The COVID-19 pandemic has put enormous stress on all facets of our economy.
Businesses are shuttered and millions of people are out of work through no fault of their own. The entire healthcare system is being stretched to unknown limits as hospitals, physicians and healthcare workers are on the front line of this battle, doing amazing, heroic work to save lives.
Congress has passed three coronavirus emergency relief packages, with the most recent, the Coronavirus Aid, Relief and Economic Stabilization Act (CARES), costing $2.2 trillion, the largest financial support package in U.S. history.
It includes $500 billion for distressed companies, $377 billion in loans for small businesses, $260 billion for unemployment insurance, and $250 billion in direct payments to individuals and families.
For hospitals, the CARES Act provides $100 billion through the Public Health and Social Services Emergency Fund. This money will be used for expenses and lost revenue related to COVID-19.
The legislation also temporarily removes the Medicare sequester cuts from May 1 to December 31, increasing payments to hospitals and physicians. For physicians’ offices facing financial hardships, the American Medical Association encourages them to apply to the Paycheck Protection Program or an Economic Injury Disaster Loan through the Small Business Administration.
The Centers for Medicare and Medicaid Services has announced unprecedented temporary waivers from regulations, like accelerating and advancing payments to providers affected by the coronavirus for claims providing they meet the requirements; allowing inpatient care at temporary expansion sites; allowing off-site screenings to stem the spread of the virus; and waiving certain paperwork requirements.
Health and Human Services Secretary Alex Azar announced that part of the $100 billion will be used to reimburse providers for treating the uninsured at Medicare rates, but hospitals must not balance bill to receive the payments.
Healthcare professionals are naturally worried they will not have the resources to care for all that enter our hospitals. As a result, physicians and hospitals are reaching out to major insurers, asking them to do more to support them during the COVID-19 emergency, like allowing providers to opt into periodic interim payments and accelerated payments, waiving prior authorization, and covering cost-sharing for COVID-19 treatment.
Organizations representing hospitals and doctors are trying to get some of these changes implemented by petitioning governors and insurance commissioners.
There are several problems with the idea of forcing one private industry to help another. First, insurers have volunteered to activate many of the policies similar to those adopted by CMS, according to America’s Health Insurance Plans, the insurers’ trade association. AHIP stated, “It is clear that hospitals are under enormous clinical and financial stress, and health insurance providers stand strong with you.”
Insurers are waiving co-pays and co-insurance for COVID-19 testing and treatments; partnering with hospitals to accelerate the speed of providing care, like treatments, discharges, payments; and, eliminating administrative work.
Second, insurance companies are also facing severe financial challenges as spending could reach as much as $250 billion and it could go as high as $500 billion. The industry had asked for market-stabilizing measures, like federal re-insurance, to be placed in the CARES Act, but they were not included.
Insurers are private companies and rely on coverage payments from employers and individuals that are facing their own economic uncertainty with the government-ordered shutdown of “non-essential” businesses, forcing many businesses to drop and not pay for their employees’ insurance. Insurers who have a financial responsibility to their clients are already dealing with unforeseen costs.
They are not ATMs for another industry and cannot get into a tug-of-war with governors and state insurance commissioners over new payment arrangements.
There should be no friction between providers and insurance companies during this crisis and they should be assured that they will receive backup from the federal government to protect our citizens.
Indeed, if some of the frivolous provisions of the CARES Act had not been included, more funds could have been provided for hospitals and providers.
To protect everyone’s health, welfare and pocketbooks, if a fourth emergency spending bill is considered, it must follow Citizens Against Government Waste’s principles. The funds must be temporary and targeted, the spending must be transparent and accounted for, and it must be in direct response to the crisis at hand.
And, governments should not force one industry to involuntarily help pay for the effect of the coronavirus on another industry.
