14-May-2020 COVID-19 Resource Updates

Subject: House Democrats unveil the HEROES Act

Major healthcare takeaways:

Medicare Accelerated Payment Program: Section 30206 would lower the interest rate to one percent for loans to Medicare providers made under the Accelerated and Advance Payment Program. Also, at a hospital's request, the Secretary shall provide one year before claims are offset to recoup such payment; reduce the per-claim recoupment percentage not to exceed 25 percent, and allow no less than two years from the date of the first accelerated payment before requiring that the outstanding balance be paid in full.

The bill also would require an HHS report to House and Senate committees of jurisdiction on the total payments from the Medicare loan programs and the number of providers receiving the payments every two weeks during the public health emergency. After the emergency, HHS would be required to inform the lawmakers about recoupments of the loans and the outstanding program balances, as well as accrued interest every six months until all the loans are repaid.

Notably, CMS recently paused the Part A program for review and suspended the Part B loan program. The agency said that more than $92 billion had been provided in Part A loans, while more than $8 billion was released in Part B loans.

Provider Relief Fund: The legislation includes an additional $100 billion for the fund. The bill does not include great specificity regarding how the money should be allocated. The authorizers created rules and processes for distribution, including limitations regarding utilizing the funds for lost revenue. Appropriators could still address this in a more detailed fashion should they so choose. Note the original CARES Act created the $100 billion fund while the most recent coronavirus stimulus package infused an additional $75 billion into the fund. If passed as currently written, this provision would bring the fund to $275 billion. The Senate will likely be reluctant to add this volume of funding as they want greater transparency around where the most recent $75 billion will be directed before dolling out more money.

Medicaid: The bill would increase the Federal Matching Assistance Percentage (FMAP) by 14 percentage points through June 30, 2021. The legislation would also increase the FMAP by ten percentage points for state Medicaid services for patients in home and community-based care. Also, as drafted, the HHS secretary also cannot take any action to finalize or implement the Medicaid Fiscal Accountability Rule (MFAR) during the federal government's COVID-19 emergency; it also cannot implement any rule similar to those provisions related to the Medicaid program or the State Children's Health Insurance Program (CHIP) during the same time period. The bill also temporarily increases Medicaid disproportionate share hospital (DSH) allotments by 2.5 percent.

Medicare: The bill would provide an outlier payment for inpatient claims for any amount over the traditional Medicare payment to cover excess costs hospitals incur for more expensive COVID19 patients until January 31, 2021.

Testing: The Heroes Act would require an updated strategic testing plan with certain benchmarks and timelines. It would give $75 billion in grants to public health departments to support testing, surveillance, contact tracing, and containment activities. Public health departments would be required to use culturally competent and multilingual approaches to contact tracing and public awareness campaigns. The bill also revives a previously proposed mandate that all insurers cover treatment for the coronavirus without cost-sharing.

Telehealth: The bill would provide additional funding to the Indian Health Service for telehealth services. Otherwise, other provisions are largely focused on one-time emergency funding of $5.25 billion to the Federal Communications Commission (FCC) for an “E-rate to the Home” initiative. It ensures that all broadband providers are eligible to participate (provider-neutral). Many stakeholders continue to push for permanent changes for telehealth in future relief packages.

Miranda Franco | Holland & Knight
Senior Policy Advisor
Holland & Knight LLP


Heroes Act Summary.pdf

Heroes Act Health Summary.pdf

Phase 4 summary Approps.pdf