Hospitals Starting to Re-open: CMS Outlines First Steps on the Path to Re-opening Healthcare Facilities

After weeks of dealing with overflowing ICUs, drastically falling volumes, and significant losses in revenue, hospitals across the country will welcome information the Centers for Medicare & Medicaid Services (CMS) released on April 19^th, 2020, regarding the plan for reopening healthcare facilities.

While it is unlikely that a return to normalcy will be as simple or quick as the “flip-of-a-switch”, most healthcare executives and providers will agree that any move in this direction is welcome and a move in the right direction.

When the COVID-19 pandemic emerged on a wide scale in mid-March 2020, CMS issued a recommendation for healthcare facilities to limit or halt any procedures and patient admissions that were non-essential, which meant most of the patients entering hospitals since that time have either been emergent and high-acuity cases or COVID-19 patients.Significantly diminished volumes and halting elective procedures have been detrimental to healthcare provider organizations throughout the country. The pandemic created unprecedented new difficulties and high levels of uncertainty, adding to the rapidly growing stress on these organizations–particularly on the countless clinicians and facility staff working on the front lines. In addition to the continuously evolving challenges and compounding issues of treating rising numbers of COVID-19 patients, healthcare organizations are simultaneously absorbing the negative economic effects the rest of the U.S. economy is confronting during these challenging times. It is no surprise the results of these events include a severe negative financial performance for healthcare facilities. While it is far too early to sufficiently estimate the full impact of this pandemic on provider organizations, we do know the month of March alone, hospitals reported a decline in EBITDA margins of over 12% compared to March of 2019, according to a report by Kaufman Hall. These effects only trickle down further across all healthcare services, resulting in similar declines in volumes and financial performance for hospitals, physicians, medical groups and ancillary service providers alike.

And it is likely that we will only continue to see similar levels of declines until such time that healthcare providers can start ramping up procedures and resuming encounters with non-COVID -19 patients.

In the updated announcement this week, CMS stated that “as states and localities begin to stabilize, it is important to restart care that is currently being postponed.” The statement listed some examples of cases that should be restarted, including:

• Procedural care (surgeries and procedures)
• Chronic disease care
• Preventative care

We assume in the case of procedural care, this would include reinitiating certain elective procedures.

Phase I of the Re-opening Process

Healthcare providers must be in states or regions that have passed the “Gating Criteria”, which is the system for measuring the level of stabilization of a particular area based on COVID-19 symptoms, cases, and hospitalizations resulting from the virus. The CMS announcement went on to strongly encourage the continued maximum use of telehealth modalities, which many throughout the industry – including experts here at Coker Group – believe is a modality that will be here to stay long after the pandemic fully subsides. For those cases that cannot be conducted virtually via telemedicine, CMS has outlined their first in a series of recommendations for how facilities should resume in-person care of non-COVID patients. And while the federal government stated its aim to provide flexibility to healthcare facilities in determining when and how to begin re-opening their doors to non-COVID-19 patients, CMS has outlined these recommendations for both procedural care in healthcare facilities and patient encounters in provider clinics.

Some of these recommendations outlined in the statement include:

• Care should be offered to patients as clinically appropriate and within a facility that has the adequate resources to provide quality of care
• Facilities should consider ramping up cases in a manner that will allow them to quickly respond in the event of a surge in COVID-19 cases
• Decisions should be made consistent with public health information and in collaboration with appropriate health authorities
• Organizations should consider various factors required to resume non-COVID patients, such as adequate facilities, workforce (across all phases of care), supplies and equipment
• The necessity of care and the clinical needs involved with increasing non-COVID cases should be evaluated, and providers should prioritize surgical/procedural care and complex chronic disease management, though, preventive services may also be necessary
• Consider establishing zones of facilities designated for non-COVID patients, where appropriate screening of both patients and staff could be conducted

The CMS statement went on to reinforce previous recommendations related to the use of personal protective equipment, as well as provide additional points on workforce availability, facility considerations, testing procedures, and sanitation protocols.

‍Click here for a full copy of the April 19 report from CMS. While this latest news from CMS may not open the floodgates for volumes to return back to pre-COVID-19 levels right away, it at least represents a shimmer of light at the end of a long and challenging tunnel that we all have been seeking for quite some time.

Coker will continue to monitor further news from CMS on re-opening healthcare facilities, as well as other developments that might impact – positively or negatively – the road to recovery for healthcare provider organizations across the country.

Follow all of our reports and market updates in Coker’s COVID-19 Resource Center and stay tuned to Coker on social media (LinkedIn, Twitter) for the latest news and developments related to the impact of COVID-19 on hospitals, medical groups, and the healthcare industry.