SPECIAL BULLETIN COVID-19 #15: Medicaid and NC Health Choice Temporary Flexibilities - 1135 Waiver Provisions

Tuesday, March 24, 2020

The Centers for Medicare & Medicaid Services (CMS) has granted NC Medicaid the authority to temporarily modify several Medicaid and NC Health Choice policies retroactive to March 1, 2020, and through the end of federal emergency declaration or when the flexibility is ended by the State or CMS, whichever is first.

In this Medicaid Bulletin are descriptions of the 1135 waiver policy flexibilities:

  • Reimbursement for Medically Necessary Services without Prior Authorization
  • Skilled Nursing Facilities
  • Critical Access Hospitals
  • Durable Medicaid Equipment
  • Hospital Acute Care Units 
    • Care for Excluded Inpatient Psychiatric Unit Patients 
    • Care for Excluded Inpatient Rehabilitation Unit Patients
  • Supporting Care for Patients in Long-term Care Acute Hospitals
  • Home Health Agencies
  • Services Provided in Alternative Settings
  • Temporary Preadmission Screening and Resident Review (PASRR) Procedures

Reimbursement for Medically Necessary Services without Prior Authorization

Effective retroactive to March 1, 2020, North Carolina Medicaid and NC Health Choice will reimburse providers for medically necessary drugs, services, equipment and supplies provided during COVID-19 federal state of emergency declaration without prior authorization (PA). Note that PA remains for surgical and some medical procedures, and for out-of-state transportation. Medical documentation must support medical necessity. In addition, beneficiaries who are out-of-state (OOS), voluntarily or involuntarily, can receive medical care if needed and Medicaid and NC Health Choice will reimburse the OOS provider without prior authorization. OOS providers must be enrolled as North Carolina Medicaid providers in a temporary abbreviated, expedited process during the emergency. See “Special Bulletin COVID-19 #7: Public Health Emergency Enrollment Applications for Health Care Professionals Not Currently Enrolled as an NC Medicaid Provider” for instructions. Providers are encouraged to obtain a prior approval if it is possible to do so (and normally required for the service). All claims are subject to audit.

Skilled Nursing Facilities

Effective retroactive to March 1, 2020, NC Medicaid is waiving the requirement for a 3-day prior hospitalization for coverage of a skilled nursing facility (SNF) stay to provide temporary emergency coverage of SNF services without a qualifying hospital stay and for those people who need to be transferred as a result of the effect the COVID-19 public health emergency. In addition, coverage for certain beneficiaries who recently exhausted their SNF benefits will be renewed without first having to start a new benefit period. NC Medicaid also is waiving the SNF minimum data set assessments and transmission timeframe requirements.

Critical Access Hospitals

Effective retroactive to March 1, 2020, NC Medicaid is lifting the requirements that Critical Access Hospitals limit the number of beds to 25, and that the length of stay be limited to 96 hours.

Durable Medicaid Equipment

Effective retroactive to March 1, 2020, NC Medicaid is allowing suppliers to replace Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) that are lost, destroyed, irreparably damaged or otherwise rendered unusable without first seeking prior authorization, new physician’s orders or other medical necessity documentation. Suppliers must still include a narrative description on the claim explaining the reason why the DMEPOS was replaced, and maintain documentation indicating that the DMEPOS was lost, destroyed, irreparably damaged or otherwise rendered unusable or unavailable as a result of the emergency.

For a list of DMEPOS equipment that temporarily does not require prior authorization due to the COVID-19 public health emergency, see “Special Bulletin COVID-19 #2: General Guidance and Policy Modifications” and  “Special Bulletin COVID-19 #10: Durable Medical Equipment: Temporary Flexibilities Effective March 23, 2020.

Hospital Acute Care Units 

Care for Excluded Inpatient Psychiatric Unit Patients. Effective retroactive to March 1, 2020, NC Medicaid is providing acute care hospitals with the flexibility to relocate patients from the excluded inpatient psychiatric unit to an acute care bed and unit. The hospital should continue to bill for inpatient psychiatric services under the Inpatient Psychiatric Facility Prospective Payment System for such patients and annotate the medical record to indicate the patient is a psychiatric inpatient being cared for in an acute care bed because of capacity or other circumstances related to the COVID-19 public health emergency. 

This flexibility applies where the hospital’s acute care beds are appropriate for psychiatric patients and the staff and environment are conducive to safe care. For psychiatric patients, this includes assessment of the acute care bed and unit location to ensure those patients at risk of harm to self and others are safely cared for.

Care for Excluded Inpatient Rehabilitation Unit Patients. Effective retroactive to March 1, 2020, NC Medicaid is providing acute care hospitals with the flexibility relocate patients from the excluded inpatient rehabilitation unit to an acute care bed and unit. The hospital should continue to bill for inpatient rehabilitation services under the Inpatient Rehabilitation Facility Prospective Payment System for such patients and annotate the medical record to indicate the patient is a rehabilitation inpatient being cared for in an acute care bed because of capacity or other circumstances related to the COVID-19 public health emergency. This flexibility applies where the hospital’s acute care beds are appropriate for providing care to rehabilitation patients and such patients continue to receive intensive rehabilitation services. 

Inpatient rehabilitation facilities (IRFs) may exclude patients from the hospital or unit’s inpatient population to calculate the applicable thresholds associated with the requirements to receive payment as an IRF (“60 percent rule”) if an IRF admits a patient solely to respond to the emergency and the patient’s medical record properly identifies the patient as such. In addition, during the federal COVID-19 state of emergency declaration, this flexibility applies to facilities in the process of obtaining classification as an IRF.

Supporting Care for Patients in Long-term Care Acute Hospitals

Effective retroactive to March 1, 2020, NC Medicaid is allowing long-term care hospitals (LTCHs) to exclude patient stays related to the COVID-19 public health emergency when calculating the 25-day average length of stay requirement. 

Home Health Agencies

Effective retroactive to March 1, 2020, NC Medicaid is waiving timeframes for home health agencies related to Outcome and Assessment Information Set (OASIS) transmission. Contractors are also allowed to extend the auto-cancellation date of Requests for Anticipated Payment (RAPs) during the COVID-19 public health emergency. See “Special Bulletin COVID-19 #5: Private Duty Nursing and Home Health Updates” for additional flexibilities for home health services.

Services Provided in Alternative Settings

Effective retroactive to March 1, 2020, NC Medicaid will reimburse facilities for services rendered in an unlicensed facility (where an evacuating facility continues to render services) due to the COVID-19 public health emergency. Facilities include nursing facilities, intermediate care facilities for individuals with intellectual and developmental disabilities (ICF/IDDs), psychiatric residential treatment facilities (PRTFs) and hospital nursing facilities. The evacuating facility will be responsible for determining how to reimburse the unlicensed facility. After the initial 30 days, the unlicensed facility will be required to either seek licensure or the evacuating facility will need to seek new placement for the individuals. 

Temporary Preadmission Screening and Resident Review (PASRR) Procedures 

Effective March 25 through April 24, 2020, NC Medicaid will not require Level I and II Preadmission Screening and Resident Reviews (PASRRs) for new admissions for 30 days during the COVID-19 public health emergency. If the individual is expected to remain in the nursing facility for more than 30 days, a notice of the need for a PASRR review should be submitted through NCMUST. In addition, individuals transferred from one nursing facility to another nursing facility as a result of COVID-19 will not be considered a new admission and will not need a PASRR. The transferring nursing facility must ensure that all copies of the resident’s PASRR paperwork (including any Level II information) is transferred with the individual. 

In addition, effective March 25, 2020, Medicaid has temporarily suspended the requirement of a PASRR number on the PA for 30 days. Providers should note on their portal submissions stating that the PASRR is unavailable due to the COVID-19 state of emergency declaration. Providers should add all the pertinent information about the recipient’s levels of care needs in their portal submission. 

For individuals receiving specialized services, the nursing facility should focus on promoting the basic health and safety of individuals who had been receiving specialized services in the nursing facility before the COVID-19 public health emergency or who were receiving specialized services in another nursing facility before the transfer. 

The admitting nursing facility is responsible for submitting a claim for payment. The health and safety of facility staff and the Medicaid beneficiaries served by a facility are of prime importance. In the event the facility is affected by COVID-19, please implement the facility’s emergency plan.

Health Care Professionals Not Currently Enrolled as a NC Medicaid Provider

Expedited application and enrollment processes are available for health care professionals who want to deliver services to Medicaid beneficiaries. This applies to providers enrolled in another state’s Medicaid program and to those not enrolled in Medicaid in any state. See “Special Bulletin COVID-19 #7: Public Health Emergency Enrollment Applications for Health Care Professionals Not Currently Enrolled as an NC Medicaid Provider.

Other NC Medicaid Flexibilities

Below are several additional Medicaid Bulletins related to temporary flexibilities effective during the North Carolina COVID-19 state of emergency declaration. For a full list of published Medicaid-related COVID-19 bulletins, visit the Medicaid Bulletin webpage under the Provider tab of the NC Medicaid website and select “COVID-19” from the Category drop-down menu.

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