On March 27th, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act (“Act”). The Act is a massive piece of legislation, covering a number of aspects of economic life, including programs to maintain employment, assist workers, families and businesses, supporting the health care system, and providing assistance to distressed sectors of the U.S. economy.

Many health care providers may be wondering what changes the Act will bring to the health care field and hospitals may be wondering whether they would be eligible for any types of financial assistance.

The Act will provide a $100-billion-dollar relief package to eligible health care providers to “prevent/prepare for and respond to the coronavirus” which will be reimbursed through grants or other mechanisms. Such health care providers will be able to seek reimbursement for Coronavirus-related expenses or lost revenues attributable to it.

Eligible health care providers are defined as “public entities, Medicare or Medicaid enrolled suppliers and providers and such for-profit and not-for-profit entities not otherwise described in this Section as the Secretary may specify, which diagnose, test or care for individuals with possible or actual cases of COVID-19.”

Health care providers may not seek funds under this Act to reimburse expenses or losses which may be reimbursed from other sources or that other sources may be obligated to reimburse. Providers will have continued obligations relating to any funds they receive. Specifically, they will have to submit reports and maintain documentation, in the form, manner and frequency as determined by the Secretary of Health and Human Services (“HHS”). These funds will be available for “building or construction of temporary structures, leasing of properties, medical supplies and equipment including PPE (personal protective equipment) and testing supplies, increased workforce and trainings, emergency operating center, retrofitting facilities and surge capacity.”

In order to receive these funds, health care providers will be required to submit an application to the Secretary of HHS with a statement that explains and justifies the need for the payment and the health care provider shall have a valid tax identification number. As this Act was just recently passed, guidance as to how to apply for these funds and how long the process will take to process all applications and to receive funds, will come in the near future.

In addition to financial assistance, there are other provisions aimed at assisting the health care industry in its fight against COVID-19.

Title III of the Act is titled “Supporting America’s Health Care System in the Fight Against Coronavirus” and provides a variety of new programs and changes to existing law to address a variety of health care delivery issues that have arisen during this unprecedented time. These changes include:

Part I – Addressing Supply Shortages has a number of programs to address medical product, emergency drug and medical device shortages. A high level summary is included below.

 Subpart A – Medical Product Supplies.

  • Section 3101 directs HHS to engage the National Academies of Sciences, Engineering and Medicine to study the security of the U.S. medical product supply chain to assess U.S. dependence on critical drugs and devices that are sourced or manufactured outside of the U.S. and provide Congress with recommendations to improve the resiliency of the supply chain. The National Academies will be required to consider input from various federal agencies and consult with relevant stakeholders in the health care field.
  • Section 3102 now requires the Strategic National Stockpile to stockpile PPE and other supplies for the administration of drugs, vaccines, medical devices and diagnostic tests, including medical supplies for diagnostic testing of COVID-19. The current lack of stockpiling is what has partially contributed to the current shortages of these supplies.
  • Section 3103 now extends targeted liability protections for the production of an approved respiratory protective device that is deemed to be a priority for use during a public health emergency, such as COVID-19.

Subpart B – Emergency Drug Shortages.

  • Section 3111 requires the FDA to prioritize and expedite the review of drug applications and inspections to mitigate any drug shortages.
  • Section 3112 imposes further requirements on drug manufacturers to notify the Secretary of HHS of a permanent discontinuance in the manufacture of a drug or in the interruption of the manufacture of the drug that is critical to the public health during a public health emergency. The requirements also require the reasons for such discontinuances and interruptions and remediation of same.

Subpart C – Medical Device Shortages.

  • Section 3121 requires manufacturers of a device that is critical to the public during a public health emergency (such as ventilators during this COVID-19 crisis) to also report to HHS any permanent discontinuance in the manufacture of such a device or an interruption in the manufacture, including applicable reasons, if the result is likely to lead to a meaningful disruption of the supply of the device in the US. HHS, in turn, shall distribute such information to health care providers. Additionally, HHS shall use this information to prioritize and expedite the review of any devices that could help mitigate or prevent such shortages.

Part II Access to Health Care for COVID-19 Patients has a number of provisions allowing patients easier and cost-effective access to health care during the current COVID-19 crisis.

Subpart A – Coverage of Testing and Preventive Services.

  • Section 3201 requires that all testing (including tests which are FDA approved and the tests which may or may not have an emergency use authorization by the FDA) for COVID-19 is to be covered by private health insurance companies without cost-sharing.
  • Section 3202 clarifies that for the COVID-19 tests which are at no cost to the patient, insurance companies must either pay the rate specified in the contract between the provider and insurer or if no such contract, the cash price requested by the provider. Coverage would also be available for any preventive services and vaccines for COVID-19. In addition, providers testing for COVID-19 must publicize their cash price for such testing and /or services and failure to do so may result in a civil monetary penalty of not more than $300 for each day the provider is in non-compliance.
  • Section 3203 requires group health plans and health insurance issuers offering group or individual health insurance to cover (without cost-sharing) any qualifying (approved item, service or vaccine) that is intended to prevent COVID-19.

Subpart B – Support for Health Care Workers Fighting this Pandemic.

  • Section 3211 allows supplemental awards, in the amount of $1.32 billion dollars, for community health centers (serving a medically underserved population or a special medically underserved population) which are testing and treating coronavirus patients.
  • Section 3212 establishes telehealth network and telehealth resource center grant programs and reauthorizes Health Resources and Services Administration (HRSA)’s grant programs that promote the use of telehealth technologies for health care delivery, education and health information services.
  • Section 3213 also establishes grant programs for rural health care services outreach, rural health network development and small health care provider quality improvement programs to increase access to health care for rural health communities during the COVID-19 pandemic.

Subpart C – Miscellaneous Provisions Applicable to Health Care.

  • Section 3221 relaxes certain requirements relating to substance use disorder treatment records requirements. Most notably, 42 CFR Part 2 is now closely aligned with HIPAA with respect to use and disclosure of patient records once initial patient consent is obtained.
  • Section 3224 requires HHS to issue guidance, within 180 days of the enactment of the Act, on the sharing of protected health information during the COVID-19 crisis


In addition, the Act’s Subtitle D (Finance Committee), Sections 3701 to 3719 benefits patients and the health care industry as follows:

  • Section 3701 relieves the requirements for patients with high deductible plans (and a health saving account) to meet the patient deductible before the plan will cover telehealth services, increasing access to those patients who may be infected with COVID-19. 
  • Section 3702 allows patients to use funds in their Health Savings and Flex Spending Accounts for certain over-the-counter medical products which they could not otherwise without a valid prescription.
  • Section 3703 increases Medicare’s telehealth flexibilities during the COVID-19 emergency period by eliminating previous requirements which limited telehealth services to those where the physician or other health care provider has treated the beneficiary in the last three years.
  • Section 3704 increases access to Medicare beneficiaries for telehealth services for Federally Qualified Health Centers (“FQHC”) and Rural Health Clinics (“RHC”) by allowing payments for telehealth services to FQHCs and RHCs if these clinics serve as a distant site (where the provider is located). 
  • Section 3705 also increases access to telehealth services by temporarily waiving periodic face-to-face requirement visits between home dialysis patients and physicians.
  • Section 3706 now allows the use of telehealth to conduct face-to-face encounters prior to recertification of eligibility for hospice care during the COVID-19 emergency period.
  • Section 3707 encourages the Secretary of HHS to consider ways to encourage use of telecommunications for remote patient monitoring for home health services.
  • Section 3708 allows midlevel providers to order home health services consistent with the midlevel provider’s state law licensure and applicable scope of practice requirements.
  • Section 3709 allows for increasing provider funding through lifting the Medicare sequester from May 1 through December 31, 2020, therefore increasing payments to health care providers.
  • Section 3710 increases the weighing factor by 20 percent for Medicare inpatient prospective payment systems for patients discharged for a COVID-19 illness.
  • Section 3711 increases access to post-acute care during the national emergency. First, this section relieves the burden of acute care hospitals which are caring for COVID-19 patients by waiving the Inpatient Rehabilitation Facility (IRF) 3-hour rule which requires a beneficiary to participate in at least three hours of intensive rehabilitation for five days before being admitted to an IRF. Next, with respect to long-term care hospitals (LTCH) which provide inpatient hospital services during the emergency period, this Section (1) waives the requirement that LTCH’s discharge payment percentage be at least 50 percent, and (2) pauses the current LTCH site-neutral payment methodology.
  • Section 3712 prevents scheduled reductions in Medicare payments for durable medical equipment in rural and noncontiguous areas as well as for areas other than rural and noncontiguous during the emergency period.
  • Section 3713 allows Medicare beneficiaries to receive a COVID-19 vaccine and its administration without any cost sharing.
  • Section 3714 requires Medicare Prescription Plans and Medicare Advantage Plans to allow beneficiaries to receive single fills and refills of covered Part D drugs for 90 days during the emergency period.
  • Section 3715 increases access to care and decreases burden to acute care hospitals by allowing state Medicaid program to pay for home and community-based services, such as paying qualified professionals to assist with activities of daily living outside of the hospital setting.
  • Section 3716 clarifies a section in the Families First Coronavirus Response Act by ensuring that any uninsured individuals can receive the screening test for COVID-19 under a state Medicaid plan, if the state chooses to offer such a test under its Medicaid plan.
  • Section 3717 also clarifies a section in the Families First Coronavirus Response Act so that all Part B Medicare beneficiaries can receive all tests for COVID-19 testing with no cost-sharing.
  • Section 3718 not only eases administrative burdens by extending certain reporting requirements of private payor data by one year but it also delays scheduled reductions in Medicare payments for clinical diagnostic laboratory tests furnished to beneficiaries in 2021.
  • Section 3719 expands the Medicare accelerated payment program during the COVID-19 emergency period. Typically, the accelerated payment program is available to hospitals which have significant cash flow problems resulting from operations of its intermediaries or from unusual circumstances of the hospital’s operations. During the COVID-19 emergency period, however, hospitals, including Critical Access Hospitals, will be able to request up to a six-month advance lump sum or periodic payment. Hospitals under the program would be able to request up to 100 percent of the prior period payments with Critical Access Hospitals being able to receive up to 125 percent. Hospitals would not be required to start repaying this loan for four months and would have at least 12 months to complete the repayment of the loan.

If you have questions, please contact one of the attorneys in our Health Care industry group.