The U.S. Department of Health and Human Services (HHS) statement that COVID-19 remains a public health emergency (PHE) will remain in effect until July 15, 2022 and is expected to be extended again until October 13, 2022. Meanwhile, in California, various COVID-19 policies regarding health care providers will expire on June 30, 2022.
For healthcare providers, the COVID-19 pandemic has been characterized by ongoing regulatory waivers and relaxed enforcement policies designed to ease the burden of compliance with the US healthcare system as its frontline clinicians responded to the virus. At the federal level, many of these policies are linked to the COVID-19 definition of PHE, which the HHS Secretary has been supporting since early 2020. In California, as in other states, similar emergency policies have been implemented in accordance with the governor’s orders. .
Now, more than two years after HHS PHE’s initial announcement, health care providers are considering the implications of this pandemic-era policy as it comes to an end. Expiration of Certain Provisions of Various California Government COVID-19 Orders June 30, 2022illustrates the relationship between federal and state compliance obligations that health care providers will need to comply with as state COVID-19 policy evolves amid the continuation of HHS PHE.
HHS Statement of Public Health Emergency COVID-19: What it Means for Healthcare Providers
Section 319 of the Federal Public Health Service (PHS) Act (codified in 42 USC § 247d) is the source of the HHS secretary’s authority to declare PHE. This act authorizes the Secretary of HHS to “take such action as may be appropriate to respond to a public health emergency,” including by “providing grants, providing reimbursements for expenses, awarding contracts, and conducting and supporting investigations into causes, treatment or prevention of a disease or disorder” underlying the PHO. A PHE decision, once issued, expires 90 days later, or earlier if the clerk declares that “the emergency no longer exists.” Based on “the same or additional facts”, the secretary may extend the PHE declaration for subsequent 90-day periods.
The PHE, in turn, exercises various executive powers under other federal laws. One such example is section 1135 of the Social Security Act (codified at 42 USC § 1320b-5). Under this authority, the HHS Secretary may revoke or amend, in the area affected by PHE, various requirements relating to federal health programs, the Health Insurance Portability and Accountability Act (HIPAA), the Emergency Medical Services and Labor Act (EMTALA), the Stark Act . Law and other legal or regulatory requirements applicable to health care providers. To this end, the “1135 waiver” is intended to ensure that affected individuals enrolled in federal health programs continue to have access to health care during PHE, and that health care providers continue to receive reimbursement despite potential non-compliance with other applicable federal requirements.
In response to COVID-19, then-HHS Secretary Alex Azar made original definition of PHE in relation to the pandemic as of January 31, 2020. Since then, PHE has been continuously extended by 90 days. Most recently current HHS Secretary Xavier Becerra extended PHE April 12, 2022for a 90-day period ending July 15, 2022. From the very beginning, the PHE declaration was national in nature and thus valid throughout the United States.
The following are some of the HHS policies that are still in effect today and are directly related to having a PHE:
- General failures issued by the Centers for Medicare and Medicaid Services (CMS) for sanctions for violating the Stark Act as a result of financial relationships and referrals that are solely related to “COVID-19 Targets.”
- Office of the Inspector General (OIG) enabling generic CMS opt-outs in accordance with the provisions of the Anti-Kickbacks Act.
- Exercise of Enforcement Discretion The Office of Civil Rights (OCR) will not impose HIPAA fines on covered health care providers due to “good faith provision of telehealth services.”
In January 2021, in the midst of the transition between the Trump and Biden administrations, Acting HHS Secretary Norris Cochran directed letter to state governors promising that “when the decision to terminate [PHE] declaration or before it expires, HHS will notify the states 60 days prior to termination.” Based on this guidance, some observers have speculated that HHS will issue a notice of its intent to allow PHE to expire on May 16, 2022 – 60 days before the current PHE renewal ends on July 15, 2022.
But May 16 came and went without such notice. As a result, HHS is ready to extend the PHE for another 90 days, extending it until at least October 13, 2022.
Given the regulatory flexibility PHE provides, its expected continuation through October should be a welcome development for health care providers. However, as other COVID-19 policies have begun to wind down, service providers must face the prospect of HHS eventually ending the PHE or allowing it to expire. For some vendors, PHE termination or expiration may require additional resources to be invested in their compliance programs as various regulatory requirements have been put on hold during the resurgence of the pandemic.
The problem is that labor shortages persist, and burn out remains a struggle in the healthcare sector as recession fears loom. That’s why in letter dated May 10, 2022various provider associations and other national groups, including the American Hospital Association, the American Medical Association, and the American Nurses Association, pleaded with HHS Secretary Becerra to “support PHE until we experience a long period of greater stability and, guided by science and data, can be safely unleash the resulting flexibility.
As of now, HHS has not officially announced how long it will support PHE in October. The agency, however, reaffirmed its commitment to state governors to give 60 days’ notice of PHE termination or expiration.. This means that stakeholders may find out if PHE continues in 2023 by the first half of November – just as the public votes in the midterm elections, the results of which could affect HHS’s COVID-19 and PHE policy agenda.
California COVID-19 Policies Expiration June 30, 2022 Will Impact Health Care Providers
While HHS supports PHE, some COVID-19 policies are being phased out at the state level. In California, Gov. Gavin Newsom issued Order N-04-22 February 25, 2022, by establishing a phased schedule for ending or expiring certain COVID-19 policies. Under this schedule, certain COVID-19 policies applicable to health care providers in California will expire on June 30, 2022.
Notably, service providers in California will face a regulatory framework where, effective July 1, 2022, certain actions justified by federal PHE-related policies may be penalized under state law. Specifically, Executive Order N-04-22 will end the suspension of administrative fines, civil penalties, and causes of action under the Medical Privacy Act (CMIA)—California’s equivalent of HIPAA—for “unintentional, unauthorized access or disclosure of medical information.” during the conscientious provision of telemedicine services[.]Effective June 30, 2022, there will also be no relaxation of compliance with other government data protection laws for providers engaged in “fair telehealth service delivery.”
In contrast, the OCR Freedom of Action policy mentioned above ensures that health care providers will not be penalized for failing to comply with HIPAA “in connection with the provision of telemedicine in good faith during the COVID-19 nationwide public health emergency.” This means that a provider that improperly discloses patient-identifying information when providing services through a telemedicine platform may be liable under CMIA, but not under HIPAA.
Among other COVID-19 policies expiring June 30, Executive Order N-04-22 also terminates:
Achieving Compliance in the Post-Pandemic Regulatory Environment
As COVID-19 becomes a public health threat, so is the health care regulatory environment. Healthcare providers should continue to monitor PHE and be prepared to end or reduce state policies regarding COVID-19, including those that were enacted by gubernatorial order in the midst of a pandemic, as is happening in California under Executive Order N-04. -22.
In collaboration with their legal advisors, compliance officers, and operations staff, suppliers are encouraged to audit and evaluate how they have used regulatory waivers and relaxed enforcement policies throughout the pandemic. The removal of these policies means that regulators will be more stringent in their requirements for suppliers. Thus, providers need to know when a waiver or relaxation policy is no longer in effect so that they do not incur potential regulatory liability by inadvertently relying on a policy that is no longer in effect.