Pennsylvania hospitals and behavioral health providers that recently received Act 2 of 2022 payments as part of the American Rescue Plan Act (ARPA) from the Department of Human Services (DHS) should keep in mind that: 1) all staff retention payments must be spent within 90 days from the date the provider received the funding; and 2) all staff recruitment payments must be spent within 180 days from the date the provider received the funding. In addition, Act 2 of 2022 recipients must submit a report of their staff retention payments to DHS by September 30, 2022, and a report of their staff recruitment payments to DHS by December 31, 2022. A list of hospitals and behavioral health providers that received payments may be accessed here.

Background

Under Pennsylvania Act 2 of 2022, the sum of $100 million was appropriated to DHS, the agency tasked with administering the program, to make payments to hospitals for making retention and recruitment payments to qualified staff. An additional $110 million was appropriated to DHS to make payments to behavioral health providers, critical access hospitals and “high-Medical Assistance hospitals” (as defined in the Act) for staff retention and recruitment payments to qualified staff. Payments were not made to special hospitals, LTACHs or rehab hospitals. Act 2 of 2002 payments are one-time payments calculated based on the facility’s number of licensed beds, as determined in consultation with the Department of Health. In accordance with Act 2 of 2022:

• Hospital and behavioral health provider recipients can only spend the money on retention and recruitment payments to qualified staff, including sign on bonuses.
• Recipients must make recruitment and retention payments directly to their qualified staff.
• Qualified staff members are defined as employees who are involved in direct patient care activities (including dietary services staff if they assist with feeding patients or providing other direct patient care activities), environmental services (including laundry, janitorial and cleaning staff) or clinical care services. Qualified staff members do not include behavioral health executives, hospital executives, contracted staff, administrators and administrative support staff or physicians.
• Hospital and behavioral health provider recipients can determine which qualified staff members will receive payments and how much each will receive based on the needs of their workforce.
• Payments may not be made to a qualified staff member who already received an Act 2 of 2022 retention or recruitment payment from another hospital or behavioral health provider.
• Hospitals, behavioral health providers and qualified staff must pay regular payroll taxes on these payments, although payroll taxes may be deducted from the funds received.
• Hospitals and behavioral health providers may not use the money to supplant existing staff wages or reimburse for other federal or state funding.

Reporting Requirements

Hospitals and behavioral health providers that received payments under Act 2 of 2022 are required to report certain information to DHS. The reports must include:

• The number of staff payments or bonuses, including any additional retention and recruitment incentives, regardless of funding source.
• The ratio of permanent staff to contracted agency/temporary staff as of December 30, 2021, versus that ratio as of the submission date of the report.
• The amount of a staff payment or bonus per employee, including the total number of each type of payment or bonus.
• The types or classification of employees that received a bonus or payment.
• The criteria used for determining a staff payment or bonus, including whether and how staff were engaged in the determination.
• The plan for recruitment and retention through December 31, 2023.
• The number of the employees who received a bonus or payment, including the number of employees who received a bonus or payment and are still employed at the facility on the submission date of the report.
• Any other criteria required by Federal or State law or guidance.

DHS has issued a reporting template which may be accessed here: Act 2 Reporting Template: Staff Retention and Recruitment Payments. DHS will review and may audit reports so recipients should maintain documentation, records and other information related to the payments they made to qualified staff. DHS may recover payments from a recipient that does not comply with the provisions of Act 2 of 2022 or with federal or state law or guidance.