CARES Act: Next Steps

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Remaining Congressional Session

There is very little time left in this Congressional session, and both the House and Senate are expected to depart in October to go home to campaign. The exact timing is unclear and the plans for a lame duck session are uncertain. The pressure will be on to avoid a government shutdown and agree to a Continuing Resolution. Efforts will also be made to find a vehicle for many of the other expiring programs as well.

CARES Act Update

The COVID-19 pandemic – the size, scale, and relative absence of knowledge as to how best to treat, prevent, and monitor – has resulted in a host of different initiatives.

The Phase 1 bill, Coronavirus Preparedness and Response Supplemental Appropriations Act, provided initial support and vaccine development. Phase 2, the Families First Coronavirus Response Act (FFCRA), provided paid leave, unemployment, and food assistance. Phase 3, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, resulted in an economic stimulus, including loans to major industries and small businesses, as well as direct payments to individuals. Phases 3b and 3c, the Paycheck Protection Program and Health Care Enhancement Act, provided additional funding for small businesses and hospitals and extended the Paycheck Protection Program.

The chart below summarizes the funds made available for health care services:

Relief Fund Allocation Date Issued/ Announced

Total Payment Amount

Recipients
General Distribution (First Round) April 10, 2020 $30 billion Entities that billed Medicare in 2019
General Distribution (Second Round) April 24, 2020 $20 billion Entities that billed Medicare in 2019
Rural Provider Distribution (First Round) May 6, 2020 $10 billion Rural acute general hospitals, CAHs, RHCs, and rural community health centers (CHCs)
High Impact Distribution (First Round) May 7, 2020 $12 billion Hospitals with at least 100 inpatient COVID-19 admissions as of April 10, 2020
Skilled Nursing Facilities Distribution May 22, 2020 $4.9 billion Medicare and Medicaid certified SNFs with at least six beds
Indian Health Service (IHS) Facilities May 29, 2020 $500 million Tribal hospitals, clinics, and urban health centers
Safety Net Hospital Distribution (First Round) June 9, 2020 $10 billion Hospitals with Medicare DPP of 20.2 percent or greater, average uncompensated care per bed of $25,000 or more, and profitability of 3 percent or less
Medicaid and CHIP Distribution June 9, 2020 $15 billion (approximately) Providers that did not receive a General Distribution payment and billed Medicaid for health care-related services between January 1, 2018, and December 31, 2019
Rural Provider Distribution (Second Round) July 10, 2020 $1 billion Specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas
Safety Net Hospital Distribution (Second Round) July 10, 2020 $3 billion Hospitals with Medicare DPP of 20.2 percent or greater, average uncompensated care per bed of $25,000 or more, and profitability of 3 percent or less averaged consecutively over two or more of the last five cost reporting periods
High Impact Distribution (Second Round) July 17, 2020 $10 billion Hospitals with over 160 COVID-19 admissions between January 1 and June 10, 2020; or one admission per day; or that experienced a disproportionate intensity of COVID admissions (exceeding the average ratio of COVID admissions/bed)
Children's Hospital Distribution (part of Safety Net Hospital Distribution) August 14, 2020 $1.4 billion 80 free-standing children's hospitals either exempt hospital under the Medicare IPPS or a HRSA Children's Hospital Graduate Medical Education facility
Nursing Home and Infection Control Distribution August 27, 2020 $5 billion

$2.5 billion: all certified nursing homes with at least six certified beds

$2.0 billion: certified nursing homes with at least six certified beds that meet performance-based metrics

In May, the House considered further funding for unemployment, health care, funds for local, state, territorial and tribal governments, funds to assist renters and homeowners, increased the funding for the nutrition programs and funding for the U.S. Postal Service. The total cost of the "HEROES" bill (Health and Economic Recovery Omnibus Emergency Solutions Act) was estimated at $3 trillion.

The GOP leadership in the Senate countered in July with the HEALS Act (Health, Economic Assistance, Liability Protection and Schools Act). The bill provided unemployment benefits ($200/week), money for National Institutes of Health (NIH) and Centers for Disease Control and Prevention (CDC), liability protections for businesses, schools and hospitals; additional funds for the payroll protection program; loans to seasonal businesses and those in low-income census tracts and a deduction on business meals; and funding for education, but no direct funding for states and localities though they are given new flexibility. The total cost is estimated at $1 trillion.

A chart comparing the HEROES Act and the HEALS Act proposals is included below:

More recently (September 2020), Senate Majority Leader McConnell released a smaller draft proposal with a cost of $500 billion. The bill provided unemployment benefits ($300/week), modifies (or eases) requirements for small business paycheck protection, and provides money for testing and contact tracing and medical countermeasures and vaccines. Money is also allocated to schools.

No additional funds were allocated for state and local aid.

An effort to bring the bill before the Senate for consideration was defeated September 10, 2020. At the time of publication of this alert, it is not clear if the agreement can be reached on next steps and further funding. Key provisions of the rejected bill include funding for schools to safely reopen, an expansion of the Paycheck Protection Program, additional assistance to the unemployed, and liability protections for schools and businesses.

Since that time, the Problem Solvers Caucus outlined a proposal made up of elements of both measures and had a cost of approximately $1.5 billion, but no effort was made to bring the proposal forward in either house. A recent statement by Speaker Pelosi and comments made by President Trump indicate a continuing desire to come to some agreement on a package, but the scale of such an effort remains undecided.

There has been a great deal of guidance provided by HHS as to the use and rules governing the Provider Relief funds. Frequently Asked Questions (FAQs) have been updated on an ongoing basis. One of the areas of greatest interest are the questions related to the reporting requirements for those receiving funds. Guidance was expected in August but was delayed. On September 19, 2020, HHS issued detailed guidance outlining the reporting requirements for Provider Relief Fund (PRF) recipients. We prepared this client alert, which summarizes the reporting system's timeline, applicability of the guidance, and the key data elements to be reported.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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