Brownstein Client Alert, April 4, 2020
On Friday, March 27, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. This bill, aimed at addressing the economic emergency created by the coronavirus pandemic, represented the third phase of Congress’ response to COVID-19. The first bill was focused on emergency funding for federal agencies; the second phase addressed paid leave; the third phase was by far the broadest response to the pandemic. Before ink was dry on the third coronavirus legislative package, lawmakers had already begun planning for the fourth bill.
While Congress and the Trump administration are implementing key provisions of the CARES Act, there is widespread acknowledgment that more policy changes and additional funding are needed to confront this public health crisis. In general, priorities include providing more funding for hospitals, medical providers, and frontline health care workers; and greater access to treatment for patients during the pandemic. House Democrats have been leading the charge and are moving more quickly and aggressively on “phase four.” Republicans have largely expressed a preference to focus on implementing the CARES Act, while at the same time highlighting the need for greater funding to support rural hospitals and physicians.
Both the House and Senate left for recess and will not return until the week of April 20 (at the earliest). Despite an empty Capitol Building in Washington, the development of Phase 4 COVID-19 response is well underway.
We anticipate that this next phase will focus on a variety of policy issues, but lawmakers have been explicit that expanded benefits for the health care industry are a top priority. House Democrats’ Phase 3 draft bill, the Take Responsibility for Workers and Families Act, will likely be the baseline which House Democrats will begin negotiations on provisions to be included in the next package. Republicans have also outlined their policy priorities, such as additional support for rural providers. Below we outline provisions currently being discussed by lawmakers as top health care priorities for Phase 4.
• Assistance for Rural Providers: There is bipartisan support for allocating more federal resources to “rural” providers. Sen. Michael Bennet (D-CO) and Sen. John Barrasso (R-WY) jointly introduced the “Immediate Relief for Rural Facilities and Providers Act,” which would provide emergency grants and add-on payments to certain facilities. There are bipartisan cosponsors in the House for this legislation as well.
• Surprise Billing: There is interest from the Energy and Commerce Committee and Senate Health, Education, Labor, and Pensions (HELP) Committee to include surprise billing in a Phase 4 package, led in part by Sen. Lamar Alexander (R-TN). Leadership interest in this strategy is mixed, fearing that politics surrounding the policy will reduce support for the package as a whole.
• Occupational Safety and Health Administration (OSHA): Guidance and protections for health care workers – specifically, crafting a standard to protect health care workers from infectious disease – is a major concern. This was an early priority Democrats unsuccessfully attempted to include in all three of the prior COVID-relief bills signed into law.
• Health Provider Loan Program: There has been discussion of establishing a loan program for eligible health care organizations with anticipated revenue loss and higher operating costs due to COVID-19.
• Medicaid Fiscal Accountability Regulation (MFAR): House Democrats have been open to calls from hospitals to put a “moratorium” preventing the Centers for Medicare & Medicaid Services (CMS) from finalizing MFAR, which would dramatically change the federal financing structure for state Medicaid programs. Such changes would be difficult for states and providers to implement, particularly while addressing the challenges of COVID-19.
• Disproportionate Share Hospitals (DSH): The CARES Act delayed DSH cuts until Nov. 30, 2020. House Democrats proposed increasing DSH allotments by 2.5% during the COVID-19 emergency. It is also possible that stakeholders will be successful in their push for a permanent repeal of the DSH cuts – a longtime policy goal.
• Health-Related Tax Relief: In their Phase 3 draft, House Democrats sought to provide specific tax relief for hospitals related to COVID-19 care and expenses. One provision would provide a payroll tax credit for charity care, based on the overall amount of COVID-related charity care a hospital provided in 2020. Another proposed payroll tax credit would help offset the additional costs hospitals incur to acquire equipment and make certain improvements to meet the increased patient demand due to COVID-19.
• Add-on Payment for Clinicians: The CARES Act created a 20% add-on payment for hospitals treating COVID-19 patients. There have been discussions about adding a 20% add-on payment in the fourth bill.
Click here to read more Brownstein alerts on the legal issues the coronavirus threat raises for businesses.