Section 1135 Waivers – Emergency and Disaster-Related Modifications to Federal Requirements

March 13, 2020

In the event of a disaster or emergency, like the COVID-19 pandemic, Section 1135 of the Social Security Act (the “Act”) allows for the waiver of certain federal requirements to ensure sufficient health care items and services are available to meet the increased need of beneficiaries. The authority granted to the Secretary of the Department of Health and Human Services (the “Secretary”) allows him to waive or modify certain Medicare, Medicaid, Children’s Health Insurance Program (“CHIP”), and Health Insurance Portability and Accountability Act (“HIPAA”) requirements. The Secretary’s authority under Section 1135 hinges on two pre-requisites. First, the President must have declared an emergency or disaster under the Stafford Act or National Emergencies Act. Second, the Secretary must have declared a Public Health Emergency under Section 319 of the Public Health Service Act. As of March 13, 2020, both of the required declarations have been issued. Following the issuance of both of these declarations, the Secretary now may authorize waivers and modifications under Section 1135. The Secretary typically delegates the implementation of Section 1135 to the Administrator of the Centers for Medicare and Medicaid Services (“CMS”).

Under Section 1135, the Secretary may elect to temporarily waive or modify requirements (collectively, “Section 1135 Waivers”) regarding:

  1. Conditions of participation or other certification requirements for an individual provider or type of provider;
  2. Program participation and similar requirements for an individual provider or type of provider;
  3. Pre-approval requirements;
  4. Requirements that physicians and other health care professionals be licensed in the state in which they provide services, if they have equivalent licensing in another state and are not excluded from practice in that state or any state a part of which is included in the emergency area;
  5. Actions under the Emergency Medical Treatment and Labor Act (“EMTALA”) regarding:
    1. transfer of an individual who has not been stabilized (if the transfer arises out of the circumstances of the emergency);
    1. direction or relocation of an individual to receive medical screening at an alternative location in accordance with an applicable state preparedness plan.
  6. Sanctions for violations of Stark rules under Section 1877 of the Act;
  7. Deadlines and timetables for performance of required activities (may be modified, not waived);
  8. Limitations on the ability to make direct payments to providers for services provided to Medicare Advantage enrollees;
  9. Sanctions and penalties for noncompliance with certain patient privacy provisions of HIPAA.

Section 1135 Waivers are limited in scope to the emergency area and emergency period as defined in the declarations from the President and the Secretary. Providers must resume compliance with all rules and regulations as soon as possible, no later than the expiration of the emergency period. Further, EMTALA and HIPAA waivers are typically limited to a 72-hour period. However, EMTALA waivers may be effective until the end of an emergency period when the emergency involves a pandemic infectious disease.

Providers are directed to seek Section 1135 Waivers as the need arises, rather than prospectively. Once a provider has identified the need for a waiver or modification under one or more of the requirements listed above, a request can be made to the respective CMS Regional Office, with a copy to the State Survey Agency. The requesting provider should provide all relevant facts regarding its request and why a waiver is warranted, as well as describing how it will operate if the particular waiver is approved. Health systems may make requests on behalf of several facilities, however specific information regarding each facility must be included to justify the request. Section 1135 Waivers can be approved effective retroactively to the beginning of the emergency period. CMS anticipates that responses to waiver requests will be issued within three business days. There may also be instances where the Secretary and the Administrator of CMS determine that a blanket waiver is appropriate covering providers in the emergency area. Any blanket waiver will be posted on the CMS website.

Hancock Daniel is prepared to assist in the preparation of requests for Section 1135 Waivers. Our COVID-19 Taskforce will advise and assist providers in working through the process outlined above and all concerns arising from the pandemic.

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 this material.

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