COVID-19: Updated - Planning for Life After 1135 Waivers and Other Regulatory Flexibility Ends
Absent further action, the current public health emergency (PHE) declared by Secretary Azar is set to expire on July 25, 2020. As a reminder, the PHE declaration is both (i) a precondition for the U.S. Department of Health and Human Services (HHS or Department) and Centers for Medicare & Medicaid Services (CMS) maintaining regulatory waivers under Section 1135 of the Social Security Act and (ii) the duration period for certain regulatory flexibility provided by HHS in the two Interim Final Rules with Comment Period (IFCs) that were issued at the end of March and April. Given the ongoing pandemic and statements of various officials in the administration, we believe it is highly likely that the PHE will be extended. Further, HHS has previously issued PHE declarations with a retroactive effective date—for example, the initial COVID-19 PHE was declared January 31, 2020 to be effective January 27, 2020, which gives greater comfort in the event Secretary Azar does not act by this Saturday.
As COVID-19 cases continue to climb, the American Hospital Association and the National Governors Association have urged Secretary Azar to extend the PHE. Michael Caputo, HHS spokesperson, tweeted on June 29, 2020 that HHS plans on extending the current PHE declaration, but the Department has made no formal announcement yet. Additionally, Secretary Azar and Vice President Mike Pence suggested on July 6, 2020 that the administration plans on extending the PHE declaration but made no firm commitment to do so. The precipitous termination of 1135 waivers and IFC flexibility that would be caused by nonrenewal of the PHE stands in contrast to CMS’s earlier indication that it would likely adopt a “glide path” when removing the temporary flexibilities. In addition, CMS is exploring making certain regulatory flexibilities permanent; though, any glide path process is yet to be determined, and extension of the PHE remains pending.
Again, given the current status of the COVID-19 pandemic, we expect that further extension of the PHE is very likely to occur. Nonetheless, health care providers should be aware that there may be a technical expiration of the PHE if it is not formally extended on or before July 25, 2020. Likewise, we recommend affected entities closely monitor whether the expected forthcoming extension results in any substantive changes to the future availability of waivers.