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Are you Prepared for the Revenue Hit When the Federal COVID-19 Public Health Emergency Ends?

Once the public health emergency is ended, providers will face a revenue hit; mitigating the revenue loss is essential.

By Rick Parker, Executive Director

May 2022

It seems like only yesterday when the government shut nearly everything down and the federal COVID-19 Public Health Emergency (PHE) was declared. It’s hard to believe that we are more than two years after that decision; providers must be prepared for the hit on revenues once the public health emergency ends.

Approximately $178 billion in relief funds were given to hospitals and other healthcare providers on the front lines through the Coronavirus Aid, Relief & Economic Security (CARES) Act; the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA); and the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act. Other Department allocations include $50 billion in Provider Relief Fund (PRF) payments for general distribution to Medicare facilities and providers.

The PHE has recently been extended, and is scheduled to end in mid-July 2022. Although the Department of Health and Human Services has committed to giving states at least 60 day notice prior to ending it, there is little else that will signal the end of the PHE if the latest renewal is the last. In late April 2022 Dr. Anthony Fauci, chief medical advisor to President Biden, told the Washington Post that the US is “in a transitional phase, from a deceleration of the numbers into hopefully a more controlled phase and endemicity.” Given these public comments, one would expect the earliest the PHE might expire is sometime this summer assuming that there is no material negative changes in the COVID-19 statistics.

Let’s take a look at the things that may or may not end upon the expiration of the PHE declaration.

  • Hospital Funding
  • CMS Waivers
  • State Medicaid Programs
  • Telehealth Coverage
  • Vaccines, Treatments, Medical Supplies

As a result of the declaration Congress increased funding for hospitals by 20% to pay for COVID-19 cases. President Biden also issued a separate declaration which allowed for more flexibility in providing financial assistance for pandemic expenses. Recent funding bills have not added to the coffers of the HRSA COVID-19 Uninsured Program or the Provider Relief Fund, and as of this writing those programs are winding down.

Hospitals are also likely to lose waivers related to workforce flexibility and home care programs once the emergency ends. Flexibilities such as expanded hospital sites and temporary locations would no longer be an option.

Congress passed the Families First Act at the beginning of the pandemic which provided federal funding for state programs to increase enrollment. This was to help address those that had lost jobs. This Act was also designed to ban states from removing people from Medicaid due to income changes or paperwork issues. When the PHE expires, states will have a 12 months to cull the Medicaid roles via redeterminations that are typically performed after a year of enrollment.

According to the Urban Institute, this could affect approximately nine million Americans enrolled in Medicaid between 2/2020 and 1/2021.They further suggest that upwards of 15 million people could be dis-enrolled when the emergency ends, with some seven million children at risk of losing coverage.

There is significant lobbying going on aimed at maintaining the pandemic telehealth policies beyond the termination of the PHE. The emergency provisions allowed Medicare to expand telehealth coverage, including care from doctors in different states as well as the use of audio-only care. The most recent omnibus bill provides for Medicare telehealth coverage to continue for 151 days after the end of the PHE, though it is too early to tell what telehealth will look like when it is overhauled in the next budget bill.

COVID-19 vaccines, medical supplies and other treatments should still be available after the PHE ends because the Emergency Use Authorizations from the FDA are independent from the PHE from HHS. According to a Congressional Research Service report there is an active declaration for COVID-19 that could extend the authorization for use as far as October 2025.Additionally, once the PHE has ended, providers can expect a return to patient co-pays for many services that were dictated to be covered 100% by their insurer.

So while it is clear that funding and services will be terminated once the emergency declaration ends, there are many decisions still up in the air. Things could change at any time so it is imperative to stay on top of these fast-changing developments. For more information about how CBIZ KA can assist you in preparing and reacting to these potential changes, please contact Rick Parker at [email protected] or at 609-918-0990 x 173.

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