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Year-End Package Contains COVID-19 Relief, Medicaid and Health Extenders, Surprise Billing

December 23, 2020

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CONTACTS
Allyson Perleoni, Manager, Government Relations
Jason Kleinman, Senior Legislative Analyst, Govt. Relations
Brett Roude, Legislative Analyst
Christa Wagner, Senior Legislative Analyst

Congress passed the Consolidated Appropriations Act, 2021 (H.R. 133) on Monday, Dec. 21 — a year-end package containing fiscal year (FY) 2021 appropriations [see related story], $900 billion in COVID-19 relief, an increase to the Medicare graduate medical education program [see related story], the elimination of upcoming Medicaid disproportionate share hospital (DSH) cuts, and an extension of key health care programs and health extenders. AAMC President and CEO David J. Skorton, MD, issued a statement expressing gratitude to Congress for completing the legislation, noting that the legislation “will avoid catastrophic lapses in the continued fight against the COVID-19 pandemic and help safeguard the health and well-being of patients and communities across the nation.”

The legislation contains several provisions critical to academic medicine, including COVID-19 relief, health extenders, and surprise medical billing.

COVID-19 Relief

The legislation provides $8.75 billion in emergency funding to the Centers for Disease Control and Prevention for coronavirus vaccine efforts, including $300 million for vaccine outreach to high-risk and underserved populations and another $20 billion to the Biomedical Advanced Research and Development Authority for expenses related to vaccine and therapeutic development. The measure also allots $3.25 billion to the Strategic National Stockpile.

Additionally, the package invests $22.4 billion in emergency funding through the Public Health and Social Services Emergency Fund for testing and contact tracing efforts, including $2.5 billion specifically targeted to high-risk and underserved populations. 

The legislation provides an additional $3 billion for the Provider Relief Fund (PRF) — which was created to reimburse hospital and health care providers for their COVID-19-related expenses and lost revenue. It also makes policy changes to the administration of the PRF, including (1) ensuring 85% of the unobligated funds are allocated equitably via applications that consider financial losses and changes in operating expenses; (2) clarifying that payments made prior to Sept. 19, 2020, be calculated using the Frequently Asked Questions guidance released by the Department of Health and Human Services on June 19, 2020; and (3) clarifying that eligible health care providers may transfer all or any portion of PRF payments among the subsidiary eligible health care providers of the parent organization.  

To mitigate the financial effects of the pandemic, the legislation provides a one-time, one-year increase in the Medicare physician fee schedule of 3.75% to support physicians and other professionals in adjusting to changes in the Medicare physician fee schedule during 2021. It also extends the moratorium on the 2% Medicare sequester until March 31, 2021.

The legislation also provides $1.25 billion in emergency funding available to the National Institutes of Health through Sept. 30, 2024, divided as $1.15 billion for research and clinical trials related to long-term studies of COVID-19 and $100 million for the Rapid Acceleration of Diagnostics (RADx) program.  

The legislation also includes $82 billion for the Education Stabilization Fund — including $20.4 billion allocated for the Higher Education Emergency Relief Fund (HEERF) and $4 billion allocated for the Governor’s Emergency Education Relief Fund. An institution’s HEERF allocation will be determined by a formula in which 75% of the allocation is based on the number of Pell Grant students, 23% is based on the number of non-Pell students, and 2% is based on the number of exclusively online Pell students. The formula accounts for both full-time equivalent enrollment and head count enrollment.  

Medicaid and Other Health Extenders

The legislation eliminates the FY 2021 Medicaid DSH cuts and delays the FYs 2022 and 2023 cuts until FYs 2026 and 2027. It also creates new reporting requirements on Medicaid supplemental payments under a state plan amendment. If available, states would be required to report provider-level data on these supplemental payments, including the amount of each payment made to each eligible provider and its intended purpose. Each report must ensure that total payments made to an inpatient hospital provider (excluding DSH payments or supplemental payments through waivers) do not exceed the provider-specific upper payment limits.

The legislation also provides $310 million in mandatory funding for the National Health Service Corps, $126.5 million for the Teaching Health Center Graduate Medical Education program, and $4 billion for Community Health Centers for each of the FYs 2021-2023.  

Surprise Billing

A version of the bipartisan, bicameral agreement reached by key committees earlier this month was included in the legislation [see Washington Highlights, Dec. 18]. The final legislation would hold patients harmless from surprise medical bills and allow providers and insurers 30 days to negotiate an agreement with the option to go to an independent arbitration process. Through the arbitration process, the independent dispute resolution entity must consider certain factors, including the median in-network rate, relevant information brought by either party, information requested by the reviewer, the provider’s training and experience, patient acuity and the complexity of furnishing the item or service, and — in the case of a provider that is a facility — the teaching status, case mix, and scope of services of such a facility. Earlier versions of the agreement contained timely billing provisions that were not included in the final text.

Tax Extenders and Higher Education

The legislation includes tax extenders, including credits for student aid and extensions for COVID-19-related tax programs. The bill also simplifies the Free Application for Federal Student Aid (FAFSA) and grants the secretary of education the ability to regulate an institutions’ cost of attendance.  

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