As our nation weathers the coronavirus public health crisis, SPN is striving to keep the Network of independent think tanks informed about how federal actions affect their states. By providing updates on the federal government’s actions to combat this crisis, we hope to synthesize and share helpful information that empowers states to be responsive to the needs of their communities.
Testing & Treatment
Changes from the federal level address COVID-19 testing needs by allowing labs, other than the CDC, to develop and authorize tests. Additionally, this federal action requires insurance to cover testing. There are still barriers to manufacturing since several key components of the test are in short supply, and protective gear for lab workers is in short supply.
- The Food and Drug Administration lifted regulations so commercial and state laboratories can now develop their own tests.
- The second relief package required private insurance, Medicaid Medicare, and CHIP to cover the cost of testing. It also temporarily increased the Medicaid Federal Medical Assistance Percentages (FMAP) by 6.2% to pay for testing. In order to receive those additional FMAP funds, states cannot terminate eligibility after March 18, 2020, unless those individuals move or request to end coverage. The most recent relief package extended coverage requirements to vaccines once one is developed.
- The CARES Act, a third relief package, included $100 billion to be granted directly to hospitals and other providers for COVID-19 expenses. $30 billion has already gone out to hospitals based on 2019 Medicare reimbursements. Health and Human Services is developing guidance for the remaining $70 billion so it can be distributed to rural hospitals and the facilities with the greatest share of COVID-19 cases. Hospitals that receive funds are prohibited from “surprise billing” for any patients covered by government programs, employer plans, or self-purchased insurance.
What States Can Do
- States can use the FMAP increase to ensure they cover the cost of testing, but they need to cease any benefit terminations as of March 18.
- States can also implement tracking mechanisms to ensure they receive proper reimbursement from the emergency funding for their testing of the uninsured.
- States can authorize tests developed in CMS certified laboratories in their states.
Access to Healthcare
Federal changes are permitting the temporary waiving of many regulations in order to grant states and hospitals more flexibility to meet growing healthcare needs. To date, the Centers for Medicare and Medicaid Services (CMS) has approved forty-five 1135 waivers from states, giving them additional flexibility with Medicaid, Medicare, and hospital regulations during a national emergency. As part of these waivers, states can request to expand telemedicine, suspend in-state license requirements, and waive hospital stay protocol.
Many governors are using executive orders to expand these temporary deregulations to all providers in their states. SPN has a list of healthcare policy recommendations to help address this crisis, and think tanks are welcome to share it with state policymakers.
1. Increasing hospital bed capacity
The CARES Act included $100 billion for the Public Health and Social Services Emergency Fund. Hospitals and other providers need to apply for the funds directly from the Department of Health and Human Services, and these funds can be used for COVID-19 expenses, such as constructing temporary structures and purchasing medical supplies.
CMS also waived regulations on where hospitals can house patients, allowing them to transfer patients and provide care in alternate facilities, such as dorms, hotels, community centers, and temporary tents.
What States Can Do
- States need to request waivers from CMS. Some of the requests, such as allowing hospitals to move patients to a temporary unlicensed facility (such as tents of community facilities donating space), need to be approved on a state-by-state basis.
2. Expanding telemedicine and remote care
- Broadband Access: The Coronavirus Aid, Relief, and Economic Security (CARES) Act (the third relief package passed by Congress) included $200 million for the Federal Communications Commission (FCC) to help health care providers purchase internet and devices to deliver remote medicine. An additional $100 million will be used to expand telehealth for providers that primarily serve veterans and low-income patients.
- The FCC also waived gift rules so broadband companies can offer improved connections and technology during the emergency.
- Medicare: As of March 6, 2020, Medicare can be used to cover telehealth services. Many privacy-related restrictions have also been removed. Doctors can visit patients virtually and use live-video platforms, such as Facetime or Skype. An additional 85 services were made eligible for reimbursement.
- Medicaid: States could already use Medicaid to cover telehealth services, so no additional federal approval is needed. However, additional state action is needed if a state does not currently use Medicaid dollars to reimburse telehealth visits.
- Prescriptions: During this public health emergency, DEA-registered practitioners can write prescriptions for controlled substances to new patients examined through telehealth communication.
- Remote Vital Sign Monitoring: On March 20, the FDA temporarily approved the use of devices to monitor vital signs such as temperature, respiratory rate, heart rate and blood pressure.
What States Can Do
- Federal action only expands telehealth for patients reimbursed through Medicare, not commercial plans. States must examine their specific regulations if they want telehealth options to be extended to commercial plans.
- Since Medicaid telehealth programs vary from state-to-state, each state should review its laws and look for ways to expand access.
3. Suspending licensure requirements for out-of-state providers
This action will increase the number of medical professionals available to respond to the crisis. Since COVID-19 is impacting areas of the country at different rates, healthcare needs are more acute in areas such as Washington, California, and New York. Medical professionals licensed in other states will have the flexibility to offer their services—and get paid—in states that need their help the most.
What States Can Do:
- States can request an 1135 waiver (other approved waivers) to permit licensed out-of-state providers to bill Medicaid, Medicare, and CHIP for services provided in another state. States need to collect and track some basic information and confirm the status of the provider’s license.
- For this federal action to apply to expenses reimbursed by private plans, states need to suspend licensure requirements.
4. Fast track Medicaid and Medicare Part B’s approval of providers
More healthcare providers are needed to meet increasing patient needs. It can take a long time for these healthcare providers to be approved to bill to Medicaid and Medicare. Centers for Medicare and Medicaid Services (CMS) has set up a toll-free hotline to expedite approval and eliminate some of the screening requirements for providers and medical suppliers to submit bills to Medicare Part B.
The Department of Health and Human Services estimates that the country has only 1% of the N-95 masks that healthcare workers need in a widespread pandemic. Lack of personal protective equipment impacts all areas of the healthcare sector dealing with the virus. The actions from federal policymakers attempt to provide more flexibility in the types of masks providers can wear and protect companies from liability so they are encouraged to manufacture more masks.
What States Can Do:
- At this time there is no specific state action recommended, other than states attempting to find and purchase equipment and encouraging community donations.
- States issuing shelter-in-place orders or other restrictions on businesses and movement should thoroughly review their essential business and personnel exemptions to ensure they will not hamper companies and employees that are either manufacturing personal protective equipment or are part of the supply chain.
With some economists forecasting up to 32% unemployment, states need to be ready for a massive increase in unemployment claims. Congress expanded benefits and appropriated additional funds to cover the expansion and assist workers during this tough time. Since these funds are temporary, states should prepare for proposals for continue to the enhanced benefits after funding ends.
Expanded unemployment benefits include:
- Covered individuals now include those diagnosed with COVID-19 or caring for a family member with the virus.
- Recipients will receive an additional $600/week for four months, in addition to state benefits, and they don’t have to wait a week to begin receiving unemployment.
- Unemployment benefits are extended for 13 weeks after state benefits end.
- Self-employed and independent contractors can qualify for benefits.
In addition to covering the expanded benefits, Congress appropriated funds for:
- Additional administration expenses states incur due to the increase in applications.
- 100% of the costs associated with “short-term compensation” or work-share programs where an employer reduces employee hours instead of laying off workers. States that currently do not have this program can establish it by the end of the year and receive funding.
With so many state-wide school closures educators, administrators, and parents scrambling. The federal government is allowing states to waive federally mandated testing and performance assessments. The CARES Act included approximately $13.5 billion in the Education Stabilization Fund to be distributed based on Title I allocations (lower-income states getting more money). After that, the Act distributes funds equitably to all schools, including private schools, based on student population. The funds can be used for a wide array of COVID-19 expenses, including distance learning.
Governors can request additional funds from the Department of Education’s $3 billion Governor’s Emergency Stabilization Fund.
What States Can Do:
- States need to submit waivers to skip federally mandated testing, freeze the performance rankings of individual schools and loosen restrictions on how they spend federal money.
- States must also apply for the Governor’s Emergency Education Relief Fund.
Additional Support for State and Local Programs
The $2.2 trillion CARES Act not only provided direct funding to individuals and companies, it also provided funding to states. The following are a few of the larger appropriations that address fiscal and social needs.
- $150 billion for a Coronavirus Relief Fund, of which $139 billion will go to states based on population, with no state getting less than $1.25 billion. States must reserve 45% of funds for local governments with populations over 500,000. Cities can also apply directly to the Treasury for these funds. States are not required to grant money to cities with populations less than 500,000.
- An additional $3.5 billion for Child Care and Development Block Grants. It will be allocated to states based on 2019 funding.
- $15.5 billion to expand Supplemental Nutritional Assistance Program benefits. There are additional state waivers related to this program that have been decided on a state-by-state basis.
- $5 billion for Community Development Block Grants (CDBG). $3 billion was allocated through 2020 CDBG and Emergency Solutions Grants funding. The US Department of Housing and Urban Development will allocate the additional $2 billion based on COVID-19 related needs.
- $25 billion to the Federal Transit Administration to grant to transit agencies.
What States Can Do:
State and other governmental entities need to
apply for these funds. Policy makers need to ensure programs that are funded
through these grants are temporary and will not cause budget problems in the