As we previously reported, Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136) (“CARES Act”) on March 27, 2020. We recently provided guidance on how the CARES Act impacts hospitals. However, there are several sections of the CARES Act that impact long term care facilities. The CARES Act provides relief in the form of increased payments and flexibility under Federal health care programs, increased Medicaid financing available for the states, and $200 million for CMS to assist nursing homes with infection control and the prevention of the spread of COVID-19 in nursing homes. This document will specifically focus on Title III of the CARES Act and how it impacts the reimbursement and operations of long term care facilities.

Accelerated Medicare Payments to Non-Hospital Providers (Skilled Nursing Facilities)

On March 28th, Section 3719 of the CARES Act (and CMS Guidance issued March 29, 2020), which provides enhanced benefits under the current advance payment program for hospitals, was extended to other Medicare providers and suppliers impacted by COVID-19, which includes skilled nursing facilities and others that provide Medicare-reimbursable services. For most non-hospital providers, the accelerated payments are limited to a 3 month advance of Medicare payments (not the 6 months provided to hospitals) and advances must be recouped within 210 days (not the 120 days provided to hospitals). However, it allows the receiving non-hospital provider to request: up to 100% of the advanced reimbursement and 12 months to repay the advance. After submission of a request by the provider to the Medicare Administrative Contractor (MAC), the MAC will strive to cause the payment to be issued within 7 days of such request.

Delayed Implementation of Scheduled Reductions in Medicare Payments

Section 3709 exempts the Medicare program as a whole for the remainder of this year from any payment reduction under any sequestration order. This exemption should result in skilled nursing facilities avoiding the 2% Medicare pay cut that was supposed to go into effect in May.

Relaxing Post-Acute Care Eligibility Rules during Emergency Period

Section 3711 of the CARES Act provides flexibility for post-acute care providers so they are able to increase the capacity of the health care system during the emergency period. Specifically, this legislation waives the 3-hour rule for inpatient rehabilitation facilities which requires a patient to be in 3 hours of inpatient rehabilitative therapy, 5 days per week or 15 hours of rehabilitation therapy over a week.

In addition, Section 3711 waives the site neutrality rules for long term acute care hospitals (“LTCH”). Medicare reimburses LTCHs under the Long-Term Care Hospital Prospective Payment System (“LTCH PPS”) for certain intensive care unit and coronary care unit patients and patients who received at least 96 hours of ventilator services in the LTCH. Other patients are reimbursed under a lower “site neutral” rate. The CARES Act temporarily pauses the current site-neutral payment methodology for patients accepted “in response to the public health emergency” which allows LTCHs to accept a broader range of patients without risking their current reimbursement rates. The Act does not go into detail as to what “in response to the public health emergency” means in this context. Presumably it means accepting both COVID-19 and non-COVID-19 patients so that short term acute hospitals can free up beds, but LTCHs should consider the impact on site neutral payments if the waiver only applies to COVID-19 patients. In addition, LTCHs that have spent the last year or more gearing up to be LTCH PPS compliant may take a step backward by relying too heavily on this waiver.

Section 3711 also suspends the “50% rule” during the public health emergency. Under pre-pandemic payment rules, LTCHs must have 50% of their patients for their 2020 fiscal year meet LTCH PPS criteria in order to continue to be eligible for any LTCH PPS payments. Section 3711 suspends this rule for discharges during the public health emergency. Some LTCHs may not be subject to the 50% rule during this time or may not discharge some site neutral payment patients before the public health emergency ends. As such LTCHs should also proceed with caution in relying on this provision.

These waivers are effective from Jan. 27, 2020, through the end of the COVID-19 emergency, as declared by the HHS secretary under the PHSA Section 319.

Additional Sections of the Title III of the Cares Act that impact Long Term Care Facilities

Increased Funding for Surveys and Certification of Facilities

The Act earmarks at least $100,000,000 of a $200,000,000 appropriation to CMS for the general purposes of preventing, preparing for, and responding to coronavirus, domestically and internationally, to be set aside for “necessary expenses of the survey and certification program, prioritizing nursing home facilities in localities with community transmission of coronavirus.” Nursing facilities have been hot spots of COVID-19 transmission leading to increased focus on enforcement activities. This provision of the CARES Act is consistent with that trend.

Extension of Money Follows the Person Demonstration Program

Section 3811 of the CARES Act extends the Medicaid Money Follows the Person demonstration occurring in 44 states that provides State Medicaid programs flexibility in coverage of home and community based services for long term care patients so that they may receive covered services in their home or other setting of choice. Funding for the demonstration was set to expire in September of this year. The Act extends approximately $75 million in funding through November 30, 2020.

Extension of Spousal Impoverishment Protections

Under the Medicaid spousal impoverishment provisions, a certain amount of a couple’s combined resources is protected for the spouse who is not living in the nursing home so that the costs of long term care do not deplete the couples resources. Section 3812 extends these protections through November 30, 2020.

Information Privacy

The CARES Act also provides increased flexibility for disclosure of patient information for purposes of treatment, payment and health care operations under the Health Insurance Portability and Accountability Act (“HIPAA”) and the Health Information Technology and Clinical Health Act (“HITECH”). As reported earlier, the CARES Act brings helpful consistency to treatment of substance use disorder information covered under the “Part 2 Regulations” by allowing such information to be used and disclosed (with patient consent) in accordance with the treatment, payment and health care operations provisions of HIPAA and requires the Office for Civil Rights (“OCR”), which administers HIPAA, to issue guidance on what is allowed to be shared of a patient record during the public health emergency related to COVID-19.

Liability Protections

As reported earlier, Section 3215 of the CARES Act makes it clear that health care providers who provide volunteer medical services during the public health emergency related to COVID-19 have liability protections if they are acting within the scope of their license. In addition, efforts at the Federal, State and local efforts are underway to extend liability protections to the non-volunteer context.

Small Business Administration Loans and Delay of Payment of Employer Payroll Taxes

It should be noted that long term care facilities may also be eligible for some of the benefits provided other parts of the CARES Act, such as the capital and loan provisions. Both non-profit and for profit health care providers may be eligible for Small Business Administration (“SBA”) loans under the Paycheck Protection Program (“PPP”) or the Economic Injury Disaster Loan (“EIDL”) and grant program. The SBA is still issuing guidance on these loans, particularly with respect to the less than 500 employees requirement, but applications are being processed now. For more information see here. In addition, the CARES Act will allow for most employers, including most long term care facilities, to defer paying their share of applicable employment taxes from March 27, 2020 through December 31, 2020. Half of this deferred amount would be due on December 31, 2021 and the other half by December 31, 2022.


The CARES Act provides fewer benefits to long term care facilities than to hospitals, and those benefits are designed to allow SNFs, LTCHs and nursing homes to assist as part of the overall health care response to the pandemic. These facilities should have a clear understanding of the law as it impacts their operations to as to receive the intended benefit while allowing themselves flexibility to get back to business as usual when the public health emergency is over.