readily hired from the community
or from other states; 2) ensure that local hospitals and health systems have the capacity to handle a
potential surge of COVID-19 patients through temporary expansion sites (also known as CMS Hospital
Without Walls); 3) increase access to telehealth in Medicare to ensure patients have access to physicians
and other clinicians while keeping patients safe at home; 4) expand in-place testing to allow for more
testing at home or in community based settings; and 5) put Patients Over Paperwork to give temporary
relief from many paperwork, reporting and audit requirements so providers, health care facilities,
Medicare Advantage and Part D plans, and States can focus on providing needed care to Medicare and
Medicaid beneficiaries affected by COVID-19.
Medicare Telehealth
• Telehealth may be used to fulfill the requirement for physicians to conduct the required face-toface
visits at least 3 days a week for the duration of a Medicare Part A fee-for-service patient’s stay
in an inpatient rehabilitation facility.
Patients Over Paperwork
• “Stark Law” Waivers: The physician self-referral law (also known as the “Stark Law”) prohibits
a physician from making referrals for certain healthcare services payable by Medicare if the
physician (or an immediate family member) has a financial relationship with the entity performing
the service. There are statutory and regulatory exceptions, but in short, a physician cannot refer
a patient to any entity with which he or she has a financial relationship. On March 30, 2020, CMS
issued blanket waivers of certain provisions of the Stark Law regulations. These blanket waivers
apply to financial relationships and referrals that are related to the COVID-19 emergency. The
remuneration and referrals described in the blanket waivers must be solely related to COVID-19
Purposes, as defined in the blanket waiver document. Under the waivers, CMS will permit certain
referrals and the submission of related claims that would otherwise violate the Stark Law. These
flexibilities include:
o Hospitals and other health care providers can pay above or below fair market value for
the personal services of a physician (or an immediate family member of a physician), and
parties may pay below fair market value to rent equipment or purchase items or services.
For example, a physician practice may be willing to rent or sell needed equipment to a
hospital at a price that is below what the practice could charge another party. Or, a hospital
may provide space on hospital grounds at no charge to a physician who is willing to treat
patients who seek care at the hospital but are not appropriate for emergency department or
inpatient care.
o Health care providers can support each other financially to ensure continuity of health care
operations. For example, a physician owner of a hospital may make a personal loan to the
hospital without charging interest at a fair market rate so that the hospital can make payroll
or pay its vendors.
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o Hospitals can provide benefits to their medical staffs, such as multiple daily meals, laundry
service to launder soiled personal clothing, or child care services while the physicians are at
the hospital and engaging in activities that benefit the hospital and its patients.
o Health care providers may offer certain items and services that are solely related to
COVID-19 Purposes (as defined in the waivers), even when the provision of the items or
services would exceed the annual non-monetary compensation cap. For example, a home
health agency may provide continuing medical education to physicians in the community
on the latest care protocols for homebound patients with COVID-19, or a hospital may
provide isolation shelter or meals to the family of a physician who was exposed to the novel
coronavirus while working in the hospital’s emergency department.
o Physician-owned hospitals can temporarily increase the number of their licensed beds,
operating rooms, and procedure rooms, even though such expansion would otherwise be
prohibited under the Stark Law. For example, a physician-owned hospital may temporarily
convert observation beds to inpatient beds to accommodate patient surge during the
COVID-19 pandemic in the United States.
o Some of the restrictions regarding when a group practice can furnish medically necessary
designated health services (DHS) in a patient’s home are loosened. For example, any
physician in the group may order medically necessary DHS that is furnished to a patient by
one of the group’s technicians or nurses in the patient’s home contemporaneously with a
physician service that is furnished via telehealth by the physician who ordered the DHS.
o Group practices can furnish medically necessary MRIs, CT scans or clinical laboratory services
from locations like mobile vans in parking lots that the group practice rents on a part-time
basis.
• Intensity of Therapy Requirement (“3-Hour Rule”): The Coronavirus Aid, Relief, and
Economic Security (CARES) Act requires the Secretary to waive § 412.622(a)(3)(ii)
(commonly referred to as the “3-hour rule”), the criterion that patients treated in inpatient
rehabilitation facilities generally receive at least 15 hours of therapy per week. The waiver
of this requirement for all beneficiaries treated in a hospital-based or freestanding IRF
provides flexibility for IRFs to provide care for patients during the PHE for the COVID-19
pandemic. IRFs should strive to provide typical IRF levels of care for beneficiaries admitted
during the COVID-19 crisis who require and can benefit from the IRF levels of care.
• Standards to Rehabilitate Patients: Medicare payment regulations require IRFs to meet certain
standards to rehabilitate patients, including ensuring that admitted patients are stable enough
for rehabilitation therapy, need at least two types of therapy, and develop plans of care. During
the PHE, these standards do not have to apply to patients who are admitted to freestanding IRFs
solely for surge capacity reasons in a state that is currently in Phase 1 or has not yet entered Phase
1 of the White House’s Guidelines for Opening Up America Again, but would continue to apply
to patients who are admitted for the IRFs’ standard rehabilitative services. We anticipate that
freestanding IRFs will take advantage of these flexibilities for some of their beneficiaries (those
who are surge patients from inpatient hospitals), while continuing to provide standard IRF-level
care for those beneficiaries who would benefit from IRF-level care and would otherwise receive
such care in the absence of the PHE.
• IRF Teaching Status Adjustment Payments: To ensure that teaching IRFs can alleviate bed capacity
issues by taking patients from the inpatient acute care hospitals without being penalized by lower
teaching status adjustments, we are freezing the IRFs’ teaching status adjustment payments at
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their values prior to the PHE. For the duration of the COVID-19 PHE, an IRF’s teaching status
adjustment payments will be the same as they were on the day before the COVID-19 PHE was
declared.
• IRF Quality Reporting Program: We are delaying the compliance dates for collecting and
reporting of the Transfer of Health Information quality measures and certain standardized patient
assessment data elements (SPADEs) adopted for the IRF Quality Reporting Program. IRFs will
be required to begin collecting the Transfer of Health Information quality measures and certain
SPADEs on October 1st of the year that is at least one fiscal year after the end of the public health
emergency.
• Post Admission Evaluations: Physicians are no longer required to conduct and document postadmission
evaluations for Medicare patients admitted to an IRF during the PHE. The postadmission
evaluation covers much of the same information as continues to be included in the preadmission
screening of the patient and the patient’s plan of care. This reduction in burden gives
more time for physicians to take care of patients.
• Flexibility for Inpatient Rehabilitation Facilities Regarding the “60 Percent Rule”: CMS is waiving
requirements to allow IRFs to exclude patients from the IRF freestanding hospital’s or unit’s
inpatient population for purposes of calculating the applicable thresholds associated with the
requirements to receive payment as an IRF (commonly referred to as the “60 percent rule”) if an
IRF admits a patient solely to respond to the emergency and the patient’s medical record properly
identifies the patient as such. In addition, during the applicable waiver time period, we would
also apply the exception to facilities not yet classified as IRFs, but that are attempting to obtain
classification as an IRF.
• Freestanding IRFs are able to work with acute care hospitals under arrangements to provide surge
capacity for the community.
• Provider Enrollment: CMS has established toll-free hotlines for all providers as well as the following
flexibilities for provider enrollment:
o Waive certain screening requirements.
o Postpone all revalidation actions.
o Expedite any pending or new applications from providers.
Medicare appeals in Fee for Service, Medicare Advantage (MA) and Part D
• CMS is allowing Medicare Administrative Contractors (MACs) and Qualified Independent
Contractor (QICs) in the FFS program 42 CFR 405.942 and 42 CFR 405.962 and MA and Part D
plans, as well as the Part C and Part D Independent Review Entity (IREs), 42 CFR 562, 42 CFR
423.562, 42 CFR 422.582 and 42 CFR 423.582 to allow extensions to file an appeal;
• CMS is allowing MACs and QICs in the FFS program 42 CFR 405. 950 and 42 CFR 405.966 and
the Part C and Part D IREs to waive requirements for timeliness for requests for additional
information to adjudicate appeals; MA plans may extend the timeframe to adjudicate organization
determinations and reconsiderations for medical items and services (but not Part B drugs) by up
to 14 calendar days if: the enrollee requests the extension; the extension is justified and in the
enrollee’s interest due to the need for additional medical evidence from a noncontract provider
that may change an MA organization’s decision to deny an item or service; or, the extension is
justified due to extraordinary, exigent, or other non-routine circumstances and is in the enrollee’s
interest 42 CFR § 422.568(b)(1)(i), § 422.572(b)(1) and § 422.590(f)(1);
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• CMS is allowing MACs and QICs in the FFS program 42 C.F.R 405.910 and MA and Part D plans,
as well as the Part C and Part D IREs to process an appeal even with incomplete Appointment of
Representation forms 42 CFR § 422.561, 42 CFR § 423.560. However, any communications will only
be sent to the beneficiary;
• CMS is allowing MACs and QICs in the FFS program 42 CFR 405. 950 and 42 CFR 405.966 and
MA and Part D plans, as well as the Part C and Part D IREs to process requests for appeal that
don’t meet the required elements using information that is available 42 CFR § 422.562, 42 CFR §
423.562.
• CMS is allowing MACs and QICs in the FFS program 42 CFR 405. 950 and 42 CFR 405.966 and MA
and Part D plans, as well as the Part C and Part D IREs, 42 CFR 422.562, 42 CFR 423.562 to utilize all
flexibilities available in the appeal process as if good cause requirements are satisfied.
Cost Reporting
• CMS is delaying the filing deadline of certain cost report due dates due to the COVID-19
outbreak. We are currently authorizing delay for the following fiscal year end (FYE) dates. CMS
will delay the filing deadline of FYE 10/31/2019 cost reports due by March 31, 2020 and FYE
11/30/2019 cost reports due by April 30, 2020. The extended cost report due dates for these
October and November FYEs will be June 30, 2020. CMS will also delay the filing deadline of the
FYE 12/31/2019 cost reports due by May 31, 2020. The extended cost report due date for FYE
12/31/2019 will be July 31, 2020.
• Accelerated/Advance Payments: In order to provide additional cash flow to healthcare providers
and suppliers impacted by COVID-19, CMS expanded and streamlined the Accelerated and
Advance Payments Program, which provided conditional partial payments to providers and
suppliers to address disruptions in claims submission and/or claims processing subject to
applicable safeguards for fraud, waste and abuse. Under this program, CMS made successful
payment of over $100 billion to healthcare providers and suppliers. As of April 26, 2020, CMS
is reevaluating all pending and new applications for the Accelerated Payment Program and has
suspended the Advance Payment Program, in light of direct payments made available through the
Department of Health & Human Services’ (HHS) Provider Relief Fund. Distributions made through
the Provider Relief Fund do not need to be repaid. For providers and suppliers who have received
accelerated or advance payments related to the COVID-19 Public Health Emergency, CMS will not
pursue recovery of these payments until 120 days after the date of payment issuance. Providers
and suppliers with questions regarding the repayment of their accelerated or advance payment(s)
should contact their appropriate Medicare Administrative Contractor (MAC).
Additional Information
• The Interim Final Rules can be found at: https://www.cms.gov/about-cms/emergencypreparedness-
response-operations/current-emergencies/coronavirus-waivers .
• CMS has released guidance to providers related to relaxed reporting requirements for quality
reporting programs at https://www.cms.gov/files/document/guidance-memo-exceptions-andextensions-
quality-reporting-and-value-based-purchasing-programs.pdf.