CMS Issues Sub-Regulatory Guidance on CARES Act for Hospitals, Intermediate Rehabilitation Facilities, and Long-Term Care Hospitals

Client Alert

Gibbons Special Alert

April 23, 2020

On April 15, 2020, the Centers for Medicare & Medicaid Services (CMS) issued guidance on implementing certain sections the CARES Act, which provide for a 20 percent add-on payment for hospital treatment of COVID-19 patients and modify rules that affect access and payment to inpatient rehabilitation facilities and long-term care hospitals regarding COVID-19 patients.

20% Add-On Payment Hospitals – Coding Guidance

Section 3710 of the CARES Act provides for a 20 percent increase to the DRG weighting factor for individuals diagnosed with COVID-19 who are discharged during the COVID-19 public health emergency period. In its guidance issued on April 15, CMS clarified how those discharges should be identified and coded. Specifically, CMS announced that COVID-19 patient claims should be coded, per the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) diagnosis codes, as follows:

  • COVID-19 patients discharged between January 27, 2020 and March 31, 2020, should be coded B97.29.
  • COVID-19 patients discharged on or after April 1, 2020, through the end of the public health emergency period, should be coded U07.1.

CMS also referred providers to the following ICD-10-CM guidelines:

Intermediate Rehabilitation Facilities – Technical Clarification of Interim Final Rule

Subsection 3711(a) of the CARES Act waives certain minimum hourly therapy requirements. Specifically, the CARES Act waives the requirement that patients treated in intermediate rehabilitation facilities must receive at least 15 hours of therapy per week. The guidance issued by CMS on April 15 clarifies that the Subsection 3711(a) waiver supersedes a recently enacted interim final rule with comment titled: “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency.” (See 85 FR 19230)

Long-Term Care Hospitals – Discharge Payment Percentage and Site-Neutral Payment

Subsection 3711(b)(1) waives the 50% Discharge Payment Percentage rule (DPP), which would normally lead to a payment adjustment if the 50 percent ratio was not met. In its April 15 guidance, CMS announced that it will count all long-term hospital admissions in the numerator of this calculation, i.e., counted as discharges paid the PPS standard federal payment rate.

Subsection 3711(b)(2) waives the site-neutrality provision that could result in lower payments. (See “Long-Term Care Hospital Prospective Payment System.”) In its April 15 guidance, CMS announced it will update its claims processing systems to pay the PPS standard rate for all long-term care hospital cases admitted during the COVID-19 public health emergency period, effective for all claims with an admission date on or after January 27, 2020.

Gibbons is available to assist your business in implementing practical strategies and solutions during this rapidly moving and unprecedented pandemic. For more information about current regulatory and sub-regulatory guidance issued by federal and state agencies, and for assistance in exploring contractual solutions for your healthcare business, contact Barry Liss, Co-Leader of the Gibbons Healthcare Team.

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