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Health Care Provisions in the CARES Act Health Care Provisions in the CARES Act

Health Care Provisions in the CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law by the President on March 27, 2020, after it was passed by the Senate and the House of Representatives earlier in the week. Generally, the health care related provisions in the CARES Act are found in Title III of the CARES Act, which is titled Supporting America’s Health Care System in the Fight Against Coronavirus and is comprised of two parts: Part I addresses drug and medical device supply shortages and Part II addresses access to health care for COVID-19 patients. A brief summary of each provision of Part I and Part II is contained below.
 
Part I — Addressing the Supply Shortage

Key Provisions in Subpart A - Medical Products Supply
  • Within 60 days of the law going into effect, the Department of Health and Human Services (HHS) will execute an agreement with the National Academies of Sciences, Engineering, and Medicine (the National Academies) to analyze the United States' dependence on critical drugs manufactured outside the United Sates and provide recommendations to mitigate risks associated with a decentralized supply of drugs. In developing its recommendations, the National Academies must consider input from HHS, Department of Homeland Security, Department of Defense, Department of Veteran Affairs, Department of Justice, other applicable federal agencies and other relevant industry stakeholders.
  • The Public Health Services Act is amended so:
    • the strategic national stockpile now includes personal protective equipment, ancillary medical supplies, and other applicable supplies required for the administration of drugs, vaccines and other biological products, medical devices, and diagnostic tests in the stockpile; and
    • a respiratory protective device is included as a covered countermeasure (being classified as a covered countermeasure provides immunity from liability for any loss caused, arising out of, relating to, or resulting from administration or use of such countermeasure).
Key Provisions in Subpart B - Mitigating Emergency Drug Shortages
  • The Food, Drug, and Cosmetic Act is amended so that:
    • for situations when there is a discontinuance or interruption in the production of life-saving drugs, the FDA shall (rather than may) expedite and prioritize (rather than just expedite) the review of new drug applications and abbreviated new drug applications, which could mitigate or prevent the shortage;
    • the FDA can declare a particular drug critical to the public health and it will then require the manufacturer to notify FDA of any discontinuance or interruption in the manufacture of such drug;
    • notification to FDA of drug shortages now also includes any discontinuance of an active pharmaceutical ingredients (API) and such notifications for either a drug or API must include a reason for the shortage;
    • each manufacturer of a critical drug or API must create a redundancy risk management plan that identifies and evaluates risks to the supply of such drug or API and, as applicable, for each establishment in which the drug or API is manufactured;
    • FDA must notify CMS every 90 days of any drug shortages that have been reported;
    • inspection reports for facilities that have reported critical drug or API shortages must also be sent to appropriate FDA offices that have expertise in drug shortages; and
    • drug and API manufacturers (foreign and domestic) who are required to register with FDA must now annually (or when requested by FDA during a public health emergency) provide FDA with the amount of each drug or API it has manufactured for commercial distribution (some biological products or categories of biological products may be exempt from this reporting requirement if FDA determines such reporting is not necessary to protect the public health).
Key Provisions in Subpart C - Preventing Medical Device Shortages
  • The Food, Drug, and Cosmetic Act is amended so that:
    • manufacturers of medical devices that are critical to public health during a public health emergency (including devices that are life-supporting, life-sustaining, or intended for use in emergency medical care or during surgery; or for which FDA determines that information on potential meaningful supply disruptions of such medical device is needed during, or in advance of, a public health emergency) must notify FDA within six months of a permanent discontinuance or interruption of the manufacturing of such medical devices (the notice must include the reason for the interruption);
    • FDA will notify interested parties such as physicians, health providers, patient organizations, and supply chain partners of such interruptions; and
    • in the event of an interruption to the supply of a critical medical device, FDA will prioritize and expedite: (i) the review of any pre-market applications or pre-market notifications for a medical device that could help mitigate or prevent such shortages and (ii) the inspection of an establishment that could help mitigate or prevent such shortages.
Part II — Access to Health Care for COVID-19 Patients

Key Provisions in Subpart A - Coverage of Diagnostic Testing for COVID-19
  • For the duration of the public health emergency declared by the Department of Health and Human Services (HHS) on January 31, 2020, group health plans and health insurance issuers offering group or individual health plans are required to provide coverage for: (i) diagnostic testing products and laboratory services for the testing of the COVID-19 virus or the SARS-CoV-2 virus and (ii) any items or services furnished to an individual in a provider's office, urgent care center, or emergency room that result in an order for COVID-19 testing, but only to the extent the services or items relate to the administration of or the evaluation for the need for the test. Health plans may not impose any cost-sharing amounts (copays and deductibles), prior authorization, or other medical management requirements on the provision of such items, products, or services.
  • With respect to the products, items, and services outlined above, health insurers must reimburse providers at previously negotiated rates of reimbursement or, if none, in an amount that equals the cash price for the items, products, and services listed by the provider on a public internet website. Each provider of tests for the COVID-19 virus must publish the price for testing on its website or face potential civil monetary penalties of up to $300 per day imposed by HHS.
  • Health insurance providers will be required to provide coverage to their enrollees for any "qualifying coronavirus preventive service" beginning 15 business days after the date a recommendation is made about the preventive service. A "qualifying coronavirus preventive service" is one that has either an "A" or "B" rating from the United States Preventive Services Task Force or is an immunization that has a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention.
Key Provisions in Subpart B - Support for Healthcare Providers
  • An additional amount of $1.32B in 2020 is appropriated for supplemental awards to health centers for the detection, prevention, diagnosis, and treatment of COVID-19.
  • Changes are made to grant programs for telehealth network and telehealth resource centers, including the appropriation of $29M per year for years 2021-2024 and extension of the grant award period for an additional year.
  • The period for grants for rural health care services outreach, rural health network development, and small health care provider quality improvement programs is extended for an additional two years and $79.5M is appropriated for these grants from 2021 through 2025.
  • The Commission Corps and the Ready Reserve Corps are to provide services in times of public health as well as national emergencies.
  • The Secretary of HHS is authorized to assign National Health Service Corps members to provide health services at locations and during such times as the Secretary deems necessary during the public health emergency.
  • For the period beginning as of the date of the enactment of the CARES Act through the remainder of the Public Health Emergency declared by HHS on January 31, 2020, certain limitations on the liability of volunteer health care professionals providing services related to the diagnosis, prevention, or treatment of COVID-19 in response to the public health emergency. Such volunteers are not liable under federal or state law for any harm caused by an act or omission of the volunteer health care professional if the act or omission occurs in the course of providing health care services that are within the scope of the individual's license and with the good faith belief that the patient is in need of health care services. This limitation on liability is not effective if the harm was caused by the health care professional's willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious flagrant indifference to the rights or safety of the individual harmed or if the volunteer was under the influence of drugs or alcohol.
Key Provisions in Subpart C - Miscellaneous Provisions
  • The ability of covered entities, business associates, and program providers to use and disclosure records pertaining to the identity, diagnosis, prognosis, or treatment of patients related to substance abuse education, prevention, treatment, rehabilitation, or research which is conducted, regulated, or indirectly or directly assisted by the federal government is expanded so that once patient consent is given, these entities may use or disclose the records for treatment, payment, or health care operations as permitted by HIPAA.
  • Definitions to Section 543 of the Public Health Service Act are added to be consistent with those in HIPAA and the disclosure of de-identified information from substance abuse records is permitted without further consent from the patient.
  • The HIPAA Breach Notification Rule is extended to apply to substance abuse records.
  • Discrimination in access to health care, employment, housing, courts, and social services and benefits provided by governmental agencies based on substance abuse information is prohibited.
  • Permits a state agency or an area agency on aging to transfer, without prior approval, up to 100% of its funds received as appropriations for congregate and home delivered meal services to older Americans for use as the state or area agency considers appropriate to meet the needs of the area served. 
  • Waives the nutritional requirements for home delivery meals during the public health emergency and expands home delivery eligibility to those older Americans who are unable to obtain nutrition because they are practicing social distancing due to the emergency.
  • Requires the Secretary of HHS to issue guidance within 180 days on the sharing of COVID-19 related protected health information during the public health emergency.  This guidance is to include information on compliance with the HIPAA regulations and any applicable policies that may be put into place during a public health emergency.
  • Appropriates $122.5M for fiscal years 2020 through 2024 to the Healthy Start grant program.
  • HHS is required to establish a national blood donation awareness campaign.
For more information about the health care related provisions of the CARES Act, contact Taryn Stone at Taryn.Stone@icemiller.com, James Banister at james.banister@icemiller.com, or Margaret Emmert at margaret.emmert@icemiller.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
 
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