HHS Covid-19 PHE will be renewed and California is about to expire

The US Department of Health and Human Services (HHS) declaration that COVID-19 remains a public health emergency (PHE) will continue until July 15, 2022 and is expected to be renewed until October 13, 2022. Meanwhile, in California, various COVID-19 policies regarding healthcare 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 intended to ease compliance burdens on the US healthcare delivery system as its frontline clinicians responded to the virus. At the federal level, many of these policies are tied to the PHE ruling regarding COVID-19 that the Secretary of HHS has maintained since the start of 2020. In California, as in other states, similar emergency policies have been implemented in accordance with Governor’s orders. .

Now, more than two years after the initial HHS PHE statement, health care providers are considering the implications of ending these pandemic-era policies. The expiration of certain provisions of various California COVID-19 executive orders on June 30, 2022illustrates the interplay between federal and state compliance obligations that healthcare providers will need to manage as state COVID-19 policies evolve as part of the HHS PHE pursuit.

The HHS COVID-19 Public Health Emergency Declaration: What It Means for Healthcare Providers

Section 319 of the federal Public Health Service (PHS) Act (codified at 42 USC § 247d) is the source of the power of the Secretary of HHS to declare a PHE. This act authorizes the Secretary of HHS to “take appropriate action to respond to the public health emergency,” including “making grants, awarding expense allowances, entering into contracts, and conducting and supporting investigations into the cause, treatment, or prevention of a disease or disorder” underlying the PHE. Once issued, a PHE determination will expire after 90 days or sooner if the Secretary declares that “the emergency no longer exists”. Based on the “same or additional facts”, the Secretary may renew a PHE declaration for successive periods of 90 days.

A PHE, in turn, activates various executive powers under other federal statutes. One such example is Section 1135 of the Social Security Act (codified at 42 USC § 1320b-5). Under this authority, the Secretary of HHS may waive or modify, in the area covered by the PHE, various requirements relating to federal health care programs, the Health Insurance Portability and Accountability Act ( HIPAA), Emergency Medical and Occupational Treatment Act (EMTALA), Stark Act, and other legal or regulatory requirements applicable to healthcare providers. To this end, a “1135 waiver” aims to ensure that affected individuals enrolled in federal health care programs still have access to health care during PHE and also that health care providers will continue to be reimbursed, despite potential non-compliance with otherwise applicable federal requirements.

In response to COVID-19, then-HHS Secretary Alex Azar made the original PHE pandemic determination on January 31, 2020. Since then, the PHE has been continuously renewed for 90-day extensions. Most recently, current HHS Secretary Xavier Becerra extended the PHE on April 12, 2022for a period of 90 days ending on July 15, 2022. From the outset, the PHE declaration is national in scope and therefore applies to the entire United States.

Here are some of the HHS policies that are still in effect today that relate directly to the establishment of the PHE:

  • General exemptions issued by the Centers for Medicare and Medicaid Services (CMS) regarding penalties for a violation of the Stark Act resulting from financial relationships and referrals that are solely for “COVID-19 purposes.”

  • The Office of the Inspector General (OIG) incorporation of CMS General Waivers as applied in anti-bribery law enforcement.

  • Exercise of enforcement discretion by the Office for Civil Rights (OCR) not to impose penalties for non-compliance with HIPAA requirements against covered healthcare providers under the “Good Faith Provision of Telehealth” .

In January 2021, amid the transition between the Trump and Biden administrations, Acting HHS Secretary Norris Cochran sent a letter to state governors promising that, “when a decision is made to end the [PHE] declaration or allow it to expire, HHS will provide States with 60 days notice prior to termination. Based on this advice, some onlookers speculated that HHS would issue a notice of its intention to let the PHE expire on May 16, 2022 – 60 days before the current PHE renewal ends on July 15, 2022.

But May 16 has come and gone without such notice. As a result, HHS is set to renew the PHE for an additional 90 days, deferring it until at least October 13, 2022.

Given the regulatory flexibilities the PHE provides, its planned continuation through October should be a welcome development for healthcare providers. Yet as other COVID-19 policies have begun to wind down, providers must contend with the prospect of HHS eventually ending PHE or letting it expire. For some vendors, the termination or expiration of the PHE may require additional resources to be invested in their compliance programs as various regulatory requirements that have been put on hold during the recovery from the effect of the pandemic.

The challenge is that labor shortages persist and Burnout remains a struggle in healthcare as worries about a recession loom large. This is why, in a letter of May 10, 2022Various provider associations and other national groups, including the American Hospital Association, American Medical Association, and American Nurses Association, have implored HHS Secretary Becerra “to keep the PHE going until we know a extended period of greater stability and, guided by science and data, can safely unwind the resulting flexibilities.

At this time, HHS has not officially communicated how long it will maintain PHE after October. However, the agency has reiterated its commitment to state governors to provide 60 days notice of termination or expiration of the PHE. This means stakeholders could know whether the PHE will continue in 2023 by the first half of November – just as the public votes in the midterm elections, the results of which could impact the political agenda. from HHS regarding COVID-19 and the PHE.

Expiry of California’s COVID-19 policies on June 30, 2022 will impact healthcare providers

While HHS maintains PHE, some COVID-19 policies are being phased out at the state level. In California, Governor Gavin Newsom released Executive Order N-04-22 on February 25, 2022, establishing a staggered timeline for the termination or expiration of certain COVID-19 policies. In accordance with this schedule, several COVID-19 policies applicable to California healthcare providers will expire on June 30, 2022.

Notably, vendors in California will face a regulatory environment where, beginning July 1, 2022, certain behaviors excused by federal PHE-related policy could be sanctioned under state law. In particular, Executive Order N-04-22 will end the stay of administrative fines, civil penalties, and causes of action under the Medical Information Privacy Act (CMIA) – California’s analog of the HIPAA Act – for “inadvertent and unauthorized access or disclosure of health information during the good faith provision of telehealth services[.]The relaxed application of other state data protection laws as applied to providers engaged in the “good faith provision of telehealth services” will also cease on June 30, 2022.

In direct contrast, the aforementioned OCR Enforcement Discretionary Policy ensures that healthcare providers will not be penalized for non-compliance with HIPAA “in connection with the good faith provision of telehealth during the emergency. national public health COVID-19”. This means that a provider who improperly discloses patient identifying information when providing services through a telehealth platform could incur liability under the CMIA, but not under HIPAA.

Among other COVID-19 policies that will end on June 30, Executive Order N-04-22 will also end the authority of:

Achieving Compliance in a Post-Pandemic Regulatory Environment

As COVID-19 evolves as a public health threat, the environment for healthcare regulatory enforcement also evolves. Health care providers should continue to monitor the PHE and be alert to the termination or reduction of state COVID-19 policies, including those enacted by Governor’s Executive Order at the height of the pandemic, as produced in California with Executive Order N-04-22.

In coordination with their legal counsel, compliance officers and operational staff, providers are well advised to audit and assess how they have used regulatory waivers and relaxed enforcement policies throughout the pandemic. The expiry of these policies means that regulators will be stricter in their compliance expectations of suppliers. Thus, it is imperative that providers know when a waiver or relaxed enforcement policy is no longer in effect, lest they incur potential liability for a regulatory violation by unwittingly relying on a policy that is no longer valid.

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