House Democrats on Tuesday unveiled their opening bid for Congress' fifth round of COVID-19 relief legislation, including $100 billion for healthcare providers with new strings attached.
Unlike prior COVID-19 relief bills, House Democrats did not pre-negotiate terms with the GOP-Senate or the White House, so it is unlikely that the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act will be signed in its current form. However, it's a window into Democrats' priorities for future COVID-19 relief.
The most important provision for hospitals is a new $100 billion allocation for the healthcare provider relief fund, but the money comes with new guardrails. Lawmakers had previously given HHS wide authority to distribute $175 billion to providers.
The new payment system would require providers to submit quarterly documentation of their coronavirus-related expenses and lost revenue compared with the prior year, and HHS would reimburse 100% of expenses and 60% of lost revenue. If a provider's revenue decreased by less than 10%, they would not be eligible for payments.
Providers would have to submit itemized documentation of expenses and revenue projections for the upcoming quarter. The HEROES Act would prohibit providers from double-dipping with other funding streams, and would limit the administration from using more than $10 billion to pay hospitals for COVID-19 care for the uninsured.
The guardrails would also apply to any of the $175 billion in funds Congress had already earmarked for providers in previous bills that HHS has not yet obligated. HHS has so far sent out $72 billion and outlined plans for additional allocations.
House Democrats also proposed relaxing the repayment terms for $100 billion in Medicare accelerated and advance payments. Providers would have one year before they had to begin repaying the loans, recoupment would be limited to 25% of Medicare claims, and the full repayment deadline would be extended to two years after the payment is issued. After that deadline, the payments would begin accruing interest at a 1% rate, compared with the current interest rate above 9%.
Greater New York Hospital Association President Kenneth Raske told members that the final repayment timeline is still unclear. The group advocated for relaxing the payment requirements, and said it will continue to lobby for the loans to be at least partially forgiven.
The bill includes a grab bag of other policies healthcare providers had asked for: an increase in federal Medicaid matching funds from 6% to 14%, a prohibition on HHS finalizing the Medicaid Fiscal Accountability Rule and a 2.5% increase in Medicaid disproportionate-share hospital payments for fiscal years 2020 and 2021.
Insurers also got a few of their priorities included. The bill would require a two-month special enrollment period for Affordable Care Act exchanges and a 100% subsidy for COBRA coverage for nine months.
But the bill also mandates coverage for coronavirus treatments without cost-sharing for individuals covered by Medicaid, Medicare, Medicare Advantage, private health insurance plans, TRICARE, Department of Veterans Affairs health plans and the Federal Employee Health Benefit Program.
Healthcare workers would be eligible for up to $10,000 of hazard pay under the HEROES Act. Employers would have to apply for the funding. The bill also provides funding for child care for essential workers.
"We must have empathy for our heroes. The healthcare workers for how exhausted and how stressed they are in doing their jobs," House Speaker Nancy Pelosi (D-Calif.) said.
Democrats also propose a new $75 billion investment in COVID-19 testing and contact tracing, and $875 billion to help state and local governments cover expenses and lost revenue.
While Senate Minority Leader Chuck Schumer (D-N.Y.) threw his support behind Pelosi's bill Tuesday, Republican Senate leaders have not given an indication of their timing for a fifth legislative package. Republicans have said the next relief bill must include liability protections for businesses, which House Democrats left out.
Federation of American Hospitals President and CEO Chip Kahn said he supports the HEROES Act and appreciated the funding for healthcare infrastructure, but also wants final legislation to protect hospitals from liability for COVID-19 care.
"To further secure the care for patients and prevent obstacles to service, it is vital the next legislative package also includes additional crucial priorities such as COVID-19 medical liability protections for hospitals and caregivers," Kahn said in a statement.
Instead, Democrats reiterated their call for the Occupational Safety and Health Administration to issue standards for infectious disease exposure plans, a policy that has been left out of prior relief bills.