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Relaxed Regulations Bring Compliance Challenges, Attorneys Say

April 7, 2020, 9:53 AM

Compliance officers at health-care organizations should document and clearly communicate any changes in operating policies and practices resulting from ad hoc regulatory waivers during the coronavirus crisis, attorneys say.

The Centers for Medicare & Medicaid Services and the Department of Health and Human Services’ inspector general have waived a wide range of federal rules in response to the pandemic. The aim is to increase hospital capacity, expand the health-care workforce, and allow facilities to care for Covid-19 patients without being overwhelmed by administrative burdens.

Although the flexibility is welcome, applying it presents its own challenges, attorneys said. Compliance officers must track new guidance that emerges—sometimes daily—as well as understand how it affects their particular organization and communicate any policy or procedure changes to a staff already struggling to keep up with the crisis.

“In times like this, it’s important always to keep a focus on the core mission, which is taking care of patients,” Chandra Westergaard, a partner with Norton Rose Fulbright US in Denver, said. The point of federal authorities relaxing rules is to help health-care organizations with that mission, she said.

“So when you’re relying on a waiver, it should be aimed at the same thing: helping patients,” Westergaard said.

Keep It Simple

When a waiver is issued, compliance officers, first and foremost, must analyze it and determine its purpose and limits so they have a clear picture of precisely what changes are allowed in their organization’s practices, attorneys say.

Nearly as important, though, is then communicating those changes effectively so they actually impact how the organization reacts in the crisis, they say.

Health-care workers are already inundated with emails and information from multiple sources on a daily basis, Dorothy DeAngelis, a senior managing director at Ankura Consulting Group LLC in Phoenix, said.

“You can’t just send around the CMS memo to everyone in the hospital and hope you’ll get a coherent response,” she said. “They’ll inevitably interpret it for themselves, and then you’ll have a mess.”

For example, CMS guidance to Medicare Advantage organizations instructs them to let members use out-of-network providers for Covid-19 related services, she said. But the CMS memo is sufficiently complex that the memo could easily by misinterpreted to apply to all medical services, not just those related to the coronavirus, DeAngelis said.

“Therefore, it would be better for the compliance department to supply a paragraph or two in a memo to state who the memo applies to and an overview of its implications,” she said.

Erica J. Kraus, an associate with Sheppard Mullin in Washington, suggested simplifying communications, possibly by employing “job aids” tools that contain instructions about affected procedures, such as prior authorizations or claims payments.

New guidance must be understood against a backdrop of existing regulations and compliance programs that have been years in the making, and officers must convey that just because rules are being waived, “it’s not the Wild, Wild West,” she said.

“It’s important to maintain a culture of compliance even as regulations are being relaxed,” Kraus said. “Sometimes you have to make decisions on the fly, and sometimes you have to clean things up on the back end.”

Fast & Furious

Compliance officers and in-house counsel have an “extremely difficult” challenge in tracking waivers and new guidance that’s flooding hospitals and providers from many directions and in piecemeal fashion, Kraus said.

“It’s a moving target,” she said. “It’s a struggle to keep up with what we are and aren’t allowed to do.”

That’s where outside counsel, who aren’t caught up in the daily struggle of crisis response, can help, Westergaard said. They are connected with agencies so may have information before it’s made public. They also don’t need to “run around and put out fires the way the in-house people need to do,” she said.

“They have time to reflect, to engage in more strategic thinking about the crisis and the changes in rules and regulations,” Westergaard said.

Just because new guidance is coming in fast doesn’t mean it’s clear, attorneys said. “There are many open questions about how much flexibility we have to act,” said Kraus.

Hospitals, for instance, have created new emergency room procedures to separate patients who might have Covid-19, the disease caused by the coronavirus, from those with other medical problems. That can involve rerouting patients from the emergency room to alternative sites for evaluation.

CMS waivers have encouraged hospitals to do so to reduce the risk of patient-to-patient coronavirus transmission. But that puts them at risk of violating the Emergency Medical Treatment and Labor Act, a federal law that requires emergency rooms to treat and stabilize every patient brought in, even those unable to pay.

“EMTALA makes sense normally as a tool to prevent patient dumping and make sure that all patients receive emergency care,” Kraus said. “But with Covid-19, it becomes a big concern how to deal with EMTALA obligations while trying to minimize transmission.”

Paper Trail

Whatever decisions compliance officers make, they should be sure to document them to protect their organization from second-guessing by regulators after the crisis, Westergaard said. Every change made in response to a waiver should be accompanied by an explanation and what authority was relied upon in making it, she said.

“There’s a lot of gray areas in what CMS and HHS have been saying, and a lot of the decisions that organizations have to make are made under the pressure of the moment, without a lot of time for reflection,” she said.

The goal of documentation is to show decisions were made “with good intentions and careful thought,” Kraus said. “You want to be able to show that you weren’t acting willy-nilly, that you were making reasonable decisions in response to a crisis.”

To contact the reporter on this story: Christopher Brown in St. Louis at

To contact the editors responsible for this story: Melissa B. Robinson at, and Fawn Johnson at