Preparing Your Revenue Cycle for the End of the PHE

March 28, 2023 By: Quadax

Minimize disruption to your cash flow by ensuring patient eligibility.

More than three years after the COVID-19 public health emergency (PHE) was declared in January 2020, the PHE is now set to end on May 11, 2023, and with it, emergency declarations and waivers that were implemented granting flexibilities to state Medicaid operations and most healthcare providers. When the PHE ends, so do the relaxed guidelines for health insurers, Medicaid, and states. And those that have relied on some of those flexibilities over the past few years are now scrambling to ensure minimal disruption to their billing and operations. 

Reimbursement for COVID-19 Testing

What is likely the most obvious impact of the PHE ending will be reimbursement cuts for COVID-19 testing. When the PHE ends, Medicare payments for high-throughput molecular COVID-19 testing will drop from $100 per test to $51 per test. Medicare’s 20% add on payments for patients diagnosed with COVID-19 to offset the cost of complex COVID-19 patient care will cease, as will payment amounts set for travel fees and laboratory specimen collection from a homebound or nonhospital inpatient.

The expectation is that private payors will lower COVID-19 test reimbursement, though the exact rates will vary across labs and insurers. Private insurance companies will no longer be required to cover COVID-19 tests without cost sharing. Additionally, the termination of the PHE will bring with it tighter rules around test ordering and, most likely, medical necessity requirements (for example: Medicare will require all COVID-19 and related testing performed by a laboratory to be ordered by a physician or other practitioner). For some labs, it could also mean the end of payor contracts established specifically for COVID-19 testing. Another concern is the revocation of the blanket waivers issued by the Department of Health and Human Services (HHS) to avoid disruptions to lab testing during the PHE. Revocation of the waivers will require labs and their compliance officers to step back and take a hard look at COVID-19 testing arrangements based on the relaxed rules.

Under the PHE, Americans were provided free COVID-19 testing, treatments and vaccines, requiring major changes for healthcare providers and payors. HHS said it is committed to ensuring wide access of COVID-19 vaccines and treatments to whoever needs them, even as the funds for free vaccines and treatment have run out.  Medicare will continue to pay $40 for COVID-19 vaccines administered in outpatient settings through Dec. 31, 2023. And vaccines are covered under Medicare Part B without cost sharing and Medicaid will cover all vaccines without a co-pay or cost sharing through September 2024. Additionally, most private insurance plans will cover vaccines without a co-pay, according to the agency.

Medicaid Redetermination 

Another program impacted by the PHE ending is continuous enrollment for Medicaid members. During the pandemic, Medicaid enrollment increased significantly, and over 91 million people were enrolled in either Medicaid or the Children’s Health Insurance Program (CHIP) as of October 2022. Continuous enrollment allowed members to stay enrolled in the program without a redetermination process due to the shifting socioeconomic landscape that COVID-19 created. The continuous coverage requirement is now ending March 31, and HHS estimates that around 15 million people will lose health benefits as states begin their redetermination processes to evaluate eligibility. 

To mitigate the effects of the Medicaid unwinding process, CMS announced that there will be a Special Enrollment Period (SEP) on the Affordable Care Act (ACA) marketplace to assist individuals who are losing their Medicaid, CHIP or BHP coverage due to the public health emergency unwinding. Of the people losing eligibility, health insurers predict that about two-thirds will enroll in a workplace health plan and the other third will be evenly divided between ACA plans and being left uninsured.

Telehealth Reimbursement 

During the PHE, CMS also increased reimbursement for telehealth services outside the hospital setting, such as in a patient's home, essentially allowing providers to receive the same payment for a telehealth service as they would for an in-person service. That will end with the PHE, thus reducing telehealth reimbursements outside the healthcare setting, prompting some providers to potentially curb their telehealth services or focus more on in-person services. 

What is not changing are telehealth flexibilities for Medicare enrollees. These will remain in place through December 2024. They will also continue for Medicaid enrollees, as states already have flexibility in covering and paying for those services delivered virtually. 

“The impact will vary based on state, patient and payer mix. Fortunately, Congress addressed most of the critical Medicare telehealth waivers in recent legislation (Consolidated Appropriations Act, 2023) by extending these waivers through 2024, which provides some predictability for practices,” Claire Ernst, director of government affairs of the Medical Group Management Association (MGMA), told Health Exec. “It also gives the administration and Congress more time to gather data regarding telehealth utilization, quality outcomes and cost.”

Minimize Revenue Cycle Disruption

As the expiration of the PHE draws near, healthcare providers face a litany of uncertainty. By being proactive and understanding the changes and implications to reimbursement, providers can minimize the potential negative impact on their patients and their own bottom line.

One way to minimize disruption to your revenue cycle is by ensuring patient eligibility. Automated, real-time eligibility checks are a critical step  that help to mitigate denials and optimize revenue capture. Quadax's API-based solutions make determining eligibility and identifying the patient's insurance easier and more efficient, reducing the burden on your personnel and processes, and ultimately improving payment rates and time-to-payment. To get started, contact us to request a strategy call.

Let's take on the revenue cycle together!

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