HHS COVID-19 Public Health Emergency Persists as California COVID-19 Policies Are Set To Expire

For healthcare providers, the COVID-19 pandemic has been characterized by ongoing regulatory waivers and relaxed enforcement policies intended to ease the compliance burdens on the US health delivery system as its front-line clinicians have responded to the virus. At the federal level, many of these policies are tied to the PHE determination regarding COVID-19 that the HHS secretary has maintained since early 2020. In California, as in other states, similar emergency policies have been implemented pursuant to executive orders by the governor. 

Now, more than two years after the original HHS PHE declaration, healthcare providers are contemplating the implications of these pandemic-era policies coming to an end. The expiration of certain provisions of various California COVID-19 executive orders on June 30, 2022, illustrates the interplay between federal and state compliance obligations that healthcare providers will have to navigate as state COVID-19 policies evolve amid continuation of the HHS PHE.

The HHS COVID-19 Public Health Emergency Declaration: What It Means for Healthcare Providers

Section 319 of the federal Public Health Service (PHS) Act (codified at 42 USC § 247d) is the source of the HHS secretary’s authority to declare a PHE. That statute permits the HHS secretary to “take such action as may be appropriate to respond to the public health emergency,” including by “making grants, providing awards for expenses, and entering into contracts and conducting and supporting investigations into the cause, treatment, or prevention of a disease or disorder” underlying the PHE. Once issued, a PHE determination will expire after 90 days or sooner if the secretary declares that “the emergency no longer exists.” Based on the “same or additional facts,” the secretary may renew a PHE declaration for successive 90-day periods.

A PHE, in turn, activates various executive powers under other federal statutes. One such example is Section 1135 of the Social Security Act (codified at 42 USC § 1320b-5). Under that authority, the HHS secretary may waive or modify in the area affected by the PHE various requirements pertaining to federal healthcare programs, the Health Insurance Portability and Accountability Act (HIPAA), the Emergency Medical Treatment and Labor Act (EMTALA), the Stark Law, and other statutory or regulatory requirements applicable to healthcare providers. To this end, an “1135 waiver” is intended to ensure that affected individuals enrolled in federal healthcare programs still have access to health care during the PHE and also that healthcare providers will continue to be reimbursed, despite potential noncompliance with otherwise applicable federal requirements.

In response to COVID-19, then-HHS Secretary Alex Azar made the original PHE determination regarding the pandemic on January 31, 2020. Since then, the PHE has been renewed continuously for 90-day extensions. Most recently, current HHS Secretary Xavier Becerra extended the PHE on April 12, 2022, for a 90-day period that will end on July 15, 2022. From the outset, the PHE declaration has been nationwide in scope and thus applies throughout the United States.

The following are some of the HHS policies that continue in effect today and which are directly tied to the PHE being in place:

• Blanket waivers issued by the Centers for Medicare and Medicaid Services (CMS) with respect to sanctions for a Stark Law violation resulting from financial relationships and referrals that are solely related to “COVID-19 Purposes.”
• The Office of the Inspector General’s (OIG) incorporation of the CMS blanket waivers as applied in enforcement of the Anti-Kickback Statute.
• Exercise of enforcement discretion by the Office for Civil Rights (OCR) to not impose penalties for noncompliance with HIPAA requirements against covered healthcare providers in connection with the “good faith provision of telehealth.”

In January 2021, amid the transition between the Trump and Biden administrations, then-acting HHS Secretary Norris Cochran sent a letter to state governors promising that, “when a decision is made to terminate the [PHE] declaration or let it expire, HHS will provide states with 60 days’ notice prior to termination.” Based on this guidance, some onlookers speculated that HHS would publish notice of its intent to let the PHE expire on May 16, 2022 — 60 days before the current PHE renewal will end on July 15, 2022.

But May 16 came and went with no such notice. As a result, HHS is poised to renew the PHE for another 90 days, carrying it forward through at least October 13, 2022. 

Given the regulatory flexibilities that the PHE affords, its expected continuation through October should come as a welcome development for healthcare providers. Yet, as other COVID-19 policies have begun to wind down, providers must confront the prospect that HHS will eventually terminate the PHE or let it expire. For some providers, termination or expiration of the PHE may necessitate investing additional resources into their compliance programs, as various regulatory requirements that have been paused during the pandemic resume effect.

The challenge is that labor shortages persist, and burnout remains a struggle across the healthcare sector as worries about a recession loom large. That’s why, in a letter dated May 10, 2022, various provider associations and other national groups, including the American Hospital Association, American Medical Association, and American Nurses Association, implored HHS Secretary Becerra “to maintain the PHE until we experience an extended period of greater stability and, guided by science and data, can safely unwind the resulting flexibilities.” 

As of now, HHS has not formally communicated how much longer it will maintain the PHE past October. The agency has, however, reiterated its commitment to state governors to provide a 60-day notice of termination or expiration of the PHE. That means stakeholders could know if the PHE will continue into 2023 by the first half of November — right as the public votes in the midterm elections, the results of which could impact HHS’s policy agenda regarding COVID-19 and the PHE.

Expiration of California COVID-19 Policies on June 30, 2022, Will Impact Healthcare Providers

While HHS maintains the PHE, some COVID-19 policies are phasing out at the state level. In California, Governor Gavin Newsom issued Executive Order N-04-22 on February 25, 2022, establishing a staggered timeline for the termination or expiration of certain COVID-19 policies. Pursuant to this timeline, several COVID-19 policies applicable to California healthcare providers will expire on June 30, 2022.

Notably, providers in California will face a regulatory environment where, beginning on July 1, 2022, certain conduct that is excused by federal policy tied to the PHE could be sanctioned under state law. In particular, Executive Order N-04-22 will end the suspension of administrative fines, civil penalties, and causes of action under the Confidentiality of Medical Information Act (CMIA) — California’s analogue to HIPAA — for “inadvertent, unauthorized access or disclosure of health information during the good faith provision of telehealth services[.]” Relaxed enforcement of other laws, including California’s health facility breach notification law (codified at Health & Safety Code § 1280.15), as applied to providers engaged in the “good faith provision of telehealth service” will also cease on June 30, 2022.

In direct contrast, the above-noted OCR enforcement discretion policy assures that providers will not be penalized for noncompliance with HIPAA “in connection with the good faith provision of telehealth during the COVID-19 nationwide public health emergency.” This means that a provider that improperly discloses patient-identifying information while rendering services through a telehealth platform could incur liability under CMIA but not under HIPAA.

As initially drafted, Executive Order N-04-22 also terminates, effective June 30, 2022, the authority of the California Department of Public Health (CDPH), California Emergency Medical Services Authority (EMSA), and California Department of Social Services to waive certain licensure and scope-of-practice requirements applicable to healthcare providers. On June 17, 2022, however, Governor Newsom released Executive Order N-11-22, which modified Executive Order N-04-22 to further extend these waiver authorities. Thus, for an indefinite period until rescinded by a future executive order, Executive Order N-11-22 will preserve the authority of:        

• The Director of CDPH to waive licensure requirements for hospitals and other health facilities.
• The Director of CDPH to waive professional licensing and certification requirements and to amend scopes of practice with respect to certified nursing assistants, home health aides, nursing home administrators, and certified hemodialysis technicians.
• The Director of EMSA to allow out-of-state healthcare personnel to practice in California.

Achieving Compliance in a Post-Pandemic Regulatory Environment

As COVID-19 evolves as a public health threat, so too is the healthcare regulatory enforcement environment. Healthcare providers should continue to monitor the PHE and be alert to the termination or scaling back of state COVID-19 policies, including those adopted via a governor’s executive order during the height of the pandemic, as is occurring in California with Executive Order N-04-22.

In coordination with their legal counsel, compliance officers, and operational staff, providers are well-advised to audit and evaluate how they have utilized regulatory waivers and relaxed enforcement policies throughout the pandemic. The sunsetting of these policies means that regulators will be more stringent in their compliance expectations of providers. Thus, it’s imperative for providers to know when a waiver or relaxed enforcement policy is no longer operative — lest they incur the potential liability of a regulatory violation by unwittingly relying on a policy that is no longer valid.