Update: House Passes, President to Sign American Rescue Plan With Senate Healthcare Provisions

On March 10, 2021, the U.S. House of Representatives narrowly passed H.R. 1319, the American Rescue Plan Act of 2021, on a largely partisan basis by a 220-211 vote. Final passage came four days after the U.S. Senate amended the original House-passed version of the legislation. The White House has said President Joe Biden will sign the American Rescue Plan into law.

After an earlier version of the American Rescue Plan passed in the House and then was amended by the Senate, McGuireWoods provided summaries regarding the healthcare provisions of the $1.9 trillion spending plan responding to and addressing the COVID-19 pandemic. The text from those summaries is included below.

• U.S. Senate Passes American Rescue Plan – 10 Key Updates for Healthcare Providers (Mar. 6)
• U.S. House Passes American Rescue Plan – 15 Provisions for Healthcare Providers (Feb. 27)

U.S. Senate Passes American Rescue Plan – 10 Key Updates for Healthcare Providers

March 8, 2021

On March 6, 2021, the U.S. Senate narrowly passed H.R. 1319, the American Rescue Plan Act of 2021, by a 50-49 vote, along entirely partisan lines. Sen. Dan Sullivan (R-AK) missed the vote after joining with all Republicans on procedural votes against the legislation earlier in the week. Senate passage came exactly a week after the U.S. House of Representatives passed a similar, but not identical, version of the American Rescue Plan on a largely partisan basis by a 219-212 vote. Due to differences in the legislation, the American Rescue Plan returns to the House for passage before President Joe Biden can sign it into law. Democratic House leadership currently plans to bring it up for a vote on March 9, 2021.

President Biden requested the American Rescue Plan’s $1.9 trillion in spending to develop a national vaccination program; increase COVID-19 testing, tracing and treatment; change employment regulations, including the federal minimum wage; and address the negative financial impacts of the COVID-19 pandemic. The legislation includes financial relief to state, local and tribal governments, as well as extensions to enhanced unemployment benefits, certain debt collection relief and direct cash payments to households.

After the House passed its version of the American Rescue Plan, McGuireWoods highlighted 15 provisions in the legislation that healthcare providers should understand. With Senate passage, here are 10 additional changes the American Rescue Plan makes to current law that healthcare providers should understand.

1. Expands ACA health insurance coverage subsidies. The American Rescue Plan includes the largest health insurance coverage expansion in over a decade, since enactment of the Affordable Care Act (ACA). Included in both the Senate and House versions, the legislation expands ACA health insurance coverage support for two years. The Congressional Budget Office (CBO) estimates the coverage expansion in the legislation spends $24.4 billion in tax years 2021 and 2022 to provide more generous subsidies and end the “subsidy cliff.” The subsidy cliff currently ends health insurance premium subsidies for those households earning over 400 percent of the federal poverty line (FPL), while the American Rescue Plan would limit payment on health insurance for all Americans through the end of 2022 at 8.5 percent of a household’s income. During this two-year period, ACA health insurance coverage subsidies would be provided as follows, with the differences to current law included in this table:

Essentially, one commentator calculates that, with these changes, a family of four making $85,000 with $25,000 in health insurance coverage costs, will go from no federal support to a maximum payment for insurance of $7,000, or subsidies for such coverage will go from zero to $18,000. The American Rescue Plan provides various additional levels of support for all income levels, as shown in the table above.

2. Expands ACA cost-sharing support for the unemployed. The Senate legislation adds cost-sharing support for unemployed Americans enrolled in a qualified health plan. Currently, for those enrolled in such a plan who make between 100 and 400 percent of the FPL, the ACA mandates insurers reduce cost-sharing in phased amounts to make out-of-pocket expenses more affordable for lower-income Americans. The Senate legislation amends this provision for 2021 to deem that any person who received (or is approved to receive) unemployment compensation for any week during 2021 meets the requirements for an “eligible insured” under the ACA for such cost-sharing support. Further, for the phased amounts to limit out-of-pocket expenses, the legislation would not include household income in excess of 133 percent of the FPL in calculating the support under these provisions.

3. Increases Medicare reimbursement for certain hospitals. The Senate bill incorporates the same language as introduced in the House-passed Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), which never passed the Senate, related to the Medicare wage index for hospitals. The Senate includes this language in the American Rescue Plan, which was not in the House legislation, to re-establish the “floor” in connection with the Medicare area wage index for hospitals (i.e., a portion of a hospital’s Medicare reimbursement payment rates) located in all-urban states (i.e., states where there are no rural areas or where there are no hospitals classified as rural). This change would apply for discharges occurring on or after Oct. 1, 2021. Under the American Rescue Plan, the Medicare wage index for hospitals in an all-urban state could not be less than the minimum area wage index for the fiscal year for hospitals in that same state. This would increase certain urban state hospital payments, as under the “rural floor” rule, a hospital in an urban area of a state cannot have a Medicare wage index value that is lower than that of a hospital in a rural area of that same state, and this would provide such a floor in these all-urban states.

4. Provides temporary relief for ambulances. During the COVID-19 pandemic, ambulance operators in certain geographic areas have rendered care without any Medicare reimbursement. Medicare reimburses ambulance providers only if the ambulance transports and delivers a patient to a hospital, critical access hospital or a skilled nursing facility (SNF); however, to keep hospitals and emergency rooms available for patients suffering from COVID-19, some states and local governments directed ambulances to render care at a patient’s home, thereby avoiding patient transport to local hospitals, which has resulted in reduced reimbursement for ambulance operators. The Senate bill gives authority to pay Medicare reimbursement for ambulances that deliver ground ambulance services in response to emergency 911 calls if the patient would have been transported to a hospital or facility, but was not, due to COVID-19-related community-wide emergency medical service protocol. Ambulance reimbursement was also adjusted in the 2020 year-end omnibus spending bill for services provided in conjunction with the rural emergency hospital demonstration program.

5. Additional Provider Relief Fund provision for rural hospitals and facilities. The Senate version provides $8.5 billion for rural hospitals and facilities for healthcare-related expenses and lost revenues attributable to the COVID-19 pandemic. This funding provision largely mirrors previous language utilized to create the Provider Relief Fund, but limits spending to Medicare and/or Medicaid providers and suppliers located in a rural area or treated as located in a rural area pursuant to Section 1886(d)(8)(e) of the Social Security Act. Criteria to be a rural provider or supplier include being located in a rural census tract of a metropolitan statistical area or a state-designated rural area, or being a rural referral center or sole community hospital. Eligible rural providers will need to submit an application for the new Provider Relief Fund provision, including documentation of actual healthcare-related expenses and lost revenues attributable to the COVID-19 pandemic. This funding is another example of how the federal government continues to target safety-net and rural hospitals and providers for support under the Provider Relief Fund, as discussed in the prior McGuireWoods alerts “HHS Targets $22 Billion for Hard-Hit COVID-19 Hospitals and Rural Providers” and “Provider Relief Funds: New Dental Distribution and More for Safety-Net and Rural Hospitals.”

6. Changes to House-passed legislation. The Senate bill also makes changes to certain healthcare-related provisions of the House-passed American Rescue Plan discussed in the earlier House legislative summary:

a. Clarifies supplemental vaccine funding formula. The Senate version of the plan clarifies that a portion of the $7.5 billion funding in the American Rescue Plan for vaccine distribution and related activities discussed in item 1 of the House legislative summary would be paid as supplemental funding. The Senate bill requires, within 21 days of the American Rescue Plan’s enactment, funds to be paid to certain states and localities for vaccination grants pursuant to a prescribed formula based on the Public Health Emergency Preparedness awards made in fiscal year 2020.

b. Provides COBRA continuation coverage without premiums. The Senate bill allows individuals eligible for COBRA insurance coverage to maintain their employer-sponsored coverage after a layoff, reduction in hours or furlough without having to pay a portion of the premiums through Sept. 30, 2021. The House-enacted legislation would have required the COBRA-eligible individual to cover 15 percent of premiums (see item 3 of the House legislative summary), but the House-passed HEROES Act similarly proposed to provide full coverage. The CBO estimates this change increases the cost of these COBRA-related provisions from approximately $6.5 billion to $14.4 billion, due to this increased premium share and likely due to increased participation in COBRA continuation coverage. On the other hand, the Senate bill does not provide the same longshore and harbor workers benefits for maritime employees diagnosed with COVID-19 as the House legislation provided.

c. Extends support for SNFs responding to COVID-19. The Senate bill extends the period during which state-based strike teams can assist SNFs with clinical care, infection control or staffing during the COVID-19 emergency period, to include one year immediately after the emergency period ends. The House-enacted legislation would have ended the strike teams at the end of the emergency period. (See item 14 in the House legislative summary.) This extension should allow states to transition efforts with their strike teams, which are intended to help SNFs respond to those diagnosed with or suspected of contracting COVID-19.

d. Directs mental health services spending. The Senate bill removes $500 million from block grants to states, with half removed from the Community Mental Health Services Block Grant program and the other half from the Substance Abuse Prevention Treatment Block Grant program. (See item 8 in the House legislative summary.) Instead, the Senate bill directs this spending to two specific programs. First, it provides $80 million to the Pediatric Mental Health Care Access Program, which provides grants to states, subdivisions of states, Indian tribes and tribal organizations to support mental healthcare telehealth access programs if such governmental entities match at least 20 percent of the federal funding. Second, the Senate bill provides $420 million to Community Behavioral Health Clinics, which integrate behavioral health with physical healthcare, increase consistent use of evidence-based practices and improve access to high-quality care.

e. Increases support for VA medical care. The Senate bill adds $1 billion to support healthcare services and related support to eligible veterans under the Department of Veterans Affairs (VA) programs through Sept. 30, 2023. With this increase, the American Rescue Plan provides $14.482 billion in total funding for these purposes. (See item 13 in the House legislative summary.) By contrast, the Senate bill reduces the amount to be spent on VA copayment supports through Sept. 30, 2021, from $2 billion to $1 billion.

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The changes above partially were due to Senate leadership’s different priorities for the American Rescue Plan. (Based on budget reconciliation rules, each additional dollar spent necessitated a dollar reduction elsewhere in the legislation.) In addition, key substantive matters were removed to comply with the Senate’s Byrd Rule. This rule, named for the late Sen. Robert Byrd (D-W.V.), allows provisions that do not have a direct budgetary impact to be struck from legislation. The Byrd Rule necessitated that Senate Democratic leadership remove the House-passed federal minimum wage phased increase to $15 per hour, and the amendment offered by Sen. Bernie Sanders (D-Vt.) to restore a similar process failed by a 58 to 42 vote. This limited the reconciliation process largely to mandatory programs and taxes, as it has typically been utilized since the 1980s; however, pension funding and COBRA coverage survived a Senate parliamentarian ruling notwithstanding concerns for similar treatment as the minimum wage.

Reconciliation’s key benefit for Democratic leadership is that the Senate passed the American Rescue Plan with a simple majority vote, rather than the filibuster-proof threshold of 60 votes. Even with this advantage, securing the American Rescue Plan’s Senate passage required significant negotiations within the Democratic caucus, most publicly with Sen. Joe Manchin (D-W.V.), including changes to unemployment benefits, support for the homeless and children, and payments to government contractors.

Because the Senate-passed legislation and the House-passed legislation are not identical, action on the American Rescue Plan returns to the House. The House currently anticipates voting on March 9, 2021. If, however, the House introduces any additional changes to the Senate-passed American Rescue Plan to ensure passage in its chamber — which also has a very narrow Democratic majority and some representatives expressing concerns with removal of the federal minimum wage increase — the Senate would need to vote again before the American Rescue Plan can be signed into law. The Democratic leadership’s target date for getting the legislation to President Biden’s desk remains March 14 to avoid expiration of certain COVID-19-related unemployment benefits.

U.S. House Passes American Rescue Plan – 15 Provisions for Healthcare Providers

March 1, 2021

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In the early morning of Feb. 27, 2021, the U.S. House of Representatives narrowly passed H.R. 1319, the American Rescue Plan Act of 2021, by a 219-212 vote. Two Democrats joined with a united Republican caucus to oppose the bill. House Democratic leadership introduced and passed the American Rescue Plan the same week the United States announced its 500,000th death from COVID-19.

President Joe Biden requested the American Rescue Plan’s $1.9 trillion in spending to develop a national vaccination program; increase COVID-19 testing, tracing and treatment; change employment regulations, including the federal minimum wage; and address the negative financial impacts of the COVID-19 pandemic. The bill includes financial relief to state, local and tribal governments, as well as extensions to enhanced unemployment benefits, certain debt collection relief and direct cash payments to households.

The House action followed a ruling by the Senate parliamentarian that could mean the Senate will not include some provisions of the House bill. In the Senate, using budget reconciliation to pass legislation subjects that legislation to the Byrd Rule. Named for the late Sen. Robert Byrd (D-W.V.), the rule allows provisions that do not have a direct budgetary impact to be struck from legislation. Reconciliation allows the Senate to pass legislation with a simple majority rather than the filibuster-proof threshold of 60 votes. This means, because of the 50-50 partisan split in the Senate, all Democratic senators must be united to pass the legislation, with Vice President Kamala Harris serving as the tie breaker.

On Feb. 25, the Senate parliamentarian ruled before the Senate considering the legislation that the House’s provision for a phased increase to the federal minimum wage to $15 per hour did not pass the Byrd Rule test. There may be other provisions that, if the Byrd Rule is raised during debate, may also be struck. Since the 1980s, reconciliation has largely been limited to mandatory programs and taxes. Under some interpretations of the Byrd Rule criteria, funding for education, vaccines, testing and public health activities as well as child care could fall under the Byrd Rule test. However, if no one raises the point of order during debate, no ruling occurs. Should provisions be struck from the House-passed legislation, the House would have to vote on what the Senate passes. The Democratic leadership’s target date for getting the legislation to President Biden’s desk is March 14.

Discussed below are 15 provisions included in the legislation, as it shifts to the Senate, that healthcare providers should understand:

1. Funds COVID-19 Vaccine Activities. The American Rescue Plan allocates significant additional funding for COVID-19 vaccine activities. First, it provides $7.5 billion to the Centers for Disease Control and Prevention (CDC) to plan, prepare for, promote, distribute, administer, monitor and track COVID-19 vaccines. Key aims for this funding include distributing vaccines, establishing community vaccination centers and mobile vaccine units, and communicating with the public about how to receive vaccines. In addition to the funding noted above, the legislation provides $1 billion to the U.S. Department of Health and Human Services (HHS) for vaccine confidence programs designed to increase national vaccination rates.
The legislation provides $6.05 billion for necessary expenses related to research, development, manufacturing, production and purchase of vaccines. Separately, the American Rescue Plan provides $10 billion under the Defense Production Act for medical supplies and equipment, including personal protective equipment (PPE), and for responding to future pathogens with the potential to create a public health emergency. Finally, the legislation allocates $500 million to the Food and Drug Administration for evaluation, oversight and facilitation of vaccine performance and manufacturing.

2. Funds COVID-19 Testing, Contact Tracing and Mitigation Activities. The American Rescue Plan also focuses significant funds on continued COVID-19 testing and mitigation efforts — specifically, $47.8 billion to detect, diagnose, trace and monitor COVID-19 infections and related strategies to mitigate the spread of COVID-19. HHS was directed to use the funds to take actions such as: implementing a national testing strategy, funding health departments’ efforts related to COVID-19 testing supplies, and enhancing data sharing related to COVID-19 testing.

The legislation also allocates $1.75 billion to expand activities and workforce related to genomic sequencing, analytics and disease surveillance. Next, the bill provides money to combat COVID-19 and other emerging infectious disease threats globally, including global health security, disease detection and response, protection immunization and coordination. There is some ambiguity on the final dollars approved here for global health due to the House process, but the draft legislation presented to the final committee before House passage included $750 million. Finally, the legislation provides $500 million to the CDC to support public health data surveillance and analytics infrastructure modernization initiatives and establish, expand and maintain efforts to modernize the U.S. disease warning system to forecast and track hot spots for COVID-19 and emerging biological threats. Similar provisions were included in the House-passed Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act).

3. Expands Health Insurance Access Through COBRA Continuation Coverage. The American Rescue Plan allows individuals eligible for COBRA coverage to maintain their employer-sponsored coverage after a layoff, reduction in hours or furlough, by paying only 15 percent of premiums through Sept. 30, 2021. The HEROES Act proposed to provide full coverage for such individuals throughout 2020, but that provision did not pass in the Senate. The legislation provides special extended election periods and special enrollment provisions allowing the opportunity for individuals previously declined COBRA continuation coverage or who had such coverage and discontinued the coverage prior to the enactment of the law. Group health plans are required to provide notices of these coverage opportunities.

Finally, the legislation provides a refundable tax credit for employers and group health plans to reimburse the full amount of COBRA coverage premiums. Other coverage-related expansions include spending on health insurance exchanges and spending on federal employees and maritime employees diagnosed with COVID-19 before Jan. 30, 2023, with such illness presumed to be a work-related illness for wage loss compensation, or longshore and harbor workers benefits.

4. Funds Public Health Workforce and Mental Health Training. The American Rescue Plan includes $7.66 billion to strengthen the nation’s workforce at public health departments at the state, local and territorial levels. A recipient public health department can use received funds for personnel costs, PPE, certain data-related and other types of technology, related administrative costs, reporting requirement costs and sub-awards to local health departments. In particular, the legislation defines eligible personnel costs broadly to include costs necessary to recruit, hire and train people to “serve as case investigators, contact tracers, social support specialists, community health workers, public health nurses, disease intervention specialists, epidemiologists, program managers, laboratory personnel, informaticians, communication and policy experts, and any other positions as may be required to prevent, prepare for, and respond to COVID-19” at public health departments and certain nonprofit organizations.

An additional $100 million is provided for the nation’s Medical Reserve Corps, which supplies volunteers in public health emergencies, plus $200 million for nursing loan repayment programs. An added $330 million is allocated for teaching health centers that operate graduate medical education programs. Finally, $80 million is provided for mental and behavioral health training and $100 million would fund a Behavioral Health Workforce Education and Training Program. All of this funding comes after the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided significant funding for the healthcare workforce.

5. Increases Funding for Community Health Centers. The American Rescue Plan provides an additional $7.6 billion to health centers, federally qualified health centers and the Papa Ola Lokahi (which seeks to improve the health status and wellbeing of Native Hawaiians and their families) and to other entities named in the Native Hawaiian Health Care Improvement Act. The awards under this provision must be used for COVID-19-related purposes. These purposes include promoting, distributing and administering the COVID-19 vaccine, as well as detecting COVID-19 infection, tracing and mitigation efforts, and developing a workforce necessary to respond to COVID-19. The centers may use awards to acquire equipment and supplies for mobile testing or vaccinations. Finally, awards can be used to “modify, enhance, and expand health care services and infrastructure” and to work within communities for COVID-19 outreach and education. This funding comes after funding extensions for health centers in the year-end omnibus Consolidated Appropriations Act, 2021 (H.R. 133), and in the Continuing Appropriations Act, 2021 and Other Extensions Act, and funding increases in the CARES Act.

6. Provides Emergency Rural Development Grants for Rural Healthcare. The American Rescue Plan provides $500 million to the secretary of the Department of Agriculture until Sept. 30, 2023, for needs-based grants to facilities that primarily serve rural areas, and that target and bolster certain aspects of the COVID-19 response efforts. Specifically, funds from the grants may be used to increase vaccine distribution capacity, provide drugs or medical supplies to increase medical surge capacity, increase telehealth capabilities, construct temporary or permanent structures to provide healthcare services, and support staffing needs for vaccine administration and testing. Additionally, the funds may be used to reimburse expenses and lost revenue due to the COVID-19 pandemic incurred prior to the awarding of a grant, along with any other efforts determined to be critical to address the COVID-19 pandemic and approved by the secretary of the Department of Agriculture.

7. Funds Indian Health Services. The American Rescue Plan includes $5.4 billion to support the activities of Indian Health Services (IHS). These funds include $2 billion for lost reimbursements from third-party payors to IHS during the pandemic; $500 million for the Purchased/Referred Care program; $140 million for information technology, telehealth and electronic health records infrastructure; $84 million for the Urban Indian Health Programs; $600 million for tracking COVID-19 vaccines; $1.5 billion for tracing infections; $240 million for public health workforce supporting American Indian health; and $420 million for mental and behavioral health. An additional $600 million will be available for IHS health facility improvements to respond to COVID-19. These funding programs are in addition to $1 billion provided in the CARES Act and more than the $2.1 billion proposed in the House-passed HEROES Act.

8. Increases Spending on Mental Health Services. The American Rescue Plan provides an additional $3.5 billion for block grants to states, with half allocated for the Community Mental Health Services Block Grant program and the other half for the Substance Abuse Prevention Treatment Block Grant program. These block grant programs provide funding to all U.S. states and territories for programs targeting those with serious mental illnesses and to prevent and treat substance abuse. This spending is a substantial increase to these block grants, as the fiscal year 2020 amounts for these two programs were $722.5 million and $1.85 billion, respectively, and recipient states and territories have until Sept. 30, 2025, to spend the funds.

The legislation also provides funding for a variety of mental and behavioral health-related programs, including $20 million for an awareness campaign focused on healthcare professionals; $40 million for healthcare workforce mental and behavioral care; $30 million for community-based overdose prevention programs, syringe service programs and other harm reduction programs; and $50 million for community behavioral health needs worsened by the COVID-19 pandemic. These funding programs are in addition to $6 billion to the Substance Abuse and Mental Health Services Administration (SAMHSA) and $7.5 billion to the Health Resources and Services Administration for substance abuse treatment in H.R. 133 and proposed in the House-passed HEROES Act.

9. Enhances Medicaid Funding for Community-Based Mobile Crisis Intervention Services. The American Rescue Plan provides a Medicaid federal medical assistance percentage (FMAP) matching payment to state Medicaid programs equal to 85 percent of the cost for community-based mobile crisis intervention services furnished through bundled payments for a three-year period beginning one year from enactment. Such mobile crisis team services have been supported by SAMHSA grant programs and are intended to provide interventions to individuals with mental health and substance abuse needs where the individual is experiencing a crisis, outside a hospital or health facility. Such services are team-based, with at least one behavioral healthcare professional and members are trained in providing trauma-informed care. They are able to quickly screen, stabilize and coordinate healthcare services for the individual, and are encouraged to partner with emergency medical services and other healthcare facilities in a community. The American Rescue Plan also provides $15 million for planning grants to develop such offerings under the respective state Medicaid plan.

10. Mandates and Funds Medicaid and CHIP Coverage for COVID-19 Vaccines. The American Rescue Plan requires state Medicaid and CHIP plans to cover testing and treatment for COVID-19 for Medicaid and CHIP beneficiaries with an FMAP rate of 100 percent through one year after the end of the public health emergency, and adjustments for CHIP state allotments. In addition, the legislation allows state Medicaid plans to cover eligible uninsured groups, including specialized and preventative therapies for individuals diagnosed with or presumed to have COVID-19. Additionally, COVID-19 vaccines and treatments must be made available for certain conditions that might be complicated by COVID-19, such as cancer or pregnancy.

Coverage must begin on the enactment date of the American Rescue Plan and end on the last day of the first quarter that begins one year after the end of the emergency period. State Medicaid and CHIP plans will not be allowed to require beneficiary cost sharing for COVID-19 vaccines or treatment of a condition that may seriously complicate the treatment of COVID-19. The legislation also allows outpatient drugs used for COVID-19 prevention or treatment to be included in the Medicaid Drug Rebate Program.

11. Modifies Medicaid and CHIP Coverage for Pregnant and Postpartum Women. The American Rescue Plan allows state Medicaid and CHIP plans to provide pregnancy- and postpartum-related medical assistance coverage to eligible beneficiaries, including low-income children covered under CHIP, for seven years. Full benefits would be available to women during pregnancy and throughout the 12-month postpartum period, or up to a year after the last day of her pregnancy. If the state selects this option for its Medicaid program, it must provide it under its CHIP program.

12. Increases Medicaid Funding for Newly Expanded State Coverage and Other Support for State Medicaid Programs. The American Rescue Plan seeks to encourage states to expand their Medicaid programs to the uninsured by increasing the FMAP for such expansion by 5 percent for two years. Effectively, this would increase the FMAP for expansion to newly eligible beneficiaries in new expansion states after enactment to 95 percent, closer to the Affordable Care Act’s original 100 percent match. If expanded, state Medicaid plans must cover individuals whose income does not exceed 133 percent of the poverty line. The FMAP increase will not apply to disproportionate-share hospital payments.

Additionally, the American Rescue Plan extends the 100 percent FMAP rate for services provided at Urban Indian Health Organizations and Native Hawaiian Health Care Systems for two years. The legislation also increases the FMAP by 7.35 percent for state Medicaid programs from home and community-based services that are provided between April 1, 2021, and March 31, 2022 (not to exceed 95 percent). State eligibility for FMAP assistance requires states to implement certain activities, which include enhancing, expanding and strengthening home and community-based services under the state’s Medicaid program. These FMAP increases are in addition to amounts provided in the Families First Coronavirus Response Act to state Medicaid plans.

13. Increases Veterans Affairs Care Funding. The American Rescue Plan provides $13.48 billion for healthcare services and related support to eligible veterans under the Department of Veterans Affairs (VA) programs through Sept. 30, 2023. This funding helps to cover the loss of health insurance for many veterans and also to sustain CARES Act staffing and service-level expansions. The VA will have wide discretion on spending such funds, including for facility improvements, suicide prevention and other mental health services, telehealth and other healthcare-related uses. The VA will waive up to $2 billion in copayments from April 6, 2020, through Sept. 30, 2021, and must reimburse veterans who paid copayments or other cost sharing during this period. Finally, the legislation provides $750 million for state veterans’ homes for upgrades related to safety and one-time emergency payments to support operations for enhanced treatments, cleaning and supplies during the COVID-19 pandemic.

14. Supports Skilled Nursing Facilities Responding to COVID-19. The American Rescue Plan provides $200 million to HHS for infection control efforts through the development and dissemination of protocols related to COVID-19 prevention and mitigation in skilled nursing facilities (SNFs). Further, the legislation provides another $250 million for states to establish and implement strike teams to assist SNFs with clinical care, infection control or staffing during the COVID-19 emergency period. Each state’s strike team would be deployed to SNFs in the state with diagnosed or suspected COVID-19 cases among residents or staff, to respond to the situation. The strike teams are similar to a proposal in the House-passed HEROES Act that would have created federal strike teams.

15. Supports OIG Oversight of the Provider Relief Fund. While a smaller appropriation, the American Rescue Plan provides $5 million to the HHS Office of Inspector General (OIG) for oversight activities with respect to the public health and social services emergency fund (the Provider Relief Fund). The Provider Relief Fund was created through congressional appropriations now totaling $178 billion to reimburse healthcare providers’ eligible expenses and lost revenues attributable to COVID-19. HHS developed the Provider Relief Fund through multiple rounds of payment distributions, including both General Distributions and Targeted Distributions to specific provider categories. In late February 2021, the U.S. Department of Justice announced its first Provider Relief Fund-related criminal indictment. With the American Rescue Plan funding, OIG is likely to increase its planned efforts to audit and review Provider Relief Fund spending.

McGuireWoods and McGuireWoods Consulting will continue to monitor these legislative efforts and how the Byrd rule may impact these provisions as the Senate considers the American Rescue Plan. Healthcare providers should note that this legislation could affect the delivery of patient care and the operation of healthcare providers. Please contact the authors or a member of the McGuireWoods healthcare team for additional information.

McGuireWoods Consulting’s federal team assists clients in communicating with policymakers on complex legislative issues related to healthcare, and McGuireWoods attorneys address ongoing, day-to-day obstacles and create new models for delivering healthcare services across the country.

McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial COVID-19-related business and legal issues, and the firm’s COVID-19 response team stands ready to help clients navigate urgent and evolving legal and business issues arising from the pandemic.