March 12, 2020
Amid the developments related to COVID-19, many Virginia hospitals are seeking guidance on how to accommodate a surge of patients while staying in compliance with hospital licensure and Medicare certification requirements. Given that these situations evolve quickly, we have outlined the following guidance on how hospitals should manage surge capacity situations.
LICENSING—VIRGINIA DEPARTMENT OF HEALTH
The Virginia Department of Health (“VDH”) allows a hospital to add inpatient beds to its licensed bed capacity on a temporary basis to accommodate short-term influxes in a hospital’s patient census. VDH requires that hospitals have an effective protocol in place describing the steps the hospital will take to get the census back under its licensed bed count (i.e., which patients will be discharged first, etc.). The use of surge capacity is only permitted in non-routine, short term situations (i.e., up to a week or ten days). VDH requests that a notice be submitted when a surge capacity scenario occurs. The notice should list the steps being taken to alleviate the surge in census and how long the hospital anticipates the surge will last. However, as discussed below, Medicare-certified hospitals should be wary of increasing bed capacity within the hospital until CMS has granted a Section 1135 waiver as discussed below. For example, a Medicare-certified Critical Access Hospital (“CAH”) should not operate more than 25 beds prior to being granted a Section 1135 waiver removing the CAH Condition of Participation (“CoP”) related to bed count.
MEDICARE CERTIFICATION—SECTION 1135 WAIVERS
Importantly, certified hospitals must operate under normal CMS imposed rules and regulations, unless they have been granted a Section 1135 waiver. Section 1135 of the Social Security Act authorizes the Secretary of the Department of Health and Human Services (the “Secretary”) to waive or modify certain requirements related to the CoPs, certification requirements, EMTALA and limitations on payments for health care items and services, in times of emergency. However, before the Secretary may grant Section 1135 waivers, two conditions must be present:
- The President must declare an emergency or disaster, and
- The Secretary must declare a Public Health Emergency.
Health and Human Services Secretary, Alex M. Azar, II, has already declared a public health emergency for the entire United States retroactive to January 27, 2020. As of today’s date (March 12, 2020), President Trump has not yet declared an emergency or disaster; however, several reports state that a declaration is forthcoming.
CMS will determine the extent to which waivers will be granted for a particular hospital, or to a group or class of hospitals, or to a geographic area. Decisions to grant waivers or modifications related to bed capacity may be made during or after each emergency or disaster—waivers that are granted after the emergency or disaster can be retroactive to the beginning of the emergency or disaster. Once the necessary declarations have been made, hospitals may submit requests for a waiver to either the State Survey Agency or CMS Regional Office. Although these requests can be made over the phone, we strongly recommend sending written communication to the State or CMS Regional Office. Hospitals are instructed by CMS to furnish all pertinent facts concerning the hospital, the particular situation, and how it would operate under the particular waiver it is seeking. Section 1135 waivers typically end at the expiration of the emergency period, or 60 days from the date the waiver is first published, although the Secretary may extend the waiver period, if necessary. Hospitals are expected to come into compliance related to bed capacity prior to the end of the emergency period.
If you have any questions or need further guidance regarding Section 1135 waivers, please contact a member of Hancock Daniel’s Accreditation and Certification Surveys or Licensure, Certification and Enrollment teams.
The information contained in this advisory is for
general educational purposes only. It is presented with the understanding that
neither the author nor Hancock, Daniel & Johnson, P.C., is offering any
legal or other professional services. Since the law in many areas is complex
and can change rapidly, this information may not apply to a given factual
situation and can become outdated. Individuals desiring legal advice should
consult legal counsel for up-to-date and fact-specific advice. Under no
circumstances will the author or Hancock, Daniel & Johnson, P.C. be liable
for any direct, indirect, or consequential damages resulting from the use of
 Typically, hospital bed increases would involve Certificate of Public Need (“COPN”) review. However, effective July 1, 2019, temporary increases in the total number of beds in an existing hospital are exempt from the COPN process when the Commissioner of Health has determined that a natural disaster has caused the evacuation of a hospital or nursing home and that a public health emergency exists due to a shortage of hospital or nursing home beds. Although the temporary exemption may not last for more than 30 days, we would expect emergency legislation to extend this period should the need for an increase in beds continue past the initial 30 days. While the language of the 2019 legislation is not relevant to the COVID-19 public health emergency, the new law is consistent with the VDH’s historic position on surge capacity in emergency situations.