The HealthSec Blog

May 11, 2023, signified the end of the federal government's COVID-19 Public Health Emergency. This conclusion, while indicating progress, ushers in a new era filled with different challenges for hospitals and health systems in the United States.

As Mark Howell, the American Hospital Association’s director of policy, eloquently puts it, "Our members are ready to go; they've been preparing for this moment... But like anything else, there will be some growing pains and some challenges, I think, as everyone tries to get a feel for this new normal.”

Changes in Funding and its Repercussions

With the end of the emergency designation, the funding landscape for hospitals will undergo a significant transformation. During the emergency, hospitals benefited from additional Medicare funding for treating COVID-19 patients. This funding included a 20% “add on” for patients diagnosed with COVID-19. However, this policy will no longer be in effect with the conclusion of the emergency designation.

Gina Bertolini, a partner with K&L Gates specializing in health law, emphasizes the gravity of this funding change: “This has been a hard year and a half or two years for hospitals from a bottom line perspective,” Bertolini says. “So I think, absolutely, the bump in reimbursement is a critical issue.”

The financial implications are especially concerning given the ongoing treatment of thousands of COVID-19 patients.

Continuation of Telehealth

As the emergency designation concludes, some telehealth provisions that were nearing their end have been granted an extension until November 2023. This extension, particularly relevant for the remote prescription of controlled substances, offers some solace to healthcare providers. The Drug Enforcement Administration (DEA) has extended these provisions to ensure patient access to medication while concurrently preventing potential abuse or "problematic prescribing" of controlled substances.

Furthermore, in December 2022, Congress approved a two-year extension for most telehealth waivers as part of a $1.7 trillion spending package. This move ensures that providers can continue telehealth services through the end of 2024. Despite these extensions, the healthcare industry is advocating for permanent telehealth reforms, recognizing the undeniable value and accessibility benefits of telehealth, particularly for rural or underserved populations.

Challenges for Rural Hospitals

Rural hospitals have faced long-standing challenges even before the pandemic, including financial instability, workforce shortages, and a higher percentage of patients who are older, have chronic conditions, and are uninsured or underinsured. The COVID-19 Public Health Emergency brought about some temporary changes aimed at helping these hospitals manage these challenges. However, with the end of the emergency designation, some of these policies will expire, potentially exacerbating existing difficulties.

During the COVID-19 emergency, rural providers designated as Critical Access Hospitals (CAHs) were given some flexibility that will cease with the end of the emergency. For instance, they could exceed the usual limit of 25 beds. Post the emergency period, the 25-bed limit is back in effect.

More importantly, the end of the emergency period sees the return of the requirement for an average length of stay of no more than 96 hours. As Howell notes, "We're not entirely sure how much sense it makes to keep that in place moving forward. We've advocated for an extension of that waiver of the 96-hour rule and we're going to continue to do so."

This rule can particularly impact rural hospitals that often lack the resources to transfer patients needing longer-term care to more equipped facilities. The strict limit can also impede the hospital's ability to provide comprehensive care for patients with complex needs.

The Nursing Home Quandary

The end of the COVID-19 Public Health Emergency brings with it changes that will significantly affect nursing homes and their operations.

During the public health emergency, hospitals were not required to house patients for at least three days before they could be discharged to a skilled nursing facility. This flexibility allowed for more efficient patient flow from hospitals to nursing homes, helping manage hospital capacity during the pandemic's peaks.

With the end of the emergency designation, the three-day rule is back in effect. This change could complicate discharge planning for hospitals and potentially delay the transition of patients to nursing homes. As Howell explained, "Anytime you increase the requirements around when someone can be discharged from a facility when we're running into the issues we're running into now, certainly, it doesn't make it any easier.”

Additionally, nursing homes have been particularly hard hit by staffing shortages during the pandemic, a situation exacerbated by the high stress and risk associated with COVID-19. The end of the public health emergency will not immediately resolve this issue, meaning nursing homes may continue to struggle to provide adequate care even as they potentially receive more patients due to the reinstatement of the three-day rule.

With the reinstatement of the three-day rule, nursing homes may see an increase in patient admissions. However, without a corresponding increase in resources or staffing, they may struggle to provide the necessary care for these additional patients. This could further strain an already beleaguered system and potentially impact the quality of care provided to residents.

A Return to Rigid Discharge Planning

The discharge planning process is vital in ensuring a smooth transition from hospital care to home or other care settings such as skilled nursing facilities. During the COVID-19 Public Health Emergency, hospitals were given more flexibility in discharge planning, which significantly streamlined patient flow and helped manage hospital capacity. However, with the end of the emergency designation, hospitals will face more rigid rules that could affect patient care continuity and hospital operations.

Before the pandemic, discharge planning involved a set of regulated steps, including evaluating a patient's needs, discussing post-hospital care options with the patient and their family, and arranging for the necessary post-hospital services. The process was often complicated by regulations requiring hospitals to present patients with a comprehensive list of all available skilled nursing facilities or home health agencies, regardless of their specific needs, insurance coverage, or geographical location.

During the public health emergency, hospitals were allowed to adopt a more flexible, patient-centered approach to discharge planning. They could provide information and choices based on the individual patient's needs and preferences, making the process more efficient and less overwhelming for patients.

With the end of the emergency designation, however, hospitals will have to revert to the traditional discharge planning process. As Howell noted, "Rather than flood patients with an overwhelming amount of information that may not be relevant to their needs, hospitals should be able to personalize discharge planning for the needs of patients. It is one of the things that we've seen, even prior to the public health emergency, as a pretty significant level of burden that's not providing the level of benefit necessary.”

The return to traditional discharge planning rules could have several impacts. For patients, it could mean receiving a large amount of information that may not be relevant or helpful, potentially causing confusion and stress. For hospitals, it could mean a more time-consuming discharge planning process, potentially slowing patient flow and increasing the likelihood of hospital bed shortages.

Furthermore, more rigid discharge planning rules could also delay patient transitions from hospitals to other care settings, such as skilled nursing facilities or home health care. With the reinstatement of the three-day rule requiring patients to be housed in the hospital for at least three days before being discharged to a skilled nursing facility, these delays could exacerbate issues around hospital capacity and patient flow.

The Uncertainty of Medicaid Enrollment

As the Public Health Emergency concludes, one of the most significant impacts revolves around Medicaid enrollment. During the health crisis, Congress required states to keep people enrolled in Medicaid until the end of the public health emergency. This mandate significantly expanded the number of people covered, providing much-needed health security during a time of global uncertainty.

However, with the end of the emergency designation, the requirement for continuous enrollment has been lifted. As a result, states are now beginning to tighten eligibility requirements, potentially leading to a substantial reduction in the number of people covered by Medicaid. Federal officials have projected that millions could lose their coverage.

The Kaiser Family Foundation estimates that between 5 million to 14 million Americans could end up losing Medicaid coverage, creating a potential healthcare crisis for vulnerable populations.

The consequences of this rollback can be severe. As Howell notes, "So far, hospitals aren’t seeing a large influx of patients without coverage yet, but we project health systems could be seeing more people without Medicaid coverage in four to six months." This reduction in coverage could lead to a higher number of uninsured patients seeking care, potentially straining healthcare resources and leading to higher uncompensated care costs for hospitals.

Ensuring Access to COVID-19 Treatments and Vaccines

Despite the end of the public health emergency, the Department of Health & Human Services (HHS) reassures Americans that COVID-19 vaccines will continue to be available at no cost. The HHS is also working to ensure that COVID-19 treatments, such as Paxlovid and Lagevrio, remain widely accessible.

Moving Forward

As the COVID-19 Public Health Emergency ends, it is clear that healthcare providers in the United States are facing a new set of challenges. Yet, the experiences and learnings from the pandemic have equipped them with resilience and adaptability. It's essential to remember, as Howell aptly states, "While there will be challenges and growing pains, we've learned a lot in the last two years. We are stronger, more resilient, and more prepared than ever to face this new chapter.”

The end of the Public Health Emergency is not the end of the journey but the beginning of a new phase in the continuous pursuit of excellent patient care. As healthcare providers navigate these changing tides, collaboration, innovation, and patient-centricity will be their guiding stars.

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