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Winding Down Hospitals Without Walls

What surgery centers enrolled in the program need to know as the PHE approaches its end

BY KARA NEWBURY | OCTOBER 2022

ASCs still operating as hospitals as part of the Hospitals Without Walls program should evaluate their continued participation as states are ending, or have already ended, their emergency/pandemic plans related to COVID-19 and are returning to normal status. Staff within the Division of Continuing & Acute Care Providers Quality of the Safety & Oversight Group (QSOG) at the Centers for Medicare & Medicaid Services (CMS) have been monitoring both the COVID-19 public health emergency (PHE) and the ASCs temporarily enrolled as hospitals, and request that ASCs review the QSO-20-24-ASC memo that they signed as part of their participation attestation to determine whether they should revert to ASCs at this time.

The attestation signed when enrolling in the program states that the “ASC named above may enroll as a hospital provided that it is not inconsistent with the state’s emergency preparedness or pandemic plan.” The memo also states that “once there is no longer a need for the ASC to be a hospital under their state’s emergency preparedness or pandemic plan, the ASC should come back into compliance with all applicable ASC federal participation requirements, including the Conditions for Coverage.” If a state is no longer under an emergency or pandemic plan/state of emergency, CMS staff believes that could mean ASCs in that state are no longer needed as temporary hospitals and are no longer consistent with the state’s plan.

If the temporarily enrolled hospital decides to revert to an ASC prior to the end of the PHE period, they must notify their Medicare Administrative Contractor (MAC) in writing. The MAC will “deactivate the hospital billing privileges and reinstate the ASC billing privileges effective on the date the ASC terminates its hospital status.” All facilities still enrolled at the time the secretary of the US Department of Health & Human Services (HHS) determines there is no longer a PHE due to COVID-19 will at that point have their hospital CMS Certification Number (CCN) terminated and the CMS regional office will send a tie-out notice to the applicable MAC.

Hospitals Without Walls Program Background

On March 30, 2020, then CMS Administrator Seema Verma announced sweeping regulatory changes to address the surge expected due to the COVID-19 pandemic. Under its authority pursuant to section 1135 of the Social Security Act, CMS granted temporary emergency blanket waivers and implemented additional flexibilities for providers and suppliers that were intended to provide ASCs, hospitals, home health agencies and others with flexibility to respond to the COVID-19 PHE.

One such flexibility was the Hospitals Without Walls program. ASCs could either contract with local healthcare systems to provide hospital services and work with the health system to coordinate reimbursement, or directly “enroll and bill as hospitals during the emergency declaration as long as they are not inconsistent with their State’s Emergency Preparedness or Pandemic Plan.” At the height of the program, there were 136 ASCs enrolled as hospitals. (Read about one ASC’s experience with the program.)

On December 1, 2021, CMS posted a memo announcing that effective upon issuance of the memo, no new ASC requests to temporarily enroll as hospitals would be accepted. According to the memo, facilities that are temporarily enrolled as hospitals under this flexibility can continue providing inpatient and outpatient hospital services until: they voluntarily terminate from temporary hospital enrollment; or CMS initiates enforcement action for any facility that is noncompliant with applicable participation requirements, to the extent not waived; or the Secretary determines there is no longer a PHE due to COVID-19; or CMS provides additional public notice that this guidance has ceased to be effective.

COVID-19 PHE Status

Effective October 13, 2022, Secretary Xavier Becerra announced the renewal of the public health emergency due to the ongoing COVID-19 pandemic. The then HHS Secretary Alex Azar originally declared the PHE on January 31, 2020, and it has been renewed continuously since then. Renewal of the PHE keeps a number of important waivers and flexibilities active. The current PHE declaration will last 90 days from its current effective date.

In January 2021, then acting HHS Secretary Norris Cochran stated in a letter to governors across the country that HHS would provide states with 60 days’ notice prior to the termination of the PHE declaration for COVID-19. This will allow states time to phase out any flexibilities allowed during the PHE. While the PHE is now set to continue at least through mid-January 2023, CMS has started creating a roadmap for the end of the COVID-19 PHE. ASCA will continue to communicate with the agency, monitor for developments and let members know as soon as possible if anything changes regarding the PHE.

Write Kara Newbury with any questions.