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April 29, 2020

Financial Impact of COVID-19 on the American Healthcare System

Written by: Compliance blogger


There has been significant disruption to the healthcare industry, with providers being asked to delay non-essential surgeries and procedures, other healthcare staff unable to work due to childcare demands, and disruption to billing, among the challenges related to the pandemic.

The financial impact to the health care industry may not be totally realized for some time. The Centers for Medicare & Medicaid (CMS) and other government programs are implementing various actions to help, but it may not be enough.

Families First Coronavirus Response Act (the FFCRA), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

The CARES Act was enacted on March 27, 2020. Section 3201 of the CARES Act amended section 6001 of the FFCRA to include a broader range of diagnostic items and services that plans and issuers must cover without any cost-sharing requirements (including deductibles, copayments, and coinsurance), prior authorization or other medical management requirements.

Additionally, section 3202 of the CARES Act generally requires plans and issuers providing coverage for these items and services to reimburse any provider of COVID-19 diagnostic testing an amount that equals the negotiated rate or, if the plan or issuer does not have a negotiated rate with the provider, the cash price for such service that is listed by the provider on a public website. (The plan or issuer may negotiate a rate with the provider that is lower than the cash price.) Click Here for the Frequently Asked Questions (FAQ) on FFCRA and the CARES Act published on April 11, 2020.

Suspended Sequestration

Section 3709 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily suspends the 2% payment adjustment currently applied to all Medicare Fee-For-Service (FFS) claims due to sequestration. The suspension is effective for claims with dates of service from May 1 through December 31, 2020. Sequestration has been a burden to providers. This short term “relief” is well deserved, but is brief.

Accelerated/Advance Payment for Providers & Suppliers During COVID-19 Emergency

The expansion of this program is only for the duration of the public health emergency. It is intended to provide necessary funds when there is a disruption in claims submission and/or claims processing. These expedited payments can be offered in circumstances such as national emergencies or natural disasters in order to accelerate cash flow to the impacted health care providers and suppliers.

CMS is authorized to provide accelerated or advance payments during the period of the public health emergency to any Medicare provider/supplier who submits a request to the appropriate Medicare Administrative Contractor (MAC) and meets the required qualifications. Click Here to download the Fact Sheet for more details, eligibility and process.

Changes to Coding and Billing

Scattered between various government agencies is the coding and billing advice for providers during the COVID-19 crisis. There are special ICD-10-CM Interim Coding Guidelines for the diagnosis, the World Health Organization (WHO) has published codes effective as of April 1, 2020, in addition to coding virtual visits and changes allowing new patients to be evaluated and treated.

  • Click Here for the Coding & Billing COVID-19 Encounters online course which consolidates the information and provides frequent updates to the course page throughout the 90 day access to the program.

Coronavirus Waivers & Flexibilities

The waiver flexibility is based on the number of confirmed cases as reported by CDC and will be assessed accordingly when COVID-19 confirmed cases decrease. It is a complex topic.

  • Click Here for the National CMS webpage devoted to this topic with downloads related to new waivers and flexibilities for health care providers and a list (you need to scroll down to view the list on this page) of Approved States under the COVID-19 1135 waivers.
  • Click Here for the Medicaid.gov webpage for COVID-19 Tools and Checklists for States and other Resources.

CMS and Other Insurance Carriers Expanding Telehealth and Virtual Visits Coverage

Virtual Check-In services, or brief check-ins between a patient and their doctor by audio or video device, could previously only be offered to patients that had an established relationship with their doctor. Now, doctors can provide these services to both new and established patients.

E-Visits - In all types of locations, including the patient’s home and in all areas (not just rural), established Medicare patients may have non-face-to-face patient-initiated communications with their doctors without going to the doctor’s office by using online patient portals.

Telehealth - CMS is expanding access to telehealth services for people with Medicare. During the pandemic, individuals can use commonly available interactive apps with audio and video capabilities to visit with their clinician. This means they can receive care where they are: at home or in a nursing or assisted living facility. If they have COVID-19, they can remain in isolation and prevent spread of the virus. If they aren’t infected, they can get care without risking exposure to others who may be ill.

  • Home Health Agencies can provide more services to beneficiaries using telehealth, so long as it is part of the patient’s plan of care and does not replace needed in-person visits as ordered on the plan of care.
  • Hospice providers can also provide services to a Medicare patient receiving routine home care through telehealth, if it is feasible and appropriate to do so.

Telehealth Toolkits –

Hyperlink to the Nursing Home Telehealth Toolkit:

Hyperlink to the Telehealth Toolkit for General Practitioners

End-Stage Renal Disease Providers Toolkit:

Telehealth and Risk Adjustment in Medicare Advantage: Due to the COVID-19 pandemic, Medicare Advantage Organizations and other organizations that submit diagnoses for risk adjusted payment are able to submit diagnoses for risk adjustment that are from telehealth visits when those visits meet all criteria for risk adjustment eligibility. Click Here for the April 10, 2020 CMS Memo regarding this topic.


As the efforts to combat this virus evolve with new treatments, drugs, testing and potential vaccines, health care providers will continue to be challenged to keep up with news and related events impacting the financial aspects of this pandemic.

We hope you use the American Institute of Healthcare Compliance Blog as a resource to review government RSS feeds and articles on current events, such as this. For COVID-19 online information and training, go to our website www.aihc-assn.org.


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