The new administration’s $1.9 trillion dollar COVID-19 relief bill, also known as the American Rescue Plan, has passed both chambers of Congress and is expected to be signed into law by the end of the week.  The primary focus of the legislation enhances nationwide vaccine programs, COVID-19 testing and contact tracing, and economic aid to States and citizens.  Healthcare related provisions included in this newest bill are more concentrated towards certain provider types and beneficiaries, as compared to earlier relief legislation with more broadly applicable healthcare relief.

Here are the important highlights for healthcare providers:

Provider Relief Fund

  • $8.5 Billion allocated to reimburse rural healthcare providers for healthcare-related expenses and lost revenues attributable to COVID–19. Similar to some past rounds of funding, eligible rural providers will need to submit an application for the new Provider Relief Fund allocation.
  • $5 Million allocated to the Health and Human Services (HHS) Office of the Inspector General (OIG) for oversight activities specific to the Provider Relief Fund.

As a reminder, recipients of the PRF are subject to reporting requirements outlined in the terms and conditions of the program.  The online PRF reporting portal is currently open for registration only.  For more details, CLICK HERE.

Medicare Wage Index

  • The American Rescue Plan establishes a minimum wage index for hospitals in all-urban states for purposes of Medicare hospital payments. The new minimum wage index cannot be less than the minimum area wage index for the fiscal year for hospitals in that same state, which will result in increased payments to certain urban state hospitals.

Medicaid Expansion

  • States who have not yet expanded their Medicaid programs after the passage of the Affordable Care Act are now offered a new incentive to do so. The incentive comes in the form of a 5% increase in federal assistance for the two years after Medicaid expansion.

Paycheck Protection Program (PPP)

  • An additional $7.25 Billion allocated towards the Paycheck Protection Program (PPP) for first draw or second draw loans. The bill also modifies some eligibility requirements of the program, expanding access to more non-profits.  The current application window for the PPP will close on March 31st, 2021.

A summary of all provisions by category from The National Conference of State Legislatures is available HERE.

Medicare Sequestration Cuts, Medicare Advanced/Accelerated Payment Program

Further relief from Medicare sequester cuts and additional modifications to the Medicare Advanced/Accelerated Payment program, such as loan forgiveness, were absent from this round of relief legislation.

The pause on the -2% Medicare payment adjustment (sequestration), which has been in place since the passage of the CARES act last year, is set to expire March 31st, 2021.

Providers who took advantage of the Medicare Advanced/Accelerated Payment (MAAP) program will soon see recoupment on Medicare claims under the adjusted repayment terms of the program. Recoupment depends on the date MAAP payments were received. Most providers will see a 25% reduction in Medicare payments from April 2021 through February 2022 and then a 50% reduction from March 2022 through August 2022 until the balance is paid back. For more details, CLICK HERE.

As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.

Kayley Jaquet

Manager, Regulatory Affairs