New COVID Relief Package Signed into Law

On Thursday March 11, President Joe Biden signed the American Rescue Plan Act (ARP or H.R 1319) into law. The $1.9 trillion bill is aimed towards continuing and accelerating efforts to combat the COVID-19 pandemic as well as to offer economic support to citizens, state and local governments, and small businesses. Although no direct funds for the Provider Relief Fund (PRF) like previous COVID relief packages were included, there are some health provisions.

Disappointedly, the Medicare sequestration-related 2% physician payment cut scheduled for April 1 was not resolved in ARP.  Further, because of ARP’s spending, an additional 4% Medicare sequester cut is triggered.  The 4% cut would be implemented on January 1, 2022.  ASA is currently working to block the implementation of both the 2% and 4% sequestration cuts.

The ARP provides $8.5 billion, through a look-a-like PRF, specifically for rural entities serving Medicare and Medicaid beneficiaries. This funding is for the Department of Health and Human Services (HHS) to allocate to eligible rural providers for health care-related expenses and lost revenues attributable to COVID-19 not reimbursed (or obligated to be reimbursed) by other sources. Notably, the ARP funds are only available to rural providers or suppliers and unlike the PRF’s targeted rural distributions, which were distributed directly to select providers by HHS, rural providers and suppliers seeking the ARP funds must submit an application to HHS.

The legislation also provides HHS with $91 billion for accelerating R&D, manufacturing and distributing vaccines, and increasing the healthcare workforce. A portion of the funds allocated to the HHS ($330 million) are specific for funding teaching health centers that operate graduate medical residency training programs. The funds are meant to maintain and expand existing programs, with particular emphasis on primary care where funding is set to increase by $10,000 per resident in hopes of boosting federal response to public health emergencies.

The HHS also received funds to provide resources for prevention and treatment of mental health and substance abuse disorders, especially in rural areas. The Health Resources and Services Administration (HRSA) was also included in the task of using evidence-based strategies in addressing the increasing rate of suicide, burnout, mental health conditions, and substance abuse disorders among health care professionals.

ARP also addressed several other ongoing issues facing the American people during the pandemic, including food security, nutrition assistance, education and childcare, housing and homelessness, and increased support for the aviation and restaurant sectors.

The bill also included legislation and funding for Medicare and Medicaid spending, most notably providing higher federal matching funds to states in attempts to promote home and community-based services. States that newly expanded Medicaid would receive an additional 5% increase in their regular federal Medicaid matching rate (FMAP) for two years. This increase is in addition to the 6.2% FMAP that was made available through the duration of the COVID-19 public health emergency. The bill also requires Medicaid and CHIP to cover COVID-19 vaccines and treatments, including expanding the state Medicaid option for coverage of COVID-19 testing for the uninsured.