Additional Financial Support for Providers: Provisions from the American Rescue Plan Act

After weeks of negotiation, this afternoon President Biden is expected to sign into law the American Rescue Plan Act of 2021 this Friday. The $1.9 trillion spending bill includes measures for a national vaccination program, additional COVID-19 testing and tracing, COVID-19 treatment, and additional financial relief for state, local, and tribal governments. The new measure also includes relief for Americans in the form of extended unemployment benefits, direct case payments, childcare support for frontline workers, and financial support for small businesses. The American Rescue Plan also reinstates mandatory paid family and medical leave provisions that were established by the Families First Coronavirus Response Act through Sept. 30, 2021.

While the legislation does not add any additional funding to the Provider Relief Fund, the Act increases substantially the FEMA Disaster Relief Fund by appropriating an additional $50 billion through Sept 30, 2025. Moreover, the Act provides relief for certain providers and allocates funding for forward-looking vaccine distribution as well as to cover lost revenues resulting from the pandemic. Allocations include:

  • $8.5 billion for rural health care providers to support vaccination efforts, address medical surge capacity, increase telehealth capabilities, and recover lost revenues due to the pandemic;
  • $500 million in Emergency Rural Development Grants for rural health care through the Department of Agriculture;
  • $7.6 billion to health centers, federally qualified health centers, and the Papa Ola Lokahi for COVID-19-related purposes;
  • $200 million to Skilled Nursing Facilities to develop and disseminate COVID-19 prevention protocols in conjunction with other quality improvement organizations;
  • $250 million to states and territories to deploy strike teams that can assist Skilled Nursing Facilities experiencing COVID-19 outbreaks;
  • $7.5 billion to the CDC and state and local governments as supplemental funding to distribute and track vaccine distribution;
  • $350 billion for states, territories, and Tribal governments to mitigate the fiscal effects resulting from the PHE;
  • $10 billion under the Defense Protection Act to manufacture and acquire medical supplies, diagnostic equipment, medical devices, drugs and biologics, PPE, and equipment essential to combatting the pandemic;
  • $6.05 billion for research, development, manufacturing, production, and purchasing of vaccines, therapeutics, and other ancillary products for COVID-19 or any other disease that could potentially lead to a pandemic;
  • $47.8 billion for COVID-19 testing, contact tracing, and mitigation activities;
  • $1.75 billion for disease surveillance and genomic sequencing;
  • $330 million for teaching health centers that operate graduate medical education programs;
  • $3.5 billion for block grants addressing mental health and substance use disorders;
  • $80 million for mental and behavioral health training; and
  • $100 million for Behavioral Health Workforce Education and Training Programs.

The Act also grants state, local, and territorial public health departments funding to establish and strengthen the workforce at public health departments. Additionally, funds have also been allocated to Indian Health Services to cover lost reimbursements, enhance technology infrastructure, enhance vaccination tracking efforts, and better support the public workforce.

The legislation also makes changes to federal healthcare coverage by expanding eligibility for Medicaid. Added coverage includes:

  • Changes in Medicaid financing eligibility rules to allow states to provide the option of extending CHIP to pregnant individuals for 12 months postpartum;
  • Incentive for states to expand Medicaid on a temporary basis by increasing the Federal Medical Assistance Percentage by 5% for states expanding coverage during the public health emergency. The bill also includes measures to counteract any consequences from this increase;
  • Enhancing FMAP for states that implement a mobile crisis service program for individuals experiencing a mental health or substance use disorder crisis;
  • Medicaid and CHIP coverage of vaccines and treatment without beneficiary cost-sharing;
  • Elimination of the Medicaid drug rebate cap, with an effective date of Jan. 1, 2024; and
  • Allowed inclusion of outpatient drugs used for COVID-19 prevention or treatment in the Medicaid Drug Rebate Program.

If you have any questions regarding just how the new American Rescue Plan Act affects your entity, or for assistance with FEMA or other COVID relief funding/planning efforts, please reach out to the Advis team of experts at 708-478-7030.

Published: March 10, 2021