In a 208-199 vote, the House this evening approved a new round of COVID-19 emergency funding, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800).
House Committee chairs introduced the HEROES Act May 12. The legislation represents a starting point for Democrats as they prepare for potential negotiations with Senate Republicans and administration on the next COVID-19 supplemental package.
The HEROES Act would provide an additional $3 trillion in aid to various sectors across the economy, building on programs established in the Families First Coronavirus Response Act, Coronavirus Aid, Relief, and Economic Security (CARES) Act and Paycheck Protection and Health Care Enhancement Act. It would augment relief for workers and assistance to employers, create a national infrastructure for testing and contact tracing, improve the drug and device supply chains, and increase financial support for states and localities, among other provisions.
While the HEROES Act, as introduced, will not become law, it contains a number of provisions important to essential hospitals and for which the association will advocate in any final COVID-19 supplemental legislation. A summary of key provisions follows.
Emergency Funding
- The act would add $100 billion to the Public Health and Social Services Emergency Fund for the Provider Relief Fund to reimburse for health care–related expenses or lost revenue attributable to COVID-19, with terms and conditions attached.
- Hospitals and providers would need to apply for emergency funds quarterly (including the first quarter of 2020, if funds had not been sought during that quarter).
- Reimbursement would be calculated by the total cost of eligible expenses plus 60 percent of lost revenues, minus any grants awarded through funding opportunities included in previous COVID-19 legislation and/or Provider Relief Fund payments received.
- Lost revenues would be calculated by total net patient revenue of the provider for the corresponding quarter in 2019 minus net patient revenue of the provider for such quarter, minus savings attributable to forgone wages, payroll taxes, and benefits of furloughed or laid off employees.
- Net patient revenue would be calculated by taking the sum of 200 percent of the total Medicaid of reimbursement, 125 percent of Medicare reimbursement, and 100 percent of all other reimbursement received by the provider during the quarter for all items and services.
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- Eligible expenses would include:
- building or construction of temporary facilities;
- leasing of property;
- purchases of medical supplies and personal protective equipment (PPE);
- COVID-19 testing costs;
- workforce increases;
- workforce training;
- emergency operations centers;
- construction or retrofitting of facilities;
- mobile testing units;
- surge capacity measures;
- workforce retention; and
- other items and services determined by the Secretary of Health and Human Services (HHS).
- Terms and conditions
- Emergency funds cannot be used for executive compensation.
- Hospitals receiving emergency funds are prohibited from balance billing or charging uninsured COVID-19 patients during the course of the public health emergency.
- The terms attached to the emergency funds in this bill also would apply to the unobligated Provider Relief Funds from the CARES Act and the Paycheck Protection Program and Healthcare Enhancement Act.
- Eligible expenses would include:
Medicaid
The HEROES Act would:
- block HHS from finalizing the Medicaid Fiscal Accountability Regulation or any similar proposed regulations until the end of the COVID-19 public health emergency;
- increase state Medicaid disproportionate share hospital allotments by 2.5 percent for fiscal years 2020 and 2021.
- The act includes a Sense of the Congress that these funds should be targeted to disproportionate share hospitals that treat the most COVID-19 cases;
- increase the Federal Medical Assistance Percentage (FMAP) by 14 percentage points from July 1, 2020, to June 30, 2021.
- After June 30, 2021, the FMAP bump would return to 6.2 percentage points, the current enhanced rate under the Families First Coronavirus Response Act, until the last day of the calendar quarter during which the public health emergency ends.
- FMAP must not exceed 95 percent.
- The act would narrowly amend the maintenance of effort requirements in the Families First Coronavirus Response Act to allow for access to enhanced FMAP in the case of a specific eligibility change for home- and community-based services (HCBS);
- increase FMAP for HCBS by 10 percentage points from July 1, 2020, to June 30, 2021;
- allow Section 1115 waivers set to expire on or before Feb. 28, 2021, to be extended through the end of 2021; and
- include “COVID-19 Concern” as an emergency coverage condition for Medicaid.
Medicare
The HEROES Act would:
- modify the Medicare Accelerated and Advance Payment Program to lower the loan interest rate from 10.25 percent to 1 percent and extend the interest-free repayment timeline to one year and full repayment timeline to two years;
- provide an outlier payment on inpatient claims for any amount greater than the traditional Medicare payment to cover excess costs hospitals incur when treating COVID-19 patients;
- prohibit providers from balance billing patients receiving COVID-19 treatment under Medicare parts A, B, or C if such service is included in a claim with an ICD–10–CM code related to COVID–19;
- create a new special enrollment period for Medicare-eligible individuals during the COVID-19 public health emergency; and
- require the Centers for Medicare & Medicaid Services (CMS) to re-establish a rural floor for the Medicare hospital area wage index for hospitals in all-urban states.
Coverage
The HEROES Act would:
- ensure coverage for COVID-19 treatment without cost-sharing under Medicaid (including uninsured individuals in states that opted to extend those beneficiaries eligibility through Medicaid), Medicare, commercial insurance, TRICARE, Veterans Affairs health plans, and the Federal Employee Health Benefit Program;
- provide Medicaid coverage for incarcerated individuals up to 30 days before returning to the community;
- establish a two-month special enrollment period through the federal health insurance exchange;
- extend retroactively the requirement for free COVID-19 testing to the beginning of the public health emergency; and
- provide health insurance premium subsidies until Jan. 31, 2021, for individuals eligible for COBRA and for workers who have retained their employer-sponsored health insurance but are furloughed due to COVID-19.
Data Collection and Reporting, Health Inequities
The HEROES Act would:
- establish a portal for hospitals to share information on COVID-19 inventory — such as PPE, ventilators, and other medical supplies — and capacity, including case counts and workforce;
- build on the demographic data collection and reporting requirements in the Paycheck Protection and Healthcare Enhancement Act, which require disaggregating COVID-19 testing, cases, hospitalizations, and mortality data by race and ethnicity, among other factors;
- requires the Centers for Disease Control and Prevention (CDC) to work with public health departments to better collect and more regularly report demographic data on COVID-19; and
- provide funding for federal, state, tribal, and local efforts to modernize and improve health inequities data collection and to conduct research into health inequities, including COVID-19.
Hazard Pay for Essential Workers
The HEROES Act would:
- establish a $200 billion ‘‘COVID–19 Heroes Fund’’ under the Department of the Treasury to provide grants to employers, including hospitals, for premium hazard pay to essential workers. Grants also cover associated payroll and employer taxes. Essential workers are eligible for up to $13 per hour, in addition to their regular pay, up to $10,000. Essential workers earning up to $200,000 per year are eligible for premium pay up to $5,000.
Graduate Medical Education
- The act would authorize grants to schools of medicine in rural, underserved, or Minority-Serving Institutions to build new schools of medicine and expand, enhance, modernize, or support existing schools of medicine.
Physician Workforce and Immigration Employment Visas
The HEROES Act would:
- extend all visas until 90 days after the pubic emergency ends; and
- expand green card application opportunities for certain physicians serving as essential workers during the public health emergency and expedite processing of immigration petitions and applications for applicants who intend to practice medicine, provide health care, engage in medical research, or participate in a graduate medical education or training program involving the diagnosis, treatment, or prevention of COVID–19.
- Provisions would not apply to nurses or other health care workers.
Tax Issues
The HEROES Act would:
- modify the employee retention tax credit established under the CARES Act to allow federal, state, and local government and political subdivision employers to claim the credit based on closures due to governmental orders. Governmental employers may not qualify for the credit based on drop in revenues; and
- amend the payroll tax credit created under the Families First Coronavirus Response Act to allow federal, state, and local government employers to qualify.
Rural Health Care
- The act would temporarily expand the Federal Communications Commission Rural Health Care Program by $2 billion to partially subsidize providers’ broadband service. Authorized subsidies would flow to all nonprofit and public hospitals, not just rural ones.
Emergency Preparedness
- The act would allocates $4.575 billion to the Assistant Secretary for Preparedness and Response to respond to coronavirus, including:
- $3.5 billion for Biomedical Advanced Research and Development Authority (BARDA) for therapeutics and vaccines;
- $500 million for BARDA to support U.S.-based, next generation manufacturing facilities;
- $500 million for BARDA to promote innovation in antibacterial research and development; and
- $75 million for the Office of Inspector General
Health Care Workforce Protections
The HEROES Act would:
- require the Department of Labor, through the Occupational and Safety Health Administration (OSHA), to issue emergency temporary standards to protect employees, including health care workers, from COVID-19. Permanent standards must be developed within two years after the bill becomes law.
- Employers must develop and implement a comprehensive infectious disease exposure plan and anti-retaliation policy to protect employees raising concerns.
- OSHA has enforcement authority in cases where sufficient access to PPE is not possible;
- enable a surveillance system to track and investigate work-related COVID-19 cases;
- extend COVID-19 emergency paid family and sick leave benefits through the end of 2021;
- expand the Social Services Block Grant to allow states to pay for family and child care for essential workers responding to COVID-19, including individuals who work in the health care sector. There is no income limit for essential workers to be eligible for care assistance. The legislation appropriates $850 million for this purpose.
