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The COVID Project

How a Typical Employer in Physician Practices, Outpatient Clinics, Behavioral Health and Allied Health Operates

The employer of this class sells the in-person encounter. Its revenue arrives when a patient sits in a waiting room, is roomed, is examined, undergoes a procedure, gives a specimen or completes a course of therapy, and every one of those events happens at a fixed premises, with a licensed clinician, with supplies bought in a regulated market, on a schedule fixed weeks ahead, for a patient who traveled there from a home, a school or a workplace. Each of those elements is a thing an order can reach, and between March 2020 and September 2021 each was reached. This section states the functions in operational terms, the revenue lines, the inputs and counterparties, the workforce, the seasonality and geography, and the counterparty map that the layers section then fills with instruments.1

The functions

CL, clinical intake and the waiting room

Patients arrive at a fixed time or walk in, check in at a desk, sit in a shared waiting room, are called, roomed by a medical assistant who takes vital signs, and are examined by a physician, advanced practice provider or therapist. The waiting room's occupancy, the screening of every person at the door, the masking of staff and patients, the isolation of symptomatic patients, the exclusion of companions and the spacing of chairs are each a condition on this function, and each was imposed by order in 2020 and 2021.2

PR, procedures and elective visits

This function comprises office-based surgery, injections, endoscopy, dermatologic and cosmetic procedures, courses of physical and occupational therapy, chiropractic adjustments, routine and preventive visits, annual examinations, well-child visits and immunization visits, and the hospital and ambulatory-surgery-center cases that practice physicians schedule and perform. This is the revenue function the elective-procedure orders of March and April 2020 suspended in terms, the conditional-resumption orders governed from April through 2021, and the regional hospital triggers of 2020 and 2021 reached through the counterparty.3

DX, diagnostics and laboratory

This function comprises in-office laboratory testing, imaging, electrocardiography, pulmonary function testing and sleep studies; the reference laboratories and imaging centers to which specimens and patients are sent; and the supply of test kits and reagents. The laboratory-prioritization and reporting orders of Michigan, Ohio, Pennsylvania, Florida, Delaware and New Jersey reached this function directly, and the postponement orders that named "testing" (Arkansas) and "diagnostic and treatment centers" (New York) reached it in terms.4

TM, telehealth under waivers

This function comprises video and audio-only visits billed under the Medicare blanket waivers and the State parity orders, remote monitoring and e-visits. This function did not exist at scale before March 2020 because the law forbade it: Medicare did not pay for a visit to a beneficiary's home, most States did not permit audio-only encounters or out-of-State practice, and the privacy rules did not tolerate consumer video platforms. The federal and State instruments that removed those bars were permissions; the State orders that postponed and conditioned in-person care were the compulsion. Telehealth is the compelled mode, not the continuation of comparable operations.5

FD, front desk and scheduling

This function comprises check-in, insurance verification, appointment management, recall and cancellation, patient flow through the waiting room and the examination rooms. When an order postponed every elective procedure, this function cancelled and rescheduled every affected appointment; when an order required screening at the door, appointment-only service, capacity limits or vaccination verification of every entrant, this function performed it.6

OF, billing and administration

This function comprises revenue-cycle work, credentialing, compliance, human resources and information technology. State telework directives moved this staff home in 2020 and, in New York, Michigan and Pennsylvania, by order in the winter of 2020-21; the reporting orders of the State health departments made every practice running point-of-care tests a reporting entity; and the written-plan requirements of the conditional-resumption orders and the OSHA standard sat on this desk.7

SC, PPE and supplies

This function comprises N95 and surgical masks, gowns, gloves, face shields, sanitizer, test kits, vaccines and drugs. From March 2020 through June 2021 this function bought in a market under federal allocation and export detention, under a federal designation that made accumulation of these goods above reasonable demand a crime, and under State conservation clauses that conditioned every procedure on the practice's PPE self-sufficiency; in July 2021 the FDA revoked the emergency authorizations under which a large share of the respirators in that market had been imported and decontaminated.8

HR, hiring, credentialing and training

This function comprises recruiting, licensure, credentialing, training, continuing education and conferences. The licensing boards and the governors suspended, waived and re-made the credentialing regime in eighteen months of successive emergency orders, and the venue orders cancelled the conferences at which continuing education is earned and staff are recruited.9

WF, workforce availability

The industry's workforce is predominantly female, includes a large share of parents of school-age children, commutes by transit in the largest metropolitan areas and, because it is exposed to patients, was the object of the quarantine, isolation, testing and, from mid-2021, vaccination orders that named health care workers in terms. School and child-care closures, quarantine and isolation orders, the federal conveyance face-covering regime, an airborne-transmission control on every transit commute, the State workplace standards' exclusion duties, the OSHA standard's medical-removal rule and the vaccination-or-testing mandates each fixed who could come to work on a given day.10

CB, patients, referral sources, employers and payers

The patient base was confined by the stay-at-home orders, the travel quarantines, the directives isolating persons over sixty-five, and the face-covering and other exposure-control orders on every indoor public space; the referral sources, hospitals and ambulatory surgery centers, were under elective-procedure, capacity-reservation and visitor orders; the employers that buy pre-employment physicals, drug screens and occupational medicine were closed or sent home by order; and the payers operated under waiver, prior-authorization and parity orders that changed what was billable and how.11

MK, marketing and outreach

This function comprises community events, health fairs, school and sports physicals, sponsorships and referral development, each dependent on gatherings and schools that the gathering caps and school closures suspended.12

The revenue lines

The revenue lines are professional fees for evaluation and management visits, which in the Commonwealth Fund and Phreesia sample were about 47 percent primary care and the remainder spread across more than twenty-five specialties; procedures and surgery; ancillary diagnostics; telehealth; occupational medicine and employer services; distributions from ambulatory-surgery-center ownership; and hospital call and directorship stipends. Every line depends on a physical encounter or on a counterparty whose physical operations were themselves ordered.13

The inputs and counterparties

The inputs and counterparties are hospitals and ambulatory surgery centers, which operated under elective-procedure, capacity-reservation, visitor and reporting orders in every quarter and under staff-testing and staff-vaccination orders in 2021; reference laboratories and imaging centers; pharmacies; distributors of protective equipment under the FEMA allocation rule and the State conservation orders; Medicare, Medicaid and commercial payers under the waiver and parity orders; schools, athletic associations and employers as buyers of physicals; referral networks; and landlords in medical office buildings under the moratoria. Each is a class of counterparty whose orders limited this industry's commerce, and each appears in the layers section with exhibit identifiers.

The workforce

The workforce comprises physicians, advanced practice providers, nurses, medical assistants, technologists, therapists, and front-desk and billing staff. The clinical staff are licensed by a State board and credentialed by hospitals and payers; the non-clinical staff are, under the California, Illinois and Washington mandates of 2021, "workers" and "Health Care Workers" in terms, so that the vaccination status of a biller or a receptionist became a condition of the practice's operation.14

Seasonality and geography

The calendar

Preventive visits and school and sports physicals concentrate in summer and early fall; procedure volume is highest in the fourth quarter, when deductibles have been met. The suspension of March through May 2020 fell on the spring procedure season and the second-quarter preventive cycle; the winter re-tightening fell on the fourth-quarter procedure peak; and the third-quarter 2021 mandates fell on the back-to-school physical season.

The map

The industry is everywhere: 212,620 establishments in offices of physicians alone, in every county, with the largest concentrations in the metropolitan areas whose local health officers issued the orders catalogued in the layers section, and with a large share of practices in the twenty States whose orders named "health care practitioners' offices," "outpatient clinics," "physicians' offices," "clinic-based settings," "Clinics & Doctor Offices" or "physician offices" in terms.15

The counterparty map

For each counterparty class the orders that reached it are stated by category, with the part of the layers section in which the instruments appear.

Counterparty classOrders that reached itWhere the instruments appear
PatientsStay-at-home orders; curfews; travel quarantines; isolation of persons over sixty-five; face-covering and other exposure-control orders on every indoor public space; vaccination-proof entry conditions in four citiesThe fifty States and the District of Columbia; the largest metropolitan areas; the ecosystem
Hospitals and ambulatory surgery centers (referral and procedure venues)Elective-procedure prohibitions; capacity-reservation and regional-trigger orders; visitor and entrant screening orders; daily reporting orders; staff testing and staff vaccination ordersThe fifty States and the District of Columbia; the sector regulators; the counterparties
Reference laboratories and imagingLaboratory prioritization and reporting orders; antigen-reporting ordersThe sector regulators
Distributors of protective equipmentDefense Production Act orders; scarce-materials designation; FEMA export detention; State conservation and inventory clausesThe federal layer; the ecosystem
Payers (Medicare, Medicaid, commercial)Section 1135 waivers; CMS interim final rules; State telehealth parity and cost-sharing orders; prior-authorization suspensionsThe federal layer; the sector regulators
Licensing boards and health departmentsEmergency rules of minimum standards; renewal, reactivation and out-of-State practice waivers; vaccine-provider ordersThe sector regulators
Schools and child care (the workforce's children)Statewide closures of spring 2020; remote and hybrid orders of 2020-21; school and child-care mask and quarantine orders of 2021The counterparties; the ecosystem
Transit and travel (the commute and the patient's journey)Transit service reductions; State and federal conveyance face-covering orders (airborne-transmission controls on every transit commute); entry proclamations; land-border noticesThe federal layer; the largest metropolitan areas; the ecosystem
Employers (occupational medicine buyers)Closure and telework orders; workplace standardsThe fifty States and the District of Columbia; the ecosystem
Landlords and lendersEviction and foreclosure moratoria; court closuresThe counterparties
  1. The function definitions, revenue lines, counterparty and workforce descriptions in this section rest on the 2017 North American Industry Classification System Manual (U.S. Census Bureau); the economic analysis accompanying the OSHA Healthcare Emergency Temporary Standard, 86 Fed. Reg. 32376, 32486-32490 (June 21, 2021) (Ex. SEC-02-001) (NAICS 621111: 161,977 entities; 212,620 establishments; 2,409,333 employees); the American Medical Association's Physician Practice Benchmark Survey; A. Mehrotra, M. Chernew, D. Linetsky et al., The Impact of the COVID-19 Pandemic on Outpatient Visits: A Rebound Emerges (Commonwealth Fund and Phreesia, Apr. 23 and May 19, 2020); Medical Group Management Association, COVID-19 Financial Impact on Medical Practices (Apr. 2020); and HHS Office of the Assistant Secretary for Planning and Evaluation, Medicare Beneficiaries' Use of Telehealth in 2020: Trends by Beneficiary Characteristics and Location (Dec. 3, 2021). ↩
  2. Compare Notice 2021-20, 2021-11 I.R.B. 922, Q&A-18, at 930 (Ex. GOV-005) (modifications "required by a governmental order as a condition of reopening a physical space for business or service to the public" include "limiting occupancy to provide for social distancing, requiring services to be performed only on an appointment basis... or requiring employees and customers to wear face coverings"). The instruments: Mississippi Executive Order 1477, § I(i)(ii)(5)-(7) (Apr. 24, 2020) ("all healthcare professionals and healthcare facilities shall screen all patients"; "waiting rooms and common areas shall limit capacity and seating to ensure social distancing"; "no visitors in the healthcare facility except for one spouse or caregiver") (Ex. SEC-02-025); Kentucky CHFS Order of April 27, 2020 (Healthcare Reopening Phase I) (no waiting rooms) (Ex. KY-015); Texas Medical Board emergency rule, 22 TAC § 190.8(2)(U) (May 1, 2020) (screening before every encounter; masks within six feet; posted notice) (Ex. AGY-ST-HEALTH-BOARDS-046); 29 C.F.R. § 1910.502(d), (h), (i) (Ex. SEC-02-001). ↩
  3. Executive Order GA-09 (Ex. SEC-02-011); Executive Order 20-72 (Ex. SEC-02-020); Emergency Executive Order 20-09 (Ex. SEC-02-022); Executive Order No. 109 (Ex. SEC-02-017); Executive Order 202.10 (Ex. SEC-02-048) ("office-based surgery practices and diagnostic and treatment centers"); Executive Order GA-31 (Ex. SEC-02-015); Pennsylvania Order Requiring Reduction of Elective Procedures in Regions with Low Acute Care Treatment Capacity (Nov. 23, 2020) (Ex. SEC-02-037; Ex. PA-025). ↩
  4. Arkansas Department of Health Directive on Elective Surgeries (Apr. 3, 2020) ("Procedures, testing, and office visits that can be safely postponed shall be rescheduled to an appropriate future date") (Ex. AR-040; Ex. SEC-02-053); Executive Order 202.10 (Ex. SEC-02-048); Michigan Department of Health and Human Services Emergency Order of March 23, 2020 (laboratory prioritization and reporting) (Ex. AGY-ST-HEALTH-SUBORDERS-093); Pennsylvania Order Requiring Reporting of Antigen Test Results (Oct. 13, 2020; effective Oct. 15) (Ex. AGY-ST-HEALTH-SUBORDERS-011); Florida DOH Emergency Order 20-013 (laboratories) (Sept. 11, 2020) (Ex. AGY-ST-HEALTH-BOARDS-012); New Jersey Standing Order for COVID-19 Testing (May 12, 2020) (Ex. AGY-ST-HEALTH-SUBORDERS-061). ↩
  5. CMS, COVID-19 Emergency Declaration Blanket Waivers for Health Care Providers (retroactive to Mar. 1, 2020) (Ex. SEC-02-005; Ex. FED-160); CMS-1744-IFC, 85 Fed. Reg. 19230 (Apr. 6, 2020) (Ex. SEC-02-006; Ex. FED-090); CMS-5531-IFC, 85 Fed. Reg. 27550 (May 8, 2020) (Ex. SEC-02-007; Ex. FED-091); HHS Office for Civil Rights, Notification of Enforcement Discretion for Telehealth Remote Communications, 85 Fed. Reg. 22024 (Ex. SEC-02-008; Ex. FED-194; Ex. AGY-FED-HEALTH-OTHER-001); DEA-DC-016, telemedicine designation (Mar. 16, 2020) (Ex. AGY-FED-HEALTH-OTHER-009); HHS ASPE, Medicare Beneficiaries' Use of Telehealth in 2020 (Dec. 3, 2021) (92 percent of telehealth beneficiaries served at home, "which was not permissible in Medicare prior to the pandemic"). The State parity orders: Iowa Proclamation of Disaster Emergency, § 3 (Mar. 26, 2020) (audio-only parity) (Ex. SEC-02-042); Illinois Executive Order 2020-09 (Mar. 19, 2020) (Ex. SEC-02-050); Colorado Executive Order D 2020 020 (Apr. 1, 2020) (Ex. SEC-02-077); Maryland Order No. 20-04-01-01 (Apr. 1, 2020) (Ex. SEC-02-061); Connecticut Executive Order 7G (Mar. 19, 2020) (Ex. SEC-02-059); Oklahoma Fourth Amended Executive Order 2020-07, ¶ 11 (Mar. 24, 2020) (Ex. SEC-02-062); North Dakota Executive Order 2020-05.1 (Mar. 20, 2020) (Ex. ND-006). ↩
  6. Notice 2021-20, Q&A-18, at 930 (Ex. GOV-005); Mississippi Executive Order 1477, § I(i) (Ex. SEC-02-025); California State Public Health Officer Order of July 26, 2021, § II (verification of vaccine status of all workers) (Ex. SEC-02-046); 29 C.F.R. § 1910.502(d) (Ex. SEC-02-001). ↩
  7. New York Executive Orders 202.6 and 202.7 (Mar. 18-19, 2020); Pennsylvania Order of the Secretary of Health for Mitigation and Enforcement (Nov. 23, 2020; effective Nov. 27) (Ex. PA-022); Michigan Executive Order 2020-110 (June 1, 2020); Pennsylvania Order Requiring Reporting of Antigen Test Results (Ex. AGY-ST-HEALTH-SUBORDERS-011); Minnesota Emergency Executive Order 20-51, ¶ 6 (written plan) (Ex. SEC-02-023); 29 C.F.R. § 1910.502(c) (COVID-19 plan) (Ex. SEC-02-001). ↩
  8. FEMA, Prioritization and Allocation of Certain Scarce or Threatened Health and Medical Resources for Domestic Use, 85 Fed. Reg. 20195 (Apr. 10, 2020) (Ex. SEC-02-010; Ex. FED-075), extended to June 30, 2021 (Ex. FED-077; Ex. FED-078); HHS, Notice of Designation of Scarce Materials or Threatened Materials, 85 Fed. Reg. 17592 (Mar. 25, 2020) (Ex. FED-074), extended July 7, 2021 to Nov. 15, 2021 (Ex. ECO-A-071); Executive Orders 13909, 13910 and 13911 (Ex. FED-070; Ex. FED-071; Ex. FED-072); New Jersey Executive Order No. 109, ¶ 7 (PPE inventory) (Ex. SEC-02-017); Executive Order GA-15 (certification of no public PPE requests) (Ex. SEC-02-012); FDA, Notice, Revocation of Authorization of Emergency Use of Certain Medical Devices During COVID-19; Availability (Aug. 31, 2021) (decontamination and bioburden-reduction system authorizations revoked effective June 30, 2021; imported respirator authorizations revoked effective July 6, 2021) (Ex. AGY-FED-HEALTH-OTHER-048); FDA EUA, imported non-NIOSH-approved respirators (issued Mar. 24, 2020; reissued Mar. 24, 2021; revoked effective July 6, 2021, 86 Fed. Reg. 48712) (Ex. AGY-FED-HEALTH-OTHER-049); FDA EUA, NIOSH-approved respirators (reissued July 12, 2021, narrowing scope) (Ex. AGY-FED-HEALTH-OTHER-052). ↩
  9. Florida DOH Emergency Orders 20-002, 20-003, 20-012 and 20-015 (Ex. AGY-ST-HEALTH-BOARDS-001; Ex. AGY-ST-HEALTH-BOARDS-002; Ex. AGY-ST-HEALTH-BOARDS-011; Ex. AGY-ST-HEALTH-BOARDS-014); California DCA Waivers DCA-20-01, DCA-20-02, DCA-21-152, DCA-21-165, DCA-21-175 and DCA-21-194 (Ex. AGY-ST-HEALTH-BOARDS-020; Ex. AGY-ST-HEALTH-BOARDS-021; Ex. AGY-ST-HEALTH-BOARDS-038; Ex. AGY-ST-HEALTH-BOARDS-039; Ex. AGY-ST-HEALTH-BOARDS-041; Ex. AGY-ST-HEALTH-BOARDS-043); Texas Executive Order GA-19 (Ex. SEC-02-013); Pennsylvania Department of State, telemedicine and licensure waivers of Mar. 18 and 20, 2020 (Ex. PA-092), continued by Act 21 of 2021 to Sept. 30, 2021; Illinois IDFPR temporary practice permits issued from April 2020 (Ex. AGY-ST-HEALTH-BOARDS-053; the Secretary's proclamation of May 4, 2023, Ex. AGY-ST-HEALTH-BOARDS-052, is post-period and is cited only for its recital of the 2020-2023 permit regime); Nevada Declaration of Emergency Directive 011 (Ex. NV-013) and Directive 046 (July 20, 2021) (Ex. NV-040). ↩
  10. Families First Coronavirus Response Act, Pub. L. 116-127, §§ 3102, 5102 (Ex. FED-170), with 29 C.F.R. part 826 (Ex. FED-171; Ex. FED-172); CDC, Requirement for Persons To Wear Masks While on Conveyances and at Transportation Hubs, 86 Fed. Reg. 8025 (Ex. FED-020); 29 C.F.R. § 1910.502(l) (medical removal protection) (Ex. SEC-02-001); Cal. Code Regs. tit. 8, § 3205 (Ex. SEC-02-047); Virginia Safety and Health Codes Board, 16VAC25-220, as documented in the Board's Briefing Package of June 23, 2020 (Ex. AGY-ST-LABOR-WORKPLACE-001); the school and child-care instruments collected in the layers section; the vaccination orders of California (Ex. SEC-02-045), New York (Ex. SEC-02-038), New Jersey (Ex. SEC-02-019), Illinois (Ex. SEC-02-051), Washington (Ex. SEC-02-030) and Rhode Island (Ex. SEC-02-071). ↩
  11. Oklahoma Fourth Amended Executive Order 2020-07, ¶ 17 (persons over sixty-five to stay home) (Ex. SEC-02-062); Florida Executive Order 20-112, § 2 (Ex. SEC-02-021); Executive Orders GA-27 and GA-31 (Ex. SEC-02-014; Ex. SEC-02-015); Mississippi Executive Order 1463, ¶ 1.c (hospital visitation) (Ex. SEC-02-024); CMS QSO-20-13-Hospitals (Ex. FED-096); New York Department of Financial Services Insurance Circular Letter No. 6 (2020) (Mar. 15, 2020) (Ex. SEC-02-080). ↩
  12. The statewide gathering caps and school closures collected in the layers section (the counterparties; the ecosystem); Notice 2021-20, Q&A-10, at 927-28 (Ex. GOV-005) (an order limiting "group meetings" is a governmental order). ↩
  13. A. Mehrotra, M. Chernew, D. Linetsky et al., The Impact of the COVID-19 Pandemic on Outpatient Visits: A Rebound Emerges (Commonwealth Fund and Phreesia, Apr. 23 and May 19, 2020) (sample of more than 50,000 providers and more than 12 million visits). ↩
  14. California State Public Health Officer Order of August 5, 2021 ("'Worker' refers to all paid and unpaid individuals who work in indoor settings where (1) care is provided to patients, or (2) patients have access for any purpose... including... clerical, dietary, environmental services, laundry, security, engineering and facilities management, administrative, billing, and volunteer personnel") (Ex. SEC-02-045); Illinois Executive Order 2021-20, § 2 (Ex. SEC-02-051); Washington Proclamation 21-14, ¶ 1.d (employees, contractors and volunteers) (Ex. SEC-02-030). ↩
  15. 86 Fed. Reg. at 32488 (Ex. SEC-02-001); Executive Order 20-72 (Ex. SEC-02-020); Executive Order 20-22 (Ex. SEC-02-032); Order of Public Health Emergency Two (Va.) (Ex. SEC-02-054); Executive Order No. 252, ¶ 5 (N.J.) (Ex. SEC-02-019); State Public Health Officer Order of August 5, 2021 (Cal.) (Ex. SEC-02-045); Executive Order 2021-20, § 2 (Ill.) (Ex. SEC-02-051); Executive Order 16-20 (W. Va.) ("hospitals, offices, and clinics throughout the state") (Ex. WV-014); Executive Order 20-13 (Ind.) ("dermatology offices") (Ex. IN-011; Ex. SEC-02-066); Executive Order 2020-17 (Mich.) ("any medical center or office that performs elective surgery") (Ex. SEC-02-058); OAR 333-019-1011 (Or.) ("health care provider offices... behavioral health care offices, urgent care centers") (Ex. SEC-02-079). ↩