Upcoming Regulatory Changes Associated With the End of the PHE

This article is an update to a February 2023 article on changes to expect when the COVID-19 PHE concludes. 

At 11:59 p.m. on Thursday, May 11, 2023, the COVID-19 public health emergency (PHE) declaration will conclude, more than three years after taking effect in January 2020. The PHE declaration has enabled the U.S. Department of Health & Human Services (HHS) to invoke certain emergency powers, and over the course of the pandemic, both Congress and the Biden Administration have linked various other pandemic-related flexibilities and mandates to the PHE timeline.

HHS has issued multiple guidance documents in recent months to advise stakeholders about the implications of the upcoming PHE expiration, notably including a February 2023 COVID-19 Public Health Emergency Transition Roadmap and, more recently, an Informational Bulletin discussing the implications of the PHE’s end for Medicaid and CHIP (published May 8, 2023) and a memorandum summarizing the expiration of 1135 waivers for Medicare-participating providers (published May 1, 2023).

Ahead of the PHE’s termination, on April 10, 2023, President Biden signed H.J. Res. 7, which terminated the President’s declaration of a national emergency for COVID-19 under the National Emergencies Act (NEA). Distinct from the authorities associated with the public health emergency, the termination of the NEA declaration on its own “does not impact current operations at HHS and does not impact the planned May 11 expiration of the federal PHE,” as outlined by CMS. Most of the emergency measures outlined in this newsletter are linked to the PHE declaration by HHS and/or the President’s disaster declarations under the Stafford Act, both of which are scheduled to remain in effect until May 11.

This newsletter outlines some of the key measures with expiration dates that will expire in the coming days with the end of the PHE, as well as measures with expiration timelines that are distinct from the impending PHE termination.

Emergency COVID-19 Measures That Will Expire on May 11

The following policies are generally scheduled to expire at the same time as the PHE (i.e., after May 11, 2023) or shortly thereafter:

Section 1135 Waivers. The Centers for Medicare & Medicaid Services (CMS) has issued dozens of Section 1135 waivers that relax federal requirements for health care providers that participate in the federal Medicare or Medicaid programs and also for state Medicaid agencies. Most of these 1135 waivers will terminate at the end of the PHE, although for certain waivers, CMS has authorized grace periods following the end of the PHE.¹ On May 1, CMS issued a memorandum detailing the expiration of the Section 1135 waivers with additional information for providers and suppliers, particularly highlighting changes for long-term care providers as well as acute and continuing care providers. Among the many “blanket” 1135 waivers issued by CMS over the course of the COVID-19 pandemic are waivers that enable alternative sites of care, clinician practice across state lines, staffing flexibilities for hospitals and long-term care facilities, and the ability for hospitals to establish skilled nursing facility (SNF) “swing beds.” In addition, individual state Medicaid programs received waivers of federal requirements concerning, for example, the timelines and procedures for beneficiary and provider enrollment, appeals and the provision of home and community-based services (HCBS). In addition to the May 1 memorandum, CMS has previously released provider-specific fact sheets summarizing active waivers and identifying expiration timelines.

SNF Three-Day Rule. Normally, Medicare will cover an extended SNF stay only if it follows a hospital inpatient stay of at least three consecutive days. During the PHE, CMS waived this three-day requirement. Despite advocacy from stakeholders to Congress and the Administration, this waiver will expire at the end of the PHE.

HIPAA Enforcement Discretion. Over the course of the PHE, the HHS Office for Civil Rights (OCR) issued guidance relaxing enforcement of certain federal HIPAA privacy and security rules during the PHE, including a temporary authorization for providers to use non-HIPAA-compliant telehealth technology platforms², uses and disclosures of public health and health oversight activities, COVID-19 specimen collection and testing sites, and online scheduling for COVID-19 vaccine appointments. Those flexibilities are generally set to expire at the end of the PHE, except that the authorization for non-HIPAA-compliant telehealth platforms will continue for a 90-day grace period following the end of the PHE (until August 9, 2023), per April 2023 guidance.

Flexibilities Concerning Health Care Fraud and Abuse. During the PHE, CMS used Section 1135 to relax various restrictions under the Physician Self-Referral Law (commonly referred to as the “Stark Law”). In addition, the HHS Office of Inspector General (OIG) issued guidance condoning, for the duration of the PHE, certain COVID-19 response activities that might otherwise raise concerns under the Anti-Kickback Statute. These flexibilities are scheduled to sunset at the end of the PHE, and physicians and entities must immediately comply, once again, with provisions of the Stark Law.

Certain State Medicaid and CHIP Operational Flexibilities. In response to the pandemic, CMS allowed states to rapidly implement various time-limited changes to their Medicaid program and Children’s Health Insurance Program (CHIP). Many of these changes will expire at the end of the PHE or shortly thereafter, including program modifications implemented via a Disaster Relief State Plan Amendment (SPA), a COVID‑19 1115 demonstration project or a so-called “Appendix K” filing with respect to an HCBS waiver.³

Coverage of COVID-19 Tests Without Cost Sharing. During the PHE, enrollees in Medicare, Medicaid, CHIP and private health insurance received coverage of COVID-19 tests and testing-related services without cost sharing (and, for commercial enrollees, without prior authorization requirements). According to updated consumer fact sheets released on May 1, after the PHE ends:

• Medicare enrollees will no longer be federally entitled to coverage of over-the-counter tests at no out-of-pocket cost. However, Medicare Part B will continue to cover laboratory-based COVID-19 PCR and antigen tests with no out-of-pocket costs when a provider orders them.
• For those with private coverage, plans will no longer be required to cover over-the-counter or laboratory-based COVID-19 tests. For plans that do opt to cover COVID-19 testing, they may require cost sharing or prior authorization.
• For Medicaid and CHIP, however, states must continue covering COVID‑19 testing without cost sharing until September 30, 2024 (i.e., one year plus one calendar quarter following the end of the PHE), per the American Rescue Plan Act of 2021 (ARPA). After that date, coverage of testing may vary by state.

Flexibilities Concerning Controlled Substances. The Ryan Haight Online Pharmacy Consumer Protection Act generally requires practitioners to see a patient in person before prescribing controlled substances, including buprenorphine, one medication used to treat opioid use disorder (MOUD). During the PHE, authorized providers have been able to prescribe buprenorphine, other forms of MOUD and other controlled substances without an in-person visit pursuant to waivers from the Drug Enforcement Administration (DEA), which regulates controlled substances, and the Substance Abuse and Mental Health Services Administration (SAMHSA), which regulates opioid treatment programs. In December 2022, SAMHSA published a proposed rule and, in February 2023, the DEA issued two proposed rules (here and here) that address the prescribing via telemedicine of controlled substances beyond the PHE. For more, see the Manatt newsletter.

To many stakeholders’ disappointment, the DEA did not propose the anticipated telemedicine special registration regulation, which would have permitted registered practitioners to prescribe controlled substances based solely on a telemedicine encounter.

On May 3, DEA issued a statement noting that it has “decided to extend the current [PHE] flexibilities while [working] to find a way forward to give Americans that access with appropriate safeguards.” The statement notes that DEA and HHS have submitted an as-yet-unpublished temporary rule to the U.S. Office of Management and Budget in order to extend these flexibilities beyond the PHE termination date—largely in response to the record 38,000 comments received on the two proposed rules. Following up on that statement, on May 9, the DEA and SAMHSA jointly issued a temporary rule to:

1. Extend the full set of telemedicine flexibilities regarding the prescription of controlled medications, including MOUD, as were in place during the COVID-19 PHE for an additional six months (through November 11, 2023).
2. Continue to permit practitioners to prescribe certain controlled substances to established patients based on a telemedicine encounter for an additional 12-month grace period (through November 11, 2024) provided that the practitioner-patient telemedicine relationship is established on or before November 11, 2023.

The President’s Stafford Act Declarations. These declarations authorize the Federal Emergency Management Agency (FEMA) to disburse disaster relief funds. In addition to a nationwide emergency declaration on March 13, 2020, the President has issued state-by-state major disaster declarations. While these declarations are not tied in any formal manner to the conclusion of the PHE, FEMA announced that the “incident period” related to COVID-19 will also conclude on May 11, concurrent with the PHE’s conclusion. After that date, certain types of expenses will no longer be eligible for FEMA reimbursement.

Authorization Under the PREP Act for Pharmacy Personnel to Administer Routine Childhood Vaccines. HHS has issued declarations under the Public Readiness and Emergency Preparedness (PREP) Act to shield certain individuals and entities from liability with respect to the manufacture, distribution, administration or use of drugs, devices and biological products used to diagnose, treat or prevent COVID-19. Although some of these protections will last past the end of the PHE (as described below), HHS has announced that, when the PHE expires, so will HHS’s federal authorization permitting pharmacists to order, and pharmacy interns and technicians to administer, all federally recommended routine childhood vaccines, regardless of whether they are normally licensed to do so under state law.

Emergency Policies Whose Expiration Timelines Are Not Linked to the PHE

While a number of emergency measures are linked to the PHE’s timeline, as noted above, several other notable policies have expiration timelines unrelated to PHE, including the following:

Medicaid Continuous Coverage. The Families First Coronavirus Response Act of 2020 (FFCRA) offered states a 6.2-point bump in their federal Medicaid match rate subject to certain conditions, including a prohibition on terminating benefits for any Medicaid enrollee during the PHE. In the December 2022 Consolidated Appropriations Act, 2023 (CAA), Congress uncoupled the so-called continuous coverage requirement from the PHE, and instead defined March 31, 2023, as a fixed end date for this requirement, a gradual phase-down schedule for the federal match enhancement. The CAA also implemented new conditions, reporting requirements and enforcement mechanisms to prioritize coverage retention and smooth coverage transitions during the “unwinding” period.

Telehealth Flexibilities for Medicare and High-Deductible Health Plans. Although a number of Medicare telehealth flexibilities were originally linked to the PHE timeline, the CAA extends key flexibilities through the end of calendar year 2024, including the following:

• Any site in the United States, including a patient’s home, will be considered an eligible “originating site” for the delivery of telehealth services. Previously, Medicare covered telehealth only for residents of rural areas, and only if they traveled in person to an eligible originating site facility.
• The list of eligible telehealth practitioners will continue to include qualified occupational therapists, physical therapists, speech-language therapists and audiologists.
• Federally qualified health centers and rural health clinics may serve as originating or distant sites for the delivery of telehealth services.
• Providers may offer mental health services via video or audio-only telehealth without needing to satisfy in-person visit requirements.⁴
• Medicare will continue to cover an expanded list of audio-only telehealth services.
• Practitioners will be able to use telehealth to conduct face-to-face encounters prior to recertification of eligibility for hospice care.

Additionally, high-deductible health plans that are eligible for health savings accounts may continue to provide pre-deductible coverage for telehealth services through the end of 2024.

Medicare Waivers for Acute Hospital Care at Home. The CAA also extends the Acute Hospital Care at Home initiative through December 31, 2024. As the name suggests, this program allows hospitals to provide inpatient-level services in patients’ homes, subject to CMS approval and compliance with program requirements. (By contrast, the waiver authorizing home-based services under the hospital outpatient fee schedule will expire at the end of the PHE.)

Coverage of COVID-19 Treatments Without Cost Sharing. To date, the federal government has generally purchased and distributed antiretrovirals and other COVID‑19 treatments to providers free of charge, on the condition that the providers administer those treatments to eligible patients free of charge. Standard coverage and cost sharing rules will kick in under Medicare and commercial coverage once the federal government ceases federal purchase and distribution (commonly referred to as the “commercialization” of these COVID‑19 products). By contrast, in Medicaid and CHIP, ARPA requires states to cover COVID‑19 treatments, without cost sharing, until September 30, 2024 (consistent with the mandate for coverage of COVID‑19 testing, as noted above).

Coverage of COVID-19 Vaccines Without Cost Sharing. On a permanent basis, COVID-19 vaccines will be covered with no cost sharing under Medicare, Medicaid and commercial health coverage (potentially subject to provider network requirements), consistent with the CAA (as applicable to Medicare and certain adult Medicaid and CHIP populations) and pre-pandemic laws (as applicable to the commercial market and certain Medicaid and CHIP populations).

HHS Public Readiness and Emergency Preparedness (PREP) Act. HHS’s PREP Act declaration, which went into effect in February 2020, shields certain individuals and entities from liability with respect to the manufacture, distribution, administration or use of drugs, devices and biological products used to diagnose, treat or prevent COVID-19. HHS has used the PREP Act to preempt certain state laws on licensure and scope of practice, including an authorization for most types of health care practitioners nationwide to order and/or administer COVID-19 vaccines under certain circumstances (as discussed here by Manatt). HHS’s PREP Act declarations for COVID-19 and related guidance are available here. April 2023 guidance from HHS previewed a forthcoming declaration that would:

• Extend certain PREP Act protections through December 2024, including the authorizations for pharmacy personnel to order and administer COVID-19 vaccines, influenza vaccines and COVID-19 tests, as well as the protections for activities under federal purchasing agreements.
• Preserve certain additional authorizations regarding the COVID-19 vaccinator workforce until the end of the relevant federal purchasing agreements.
• Leave undisturbed the existing protections for pharmacy personnel to dispense COVID-19 treatments (including pharmacist prescribing of Paxlovid), as well as pharmacists and other providers prescribing tests in the Test to Treat program, through which individuals with a suspected COVID-19 infection can be tested, treated and prescribed treatment.

The FDA’s Emergency Use Authorizations (EUAs). During the pandemic, the FDA has invoked Section 564 of the Federal Food, Drug, and Cosmetic (FD&C) Act to issue EUAs that temporarily authorize unapproved medical products, such as drugs, vaccines and devices. If an EUA product does not receive full FDA approval within a year of receiving an EUA, HHS must provide a written “explanation of the scientific, regulatory, or other obstacles to approval, licensure, or clearance.”

After Three Years, Preparing for the End of Key Pandemic Policies

Recognizing that the COVID-19 PHE has been active for more than three years, some health care stakeholders may have come to take many of the associated flexibilities for granted as part of their regular day-to-day operations. With the PHE’s end in sight, providers, state officials and other stakeholders should be sure to identify any temporary flexibilities that continue to factor into their operations, confirm the expiration date for those flexibilities and develop a plan for ensuring compliance with post-pandemic federal requirements.

_{¹ For example, many states received 1135 waivers related to provider enrollment in Medicaid, including waivers allowing for delays in provider revalidation and permitting provisional enrollment of providers who were already enrolled with Medicare or with another state’s Medicaid program. CMS has authorized a six-month grace period for these flexibilities following the end of the PHE, as described in CMS State Health Official Letter (SHO) 20-004.}

_{² In OCR guidance, examples of non-HIPAA-compliant telehealth technologies listed, among others, Apple FaceTime, Google Hangouts video, Whatsapp video chat, Zoom, or Skype.}

_{³ See here for a chart summarizing the expiration timelines for various federal flexibilities concerning Medicaid and CHIP. This chart was developed with support from the State Health and Value Strategies (SHVS) program, a grantee of the Robert Wood Johnson Foundation.}

_{⁴ The periodic in-person requirement that is currently being waived until the end of 2024 requires that providers conduct an initial in-person visit with patients at least once within six months prior to initiating the delivery tele-behavioral health services, and then once every 12 months thereafter. This requirement does not apply to the treatment of a diagnosed substance use disorder or co-occurring mental health disorder.}