UPDATED: Congress Approves COVID-19 Stimulus, Gives $3B to Provider Relief Fund

UPDATED at 12/22/2020 Congress has reached an agreement on a $900 billion COVID-19 stimulus package that was passed on Monday evening. But healthcare providers are still concerned about receiving some of the aid to cover massive revenue losses from the ongoing pandemic.*

Healthcare providers received a sizable portion of financial relief from the historic $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020. Their relief included a $175 billion Provider Relief Fund, as well as temporary increases to Medicare rates for COVID-19 hospitalizations and advanced Medicare reimbursements, if needed.

However, hospitals and health systems are still seeing operating margins drop even with the financial aid form the CARES Act. The organizations are slated to lose $323 billion in 2020 alone as a result of pandemic-related costs and revenue losses, the American Hospital Association (AHA) reports.

“America’s hospitals and health systems continue to face historic challenges, including unprecedented financial pressures. It is vitally important that hospitals and health systems receive further support and resources to ensure that they can deliver critical care for patients and communities,” the hospital lobbying group stated last week.

It is unclear how much providers will get from the latest stimulus package since text has yet to be released. But package proposals released earlier this month included at least another $35 billion for the Provider Relief Fund.

Given the recent surge in COVID-19 cases, the injection from the proposed stimulus package may not be enough for struggling providers. Groups like AMGA have already called on Congress to replenish the Provider Relief Fund and pass provisions that would make the direct payments to providers untaxable.

AMGA has also advocated for the relaunch of the Medicare Accelerated and Advance Payments (AAP) program, which gave providers upfront reimbursements as a loan. The program stopped accepting applications this fall.

The AHA also recently asked Congress to extend another loan program – the Paycheck Protection Program – which was established under the CARES Act earlier this year.

“Nearly 1,000 hospitals have used the PPP thus far to help maintain vital health care services to their communities. We welcome the extension of the program as proposed in the Emergency Coronavirus Relief Act of 2020, but urge you to maintain eligibility at the current level of 500 or fewer employees for those organizations who need additional support through a second loan,” the group wrote in a Dec. 18 letter to House Speaker Nancy Pelosi.

Congress has debated changes to the Paycheck Protection Program as part of end-of-year-legislation, which could “put the program out of reach for a significant number of hospitals even as the pandemic continues to take a heavy toll on America’s health care infrastructure,” AHA stated.

The latest package proposal would revive the program, largely to allow small businesses still struggling to cover payroll and stay open to qualify for a second forgivable loan. If passed, the bill would allocate $284 billion to the program.

AHA also asked Congress last week to avoid provisions in an end-of-year legislative package that would impact private contract negotiations between providers and payers.

Policymakers have floated in previous COVID-19 stimulus packages provisions that it would ban surprise billing through forbidding contract terms between providers and payers that result in health plans steering patients either directly or indirectly to particular providers and that require plans to contract with all of a health system’s providers.

“We have repeatedly raised concerns about these provisions on behalf of our members and the patients they serve,” AHA said in another Dec. 18 letter to Pelosi and other Congressional leaders. “The provisions could undermine value-based care by enabling health plans to negotiate favorable terms under such arrangements only to undermine providers’ performance by then steering patients elsewhere for care.”

Payers could also “cherry-pick” providers to avoid covering more expensive communities, AHA also stated.

“We are particularly worried that plans would choose not to contract with rural providers in a system, further reducing health care coverage options and access to care in these communities,” the letter said. “Contracting with only some providers in a system also would hurt care coordination as patients would not fully benefit from the integration systems have established across their providers. In addition, these provisions could eliminate access to certain services for enrollees in those plans, as systems generally do not duplicate services at all sites of care.”

Congress has reportedly reached a deal on banning surprise medical bills and it will be included in an end-of-year legislative package.

The package is also slated to include $69 billion for COVID-19 vaccines, testing, and tracing, as well as a $300 boost in weekly unemployment benefits for 11 weeks through March 14, and $600 relief checks for adults and children.

UPDATE 12/21/2020: Lawmakers released the text of the stimulus package today. The package would only add $3 billion to the Provider Relief Fund, although it would allow providers to use the funds for revenues lost compared to budgeted revenue in 2020, which HHS had previously forbid via rulemaking. The stimulus bill would also extend the suspension of the Medicare sequester for a couple of months and cuts to Medicaid disproportionate share payments through fiscal year 2023. Additionally, lawmakers plan to tack on 3.75 percent to Physician Fee Schedule rates in 2021 after CMS finalized cuts in a final rule earlier this year.

*UPDATE 12/22/2020: After the passage of the COVID-19 stimulus and government funding bill, the AHA said it appreciates Congressional support, including changes to Provider Relief Fund reporting requirements, elimination of the cuts to Medicaid disproportionate share payments for the next three years, and a surprise billing solution that includes an arbitration process.

But providers will need more funding moving forward, the hospital group warned.

"While this legislation is welcome news for patients and their families, and the hospitals that provide them and their communities with essential services, there is no question that additional relief will be necessary as we continue to battle the pandemic," Rick Pollack, president and CEO of the AHA, said in a statement. "While we appreciate this funding, hospitals and health systems continue to need additional resources as they deal with a surge in cases and hospitalizations."

Other industry groups have also released their own statements, including the National Association of ACOs (NAACOS), which praised the bill's freeze on higher thresholds for securing the 5 percent bonus under the Quality Payment Program's Advanced APM track, and the American Society for Radiation Oncology (ASTRO), which applauded the bill's delay of the Radiation Oncology Model.

Providers have also been generally supportive of the bill's extension on the suspension of the Medicare sequester cuts for the next three months.