CMS Flexibilities to Fight COVID-19 – Inpatient Rehabilitation Facilities


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.



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


• 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



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


• 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


• 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);



• 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 §


• 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:

response-operations/current-emergencies/coronavirus-waivers .

• CMS has released guidance to providers related to relaxed reporting requirements for quality

reporting programs at