CMS Approves Pennsylvania Section 1135 Waiver Requests in Connection with COVID-19 Pandemic

On March 27, 2020, the United States Department of Health & Human Services Centers for Medicare & Medicaid Services (“CMS”) issued a response to the Pennsylvania Medicaid Director’s request for waivers to a number of federal Medicaid, Children’s Health Insurance Program (“CHIP”) and Medicare requirements that pose challenges for Pennsylvania health care delivery systems in light of the COVID-19 pandemic. The Secretary of the United States Department of Health & Human Services is authorized to make these waivers under § 1135(b) of the Social Security Act (the “Act”).

The approved waivers have a retroactive effective date of March 1, 2020 and will remain in effect until termination of the public health emergency declared by the President of the United States, including any extensions.

Note: This CMS response only covers Section 1135 waivers. Waiver or modification requests requiring approval authority under any section other than 1135 will be addressed separately by CMS. Also, the response does not cover those waivers that CMS has already covered by blanket waiver.

Approved Waivers

Waiver 1:  Temporary Suspension of Medicaid Fee-For-Service Prior Authorization Requirements

CMS notes that prior authorization and medical necessity processes in fee-for-service delivery systems are established, defined and administered at state discretion and may vary depending on the benefit. Prior authorization requirements are a type of pre-approval requirement for which waiver and modification authorities under section 1135(b)(1)(C) of the Act is available.

Waiver 2:  Extension of Previously Received Prior Authorization

CMS shall permit services subject to a prior authorization process, as outlined in Pennsylvania’s state plan, that are approved to be provided on or after March 1, 2020 to continue to be provided without a requirement for a new or renewed prior authorization through the termination of the public health emergency, including any extensions.

Waiver 3:  Suspension of Pre-Admission Screening and Annual Resident Review Level I and Level II Assessments for 30 days

  • Level I and Level II assessments may be waived for 30 days (under Section 1919 (e)(7) of the Act). All new admissions may be treated like exempted hospital discharges. After 30 days new admissions with mental illness or intellectual disability should receive Resident Review as soon as resources become available.
  • CMS notes that new preadmission Level I and Level II screens are not required for residents who are being transferred between nursing facilities. Also the 7-9 day timeframe for Level II completion is an annual average for all preadmission screens, not individual assessments, and only applies to preadmission screens.

Waiver 4: Modification of Fair Hearing Requests and Appeals

  • CMS allows enrollees to have up to an additional 120 days for an eligibility or fee-for-service appeal to request a fair hearing.
  • CMS also modifies the following time frames associated with appeals and fair hearings:
    • for managed care entities to resolve appeals under 42 C.F.R. 438.408(f)(1) before an enrollee may request a state fair hearing to no less than one day. [The result would be that appeals would be deemed to satisfy the exhaustion requirement in 42 CFR 438.408(f)(1) after one day and allow enrollees to file an appeal to the state fair hearing level.]
    • under 42 C.F.R. 438.408(f)(2) for enrollees to exercise their appeal rights to allow for an additional 120 days to request a fair hearing when the initial 120-day deadline for an enrollee occurred during the waiver period.

Waiver 5: Provider Enrollment

  • Pennsylvania is authorized to provisionally, temporarily enroll providers for the duration of the public health emergency who are enrolled with another State Medicaid Agency (“SMA”) or Medicare.
  • For claims for services provided to Pennsylvania Medicaid enrollees, the 5th criteria under the current CMS policy as detailed in the Medicaid Provider Enrollment Compendium dated 7/24/18 page 42 (the “Compendium”) (which requires that the claim represents either a single instance of care furnished over a 180-day period or multiple instances of care furnished to a single participant over a 180-day period) will be waived. That is, Pennsylvania may reimburse out-of-state providers for multiple instances of care to multiple participants so long as the other criteria in the Compendium are met.
  • For providers not already enrolled with another SMA or Medicare, CMS will waive the following screening requirements so that Pennsylvania may provisionally and temporarily enroll the providers for the duration of the public health emergency:
    • payment of the application fee
    • criminal background check
    • site visit
    • in-state/territory licensure requirements
  • CMS approves the request to temporarily cease revalidation of providers located in Pennsylvania or otherwise directly impacted by the emergency.
  • The above enrollment provisions all apply to CHIP to the extent applicable.

Waiver 6:  Alternative Settings

A licensed facility, including nursing facilities, intermediate care facilities, psychiatric residential treatment facilities and hospital nursing facilities, may be fully reimbursed for services rendered to an unlicensed facility (during an evacuation or other need to relocate residents where the licensed facility continues to render services) as long as the State makes a reasonable assessment that the unlicensed facility meets minimum standards, consistent with expectations in the context of the current public health emergency, to ensure the health, safety and comfort of the residents and staff. The licensed facility would be responsible for determining how to reimburse the unlicensed facility.

For more information, please contact Christina Burke at 610.205.6351, or reach out to the Stevens & Lee attorney with whom you regularly work.

This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.