HHS Announces $25.5 Billion in COVID-19 Provider Funding

  • Combined application for American Rescue Plan rural funding and Provider Relief Fund Phase 4 will open on September 29

The Biden Administration announced Friday, September 10, that the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is making $25.5 billion in new funding available for health care providers affected by the COVID-19 pandemic. This funding includes $8.5 billion in American Rescue Plan (ARP) resources for providers who serve rural Medicaid, Children’s Health Insurance Program (CHIP), or Medicare patients, and an additional $17 billion for Provider Relief Fund (PRF) Phase 4 for a broad range of providers who can document revenue loss and expenses associated with the pandemic.

“Home health and hospice will have an opportunity to tap these new funds,” says NAHC President William A. Dombi. “Our concern is that non-Medicare, non-Medicaid home care is still not included. We have been pushing for their inclusion for months, but have seen no movement on such. These are primarily the home care companies that do home care aide services that are private pay along with VA or Area Agency on Aging  funded.”

“This funding critically helps health care providers who have endured demanding workloads and significant financial strains amidst the pandemic,” said HHS Secretary Xavier Becerra. “The funding will be distributed with an eye towards equity, to ensure providers who serve our most vulnerable communities will receive the support they need.”

Consistent with the requirements included in the Coronavirus Response and Relief Supplemental Appropriations Act of 2020, PRF Phase 4 payments will be based on providers’ lost revenues and expenditures between July 1, 2020, and March 31, 2021. PRF Phase 4 will reimburse smaller providers—who tend to operate on thin margins and often serve vulnerable or isolated communities—for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers.

 Who Is Eligible To Apply and How Will Payments Be Calculated?

Phase 4 General Distribution: Consistent with the requirements included in the December appropriations bill, PRF Phase 4 payments will be based on providers’ lost revenues and increased expenditures between July 1, 2020 and March 31, 2021. Phase 4 will also include new elements specifically focused on equity, including reimbursing smaller providers for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers, and bonus payments based on the amount of services providers furnish to Medicaid/CHIP and Medicare patient.

  • 75% of the Phase 4 allocation will calculated based on revenue losses and COVID-related expenses.
    • Large providers will receive a minimum payment amount that is based on a percentage of their lost revenues and COVID-related expenses.
    • Medium and small providers will receive a base payment plus a supplement, with small providers receiving the highest supplement, as smaller providers tend to operate on thin margins and often serve vulnerable or isolated communities.
    • HHS will determine the exact amount of the base payments and supplements after analyzing data from all the applications received to ensure we stay within our budget and funds are distributed equitably.
    • No provider will receive a Phase 4 payment that exceeds 100% of their losses and expenses.
    • HHS will continue to use risk mitigation and cost containment measures in Phase 4 to protect program integrity and preserve taxpayer dollars.
  • 25% of the Phase 4 allocation will be put towards bonus payments that are based on the amount and type of services provided to Medicaid, CHIP, and Medicare patients.
    • HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
    • Providers who serve any patients living in Federal Office of Rural Health Policy-defined rural areas with Medicaid, CHIP, or Medicare coverage, and who otherwise meet the eligibility criteria, will receive a minimum payment.

ARP Rural Distribution: Providers who serve Medicaid, CHIP, and Medicare patients who live in rural communities are eligible for the ARP Rural payments.

  • HHS will make payments to providers based on the amount and type of Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) services provided to rural patients.
    • HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
    • Providers who serve any patients living in Federal Office of Rural Health Policy-defined rural areas with Medicaid, CHIP, or Medicare coverage, and who otherwise meet the eligibility criteria, will receive a minimum payment.

Terms and Conditions: To help ensure that these provider funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with or acquisition of another healthcare provider during their Payment Received Period. Providers who report a merger or acquisition may be more likely to be audited to confirm their funds were used for coronavirus-related costs, consistent with an overall risk-based audit strategy.

PRF Phase 4 will also include bonus payments for providers who serve Medicaid, CHIP, and/or Medicare patients, who tend to be lower income and have greater and more complex medical needs. HRSA will price these bonus payments at the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities, and seniors.

Similarly, HRSA will make ARP rural payments to providers based on the amount of Medicaid, CHIP and/or Medicare services they provide to patients who live in rural areas as defined by the HHS Federal Office of Rural Health Policy. As rural providers serve a disproportionate number of Medicaid and CHIP patients who often have disproportionately greater and more complex medical needs, many rural communities have been hit particularly hard by the pandemic. Accordingly, ARP rural payments will also generally be based on Medicare reimbursement rates.

In order to expedite and streamline the application process and minimize administrative burdens, providers will apply for both programs in a single application. HRSA will use existing Medicaid, CHIP and Medicare claims data in calculating payments. The application portal will open on September 29, 2021. To help ensure that these provider relief funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments. Providers who report a merger or acquisition may be more likely to be audited to confirm their funds were used for coronavirus-related costs, consistent with an overall risk-based audit strategy.

“We know that this funding is critical for health care providers across the country, especially as they confront new coronavirus-related challenges and respond to natural disasters,” said Acting HRSA Administrator Diana Espinosa. “We are committed to distributing this funding as equitably and transparently as possible to help providers respond to and ultimately defeat this pandemic.”

To promote transparency in the PRF program, HHS is also releasing detailed information – PDF (PDF – 175 KB) about the methodology utilized to calculate PRF Phase 3 payments. Providers who believe their PRF Phase 3 payment was not calculated correctly according to this methodology will now have an opportunity to request a reconsideration. Further details on the PRF Phase 3 reconsideration process are forthcoming.

Additionally, in light of the challenges providers across the country are facing due to recent natural disasters and the Delta variant, HHS is announcing today a final 60-day grace period to help providers come into compliance with their PRF Reporting requirements if they fail to meet the deadline on September 30, 2021, for the first PRF Reporting Time Period. While the deadlines to use funds and the Reporting Time Period will not change, HHS will not initiate collection activities or similar enforcement actions for noncompliant providers during this grace period.

For more information about eligibility requirements, the documents and information providers will need to complete their application, and the application process for PRF Phase 4 and ARP Rural payments, visit: https://www.hrsa.gov/provider-relief/future-payments.

HHS Announces $25.5 Billion in COVID-19 Provider Funding

Combined application for American Rescue Plan rural funding and Provider Relief Fund Phase 4 will open on September 29 The Biden Administration announced Friday, September 10, that the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is making $25.5 billion in new funding available for health care…

Democrats Introduce Legislation to Invest in HCBS, Increase Worker Pay

Democrats in the U.S. House of Representatives and Senate unveiled legislation, the Better Care Better Jobs Act,  yesterday to implement the Biden administration’s goal of spending hundreds of billions of dollars on home-based care in the coming years. The legislation would give states far more money to invest in and expand home-and-community-based care programs. States…

Democrats Introduce Legislation to Invest in HCBS, Increase Worker Pay

Democrats in the U.S. House of Representatives and Senate unveiled legislation, the Better Care Better Jobs Act,  yesterday to implement the Biden administration’s goal of spending hundreds of billions of dollars on home-based care in the coming years.

The legislation would give states far more money to invest in and expand home-and-community-based care programs. States would be given $100 million, by no later than one calendar year after enactment of the legislation, to create plans to expand access to Medicaid HCBS and “strengthen” the HCBS workforce.

Over 3.5 million older adults and people with disabilities are currently receiving HCBS.

The bills would “strengthen and expand access to HCBS” by expanding financial eligibility criteria for HCBS to federal limits; requiring coverage for personal care services; expanding supports for family caregivers; adopting programs that help people navigate enrollment and eligibility; expanding access to behavioral health care; improving coordination with housing, transportation, and employment supports; and developing or improving programs to allow working people with
disabilities to access HCBS.

In addition, the bills would “strengthen and expand the HCBS workforce” by addressing HCBS payment rates to promote
recruitment and retention of direct care workers; regularly updating HCBS payment rates with public input; passing rate increases through to direct care workers to increase wages; and updating and developing training opportunities for this workforce as well as family caregivers.

The legislation would permanently authorize protections against impoverishment for individuals whose spouses are receiving Medicaid HCBS and make the Money Follows the Person Rebalancing Demonstration permanent.

Under the terms of the legislation, states would become eligible for permanent increases to their Medicaid match funds of 10 percentage points, an expansion of the temporary boost provided in the American Rescue Plan. Eligibility could require states to expand HCBS access, help people utilize long-term care options, and provide additional support to family caregivers.

In addition, states would need “to promote recruitment and retention of direct care workers” by “regularly updating HCBS payment rates with public input.” The goal would be to increase compensation and training for workers to better attract and retain a stable direct care workforce.

Regular reporting by states would be required to demonstrate the legislative goals are being met. The Centers for Medicare & Medicaid Services (CMS) would receive additional funding for oversight.

The legislation is sponsored by Senators Bob Casey of Pennsylvania and Ron Wyden of Oregon, as well as Debbie Dingell of Michigan; all Democrats and all long-time friends of the home care and hospice community.

Interestingly, the same day the Better Care Better Jobs bills were introduced, President Biden and a bipartisan group of legislators announced a compromise agreement to spend almost $580 billion in new money on the country’s creaky infrastructure. That agreement did not include any funding for long-term care, though President Biden originally called for $400 billion in new spending to be part of the country’s infrastructure investment. Republicans balked at that, saying infrastructure does not include long-term care investments.

With this legislation not included in the bipartisan infrastructure agreement and extremely unlikely to attract support from enough Republicans to pass the Senate, the terms of the Better Care Better Jobs Act could be made into law through the reconciliation process. Many Democrats have signaled determination to use reconciliation to pass elements of Biden’s infrastructure agenda that are not included in the bipartisan agreement reached on Thursday, June 24.