Reimbursement Impacts/Section 1135 Waivers for CAHs and SNFs

Federal grants

Details are still developing but there may be availability of federal subsidies to help under-resourced hospitals in clinics. Funds may be available to re-purpose clinical units, and for quarantines and cost of additional labor to meet the new demand.

Medicare cost reports

Medicare has not extended the cost report deadlines at this time. However, if a provider has an issue filing its Medicare cost report, they can reach out to the JK Cost Report shared mailbox to discuss possible extensions.

Section 1135 waivers

Section 1135 of the Social Security Act authorizes the Secretary of The Centers for Medicare and Medicaid Services (CMS) to take certain actions in the event that the President declares a disaster or emergency, and the U.S. Department of Health and Human Services (HHS) Secretary declares a public health emergency under Section 319 of the Public Health Service Act.

Per CMS, examples of these 1135 waivers or modifications include:

  • Conditions of participation or other certification requirements
  • Program participation and similar requirements
  • Preapproval requirements
  • Requirements that physicians and other health care professionals be licensed in the State in which they are providing services, so long as they have equivalent licensing in another State (this waiver is for purposes of Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) reimbursement only. State laws govern whether a non-Federal provider is authorized to provide services in the State without State licensure)
  • Emergency Medical Treatment and Labor Act (EMTALA)
  • Stark self-referral sanctions
  • Performance deadlines and timetables may be adjusted (but not waived)
  • Limitations on payment for health care items and services furnished to Medicare Advantage enrollees by non-network providers

For more information on Section 1135 waivers, please visit CMS’s website.

At this time, the Secretary has invoked several Section 1135 waivers related to Critical Access Hospitals (CAHs) and Skilled Nursing Facilities (SNFs), as described below.

Critical access hospitals

A component of a CAH’s conditions of participation requires CAHs to have no more than 25 acute care beds, while maintaining an annual average length of stay of 96 hours or less for their acute care patients. CMS has authorized and issued an exception through an 1135 Waiver that would enable CAHs to exceed these requirements, as necessary, in response to COVID-19.

Skilled nursing facility

The previous coverage requirement for SNF stays is that patients must be hospitalized for at least three days before being admitted to the SNF. CMS has authorized the use of an 1135 waiver to exceed this requirement, as necessary, in response to COVID-19. It does not appear that SNFs need to request any further waivers from CMS at this time.


Marc Levy: Senior Manager

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

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