PYA Covid-19 Information Hub
Published March 18, 2020

How CMS COVID-19 Emergency Waivers Impact Providers

UPDATE REGARDING WAIVERS: Late on March 30, an Interim Final Rule, updated Section 1135 waivers, and Stark Law blanket waivers were published. We are working diligently to update our content regarding these matters.

In declaring a national emergency relating to the COVID-19 pandemic on March 13, President Trump stated:

Emergency orders I’m issuing today will also confer broad new authority to the secretary of health and human services. The secretary of H.H.S. will be able to immediately waive provisions of applicable laws and regulations to give doctors and all hospitals and health care providers maximum flexibility to respond to the virus and care for patients.[1]

In fact, the Secretary’s waiver authority under existing law is relatively limited; congressional action would be required to significantly alter Medicare and Medicaid rules even in the face of a pandemic. Also, the waivers have no impact on state rules with which providers must comply.

Here, we explain the action taken thus far under Section 1135 of the Social Security Act–the source of the Secretary’s emergency waiver authority–and its impact on healthcare providers as they serve on the front lines in the COVID-19 pandemic.

Section 1135 Waivers

As a first step, HHS Secretary Alex Azar formally invoked the Section 1135 waiver authority by order dated March 13, retroactively effective to March 1.  This action permits the Centers for Medicare & Medicaid Services (CMS) to implement blanket waivers (i.e., waivers that apply automatically to all providers) and to approve individual waiver requests made by states and providers, as the agency deems necessary, to prevent gaps in access to care for impacted beneficiaries.

Under Section 1135, however, CMS may only waive the following program requirements:

  1. Conditions of participation or other certification requirements.
  2. Program participation and similar requirements.
  3. Pre-approval requirements.
  4. Requirements that health professionals be licensed in the State in which they provide services, subject to specific limitations.
  5. EMTALA requirements as they relate to (a) the transfer of an individual who has not been stabilized, provided the transfer arises out of the circumstances of the emergency; and (b) the direction or relocation of an individual to receive medical screening at an alternative location in accordance with a State preparedness plan.
  6. Sanctions for violations of Stark rules.
  7. Deadlines and timetables for performance of required activities (may be modified but not waived).
  8. Limits on payments for services furnished to individuals enrolled in a Medicare Advantage plan by health care professionals or facilities not included in the plan’s network.
  9. Sanctions and penalties for noncompliance with certain HIPAA patient privacy provisions.
  10. The three-day prior hospital stay requirement for coverage for a skilled nursing facility stay.

Blanket Waivers

On March 13, CMS released its COVID-19 Emergency Declaration Health Care Provider Fact Sheet on its approved blanket waivers for the COVID-19 pandemic. CMS subsequently issued a MLN Matters® Special Edition Article providing additional detail regarding the approved blanket waivers. These waivers are similar in scope to those CMS has approved for prior emergencies, including the H1N1 pandemic in 2009 and 2010. These waivers now are in effect for all providers regardless of location.

For any claim that would not be reimbursable in the absence of a waiver, a provider must apply the following:

“DR” (disaster related) condition code for institutional billing (i.e., claims submitted using the ASC X12 837 institutional claims format or paper Form CMS-1450)

“CR” (catastrophe/disaster related) modifier for Part B billing, both institutional and non- institutional (i.e., claims submitted using the ASC X12 837 professional claim format or paper Form CMS-1500 or, for pharmacies, in the NCPDP format).

Skilled Nursing Facilities (SNFs). Medicare will pay for SNF stays without a prior three-day hospital stay but only for those beneficiaries who need to be transferred due to the COVID-19 pandemic. Also, for certain beneficiaries who recently exhausted their SNF benefits, the SNF blanket waiver authorizes renewed SNF coverage without first having to start a new benefit period. Finally, CMS is providing relief to SNFs on deadlines for Minimum Data Set assessments and transmission.

Critical Access Hospitals (CAHs). In response to the emergency, a CAH may admit in excess of 25 patients and may maintain an individual as an inpatient for more than 96 hours.

Home Health Agencies (HHAs). CMS has relieved the timeframes related to OASIS Transmission and permitted Medicare Administrative Contractors (MACs) to extend the auto-cancellation date of Requests for Anticipated Payment.

Care for Acute Care Patients in Excluded Distinct Part Units. An acute care hospital faced with capacity issues due to the emergency may house acute care inpatients in the hospital’s excluded distinct part units, provided those beds are appropriate for acute care.

Care for Excluded Inpatient Psychiatric Unit Patients in Acute Care Beds. If necessitated by the emergency, a hospital with an excluded distinct part inpatient psychiatric unit may relocate an inpatient from that unit to an acute care bed, but only if the hospital determines such bed is safe and appropriate for the psychiatric patient.  In these cases, the hospital should continue to bill for inpatient psychiatric services under the inpatient psychiatric facility prospective payment system.

Care for Excluded Inpatient Rehabilitation Unit Patients in the Acute Care Beds. Similarly, a hospital with an excluded distinct part inpatient rehabilitation unit may relocate an inpatient from that unit to an acute care bed, but only if the hospital determines such bed is safe and appropriate for the patient and the patient continues to receive intensive rehabilitation services.  In these cases, the hospital should continue to bill for inpatient rehabilitation services under the inpatient rehabilitation facility prospective payment system.

Care for Patients in Long-Term Acute Care Hospitals (LTCHs). CMS will exclude those patient stays where an LTCH admits or discharges patients to meet emergency demands in determining compliance with the LTCH 25-day average length-of-stay requirement.

Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Suppliers.  CMS has given MACs the authority to waive replacement requirements (the face-to-face requirement, a new physician’s order, and new medical necessity documentation) in those cases in which a beneficiary’s DMEPOS is lost, destroyed, irreparably damaged, or otherwise rendered unusable or unavailable as a result of the emergency. Suppliers still must include on the claim a narrative explanation of the reason why the DMEPOS must be replaced.

Replacement Prescription Fills for Part B Drugs. Medicare will pay for replacement prescription fills (for a quantity up to the amount originally dispensed) of covered Part B drugs if the dispensed medication has been lost or otherwise rendered unusable or unavailable due to the emergency.

State Licensure. CMS has waived Medicare and Medicaid requirements that a physician or non-physician practitioner must be licensed in the state in which he or she is furnishing services, provided the physician or non-physician practitioner (1) possesses a valid license to practice in the state which relates to his or her Medicare enrollment, (2) is not affirmatively excluded from practice in any state, and (3) has traveled to the state in which the emergency is occurring to contribute to relief efforts in his or her professional capacity. To date, CMS has not advised if or how this waiver applies to the provision of telehealth services.[2]

Medicare Provider Enrollment. To facilitate Medicare provider enrollment during the emergency, CMS will establish a toll-free hotline for non-certified Part B suppliers, physicians, and nonphysician practitioners to enroll and receive temporary Medicare billing privileges. CMS also is waiving certain enrollment screening requirements.

Medicare Appeals. Finally, CMS is making temporary changes to the Medicare appeals process, including extending the period in which to file an appeal, waiving timeliness for requests for additional information to adjudicate the appeal, processing appeals even with incomplete Appointment of Representation forms (but communicating only to the beneficiary), and processing requests for appeal that do not meet the required elements using information that is available.

Blanket Waivers – HIPAA.

Effective March 15, HHS has exercised its authority to waive sanctions and penalties against a covered hospital that does not comply with the following provisions of the HIPAA Privacy Rule:

  1. The requirements to obtain a patient’s agreement to speak with family members or friends involved in the patient’s care.
  2. The requirement to honor a request to opt out of the facility directory.
  3. The requirement to distribute a notice of privacy practices.
  4. The patient’s right to request privacy restrictions.
  5. The patient’s right to request confidential communications.

The waiver, however, only applies to a hospital that has instituted a disaster protocol, and only for up to 72 hours from the time the hospital implements its disaster protocol.

In its COVID-19 & HIPAA Bulletin, HHS explains that even without a waiver, the HIPAA Privacy Rule always allows patient information to be shared for specific purposes and under the specific conditions.  The bulletin addresses disclosures for treatment; for public health activities; to family, friends, and others involved in an individual’s care and for notification; to prevent or lessen a serious and imminent threat; and to the media or others not involved in the care of the patient/notification.  The bulletin also includes reminders regarding the minimum necessary rule and safeguarding patient information.

Requests for Waivers.

In addition to blanket waivers, CMS has the authority to approve waiver requests from states and individual healthcare providers and associations, provided such requests are within the scope of the agency’s authority under Section 1135. On March 17, CMS approved the first individual request for COVID-19 emergency waivers from the state of Florida relating to its Medicaid program.

CMS is moving rapidly to reduce regulatory obstacles, to the extent the agency has the authority to do so. PYA will provide regular updates regarding waiver developments throughout the COVID-19 national emergency.

If you have questions related to COVID-19 waivers, telehealth reimbursement information, or would like assistance with any matter involving reimbursement, strategy and integration, compliance, or valuation, contact a PYA executive below at (800) 270-9629.


[1] Transcript available at

[2] These requirements are not detailed in CMS’ publications regarding the COVID-19 emergency waivers, but appear in the referenced Section 1135 waiver guidance published in March 2019, available at

Disclaimer: To the best of our knowledge, this information was correct at the time of publication. Given the fluid situation, and with rapidly changing new guidance issued daily, be aware that some or all of this information may no longer apply. Please visit our COVID-19 hub frequently for the latest updates, as we are working diligently to put forth the most relevant helpful guidance as it becomes available.

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