Right as 2020 was ending, Congress passed a long-awaited bill combining COVID-19 relief and 2021 appropriations. Just after Christmas, President Trump signed the bill into law, avoiding another government shutdown and extending much-needed relief to American workers, business, and health care providers in the midst of the ongoing COVID -19 pandemic.  

For more on what’s happening in Washington, we hosted a conversation between our CEO Tim Gronniger and policy strategist Chris Jennings previewing the political and policy landscape in 2021 at our symposium in December.  Watch that keynote discussion here.   

As expected, this law includes some important provisions to health care providers and ACOs. A summary is below.  

More provider relief: The law adds $3B to the $175B HHS Provider Relief Fund for expenses or lost revenue due to COVID-19. The law also clarifies how providers can use these funds to replace lost revenue, a welcome change for many providers trying to keep up with earlier shifting guidance.  

Medicare sequester suspension extended:  The Medicare 2% sequestration cut, previously lifted for the last 8 months of 2020, is further suspended for three months, until March 31, 2021. The 2% cut was not applied to ACO shared savings payments earned in 2019 and paid in 2020 because those payments were made during the sequester suspension late last year. Since shared savings earned in 2020 will likely be paid in late 2021, the 2% sequestration cut will likely apply unless Congress extends the suspension.  

2- year delay of threshold increases to qualify as an advanced APM: Alternative payment model participants earn a 5% part B bonus payment if they take on significant financial risk and have a certain proportion of patients and revenue included in the APM entity. The patient count and revenue thresholds were scheduled to increase sharply in 2021, making it harder to qualify for incentives. The new law freezes the thresholds at the 2020 level for performance years 2021 and 2022, a change Caravan Health and its clients advocated for.  

Changes to physician payment: The 2021 Physician Fee Schedule included a significant increase in payment for certain evaluation and management (E/M) services. Due to budget neutrality requirements, this resulted in payment cuts for some physician specialties. This law offsets some of these cuts by raising physician reimbursement by 3.75% for 2021 only. The law also delays for three years a payment add-on for certain complex patients.  

Payment to Physician Assistants: Beginning in 2022, physician assistants (PAs) will be able to bill Medicare directly rather than being paid through their employers.  

FCC COVID-19 Telehealth Program: The law provided an additional $250M for the FCC COVID-19 Telehealth Program. Back in March, the CARES Act provided $200M for this program and 8 Caravan clients were awarded this funding last summer. Per the law, FCC is seeking information about how to distribute this new money based on lessons learned from the first round. Applicants that did not receive funding in the first round will be able to reapply.   

More small business funds: The law provides $284B in additional funds for Paycheck Protection Program, which provides forgivable loans to certain small business to cover payroll and certain other expenses. Application for those funds is expected to open soon. Some small business that received a loan last year may be eligible for another loan. The law also provides $20B more for Economic Injury Disaster Loans. 

Improvements to rural facility reimbursement: The law allows certain critical access hospitals and rural hospitals to be designated as Rural Emergency Hospitals and provide emergency services, observation care, outpatient hospital services, telehealth services, ambulance services and skilled nursing facility services. These REHs would not provide inpatient acute care services. The law also raises the statutory limit for rural health clinic (RHC) reimbursement to bring it more in line with reimbursement for federally qualified health centers.  

Coverage improvements for beneficiaries: The law includes some important benefit enhancements for Medicare beneficiaries. Medicare patients with end-stage renal disease will be eligible to have immunosuppressive drugs covered after a kidney transplant. In addition, Medicare beneficiaries will have coinsurance waived for colorectal screenings and subsequent removal of polyps that are discovered beginning in 2022. Patient advocates had pushed for both changes in recent years.  

There is a lot more to this law including more funds for vaccine distribution, testing, and tracing, a prohibition on surprise billing, new price transparency requirements, and delays to scheduled disproportionate share hospital cuts. Caravan will bring more updates as the new Congress begins its work.  

Contact us today to learn more.

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