Post a comment
Print articleCMS Changes its Approach to Services Provided Under Arrangements for COVID-19 Emergency
April, 2020 - Seema Kanwar, Nate Lykins
On April 6, 2020, the Centers for Medicare and Medicaid Services (CMS) published an interim final rule in the Federal Register that, among other initiatives and changes to existing policy, allows certain inpatient hospital services to be provided “under arrangements” outside of the hospital. The “March 2020 IFC” is intended to give healthcare providers increased flexibility to respond to the public health emergency created by COVID-19. This modification to CMS’s under arrangement policy is retroactive to March 1, 2020 and will only last for the duration of the COVID-19 public health emergency. Under the March 2020 IFC, a hospital is allowed to bill Medicare for certain services that another entity provides to the hospital’s inpatients, even if those services are provided outside of the hospital.
Medicare conditions of participation require hospitals to provide certain minimum services. However, a hospital does not have to provide all of those services itself. Instead, the hospital can arrange for required services to be provided “under arrangements” with another entity by entering an agreement with that entity. The hospital must exercise sufficient professional oversight of the services, and the hospital’s receipt of payment must fully discharge the liability of the beneficiary (i.e., the other provider is prohibited from billing Medicare for the services and must receive payment from the hospital).
Under Section 1861 of the Social Security Act, the term “inpatient hospital services” includes: (1) bed and board; (2) nursing services and other related services (including use of hospital facilities, drugs, biologicals, supplies, appliances, and equipment); and (3) other diagnostic or therapeutic items or services. CMS has referred to the first two categories as “routine services,” and, significantly, Section 1861 requires these services (but not the services in the third category) to be provided “by the hospital.” CMS has interpreted the phrase “by the hospital” to mean that routine services must be provided by the hospital itself or, if the hospital is providing the services under arrangements, within the hospital’s buildings.
