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Analysis

AHA Lauds $117B Coronavirus Emergency Package as 'Important First Step'

By John Commins  
   March 26, 2020

The funding is part of a massive $2 trillion emergency stimulus package unanimously passed by the Senate late Wednesday.

The American Hospital Association is cheering the Senate's approval of a historic $117 billion stimulus package for the nation's besieged hospitals but warns that more resources will be needed to fight the coronavirus pandemic.

"While this legislation is an important first step forward, more will need to be done to deal with the unprecedented challenge of this virus," AHA President and CEO Rick Pollack said.

"We will continue to work with Congress to make sure providers on the front lines – hospitals, physicians and nurses – remain prioritized for future federal assistance as the COVID-19 pandemic spreads," he said.

The funding is part of a massive $2 trillion emergency stimulus package unanimously passed by the Senate late Wednesday. The House is expected to vote on the bill on Friday, and President Donald Trump has said he will sign the bill.

The 880-page bill includes: emergency funds for hospitals; a delay for the Medicaid Disproportionate Share Hospital cut; temporary elimination of the Medicare sequester; and a Medicare diagnosis-related group add-on payment.

AHA estimated the value of the stimulus package for hospitals at $117 billion, of which $100 billion is earmarked for healthcare-related expenses or lost revenues attributed to COVID-19.

Specifically, the stimulus would:

  • Eliminate the $4 billion in Medicaid DSH cuts this year, and reduce the cut for fiscal year 2021 to $4 billion from $8 billion. The FY 2021 cuts would be delayed until Dec. 1, 2020. No additional cuts would be added after FY 2025.
     
  • Eliminate the Medicare sequester from May 1 through Dec. 31;
     
  • Provide a 20% add-on to the DRG rate for patients with COVID-19, applied to patients treated at inpatient prospective payment system hospitals;
     
  • Allow hospitals to receive an advance on future Medicare payments.
     
  • Increase the amount most hospitals could receive based on prior payments to 100% (from 70%). Critical access hospitals would be eligible for up to 125%. Hospitals would have four months until recoupment, and one year or longer before repayment.
     
  • Provide flexibility for post-acute care providers to increase capacity without penalties during the emergency period.
     
  • Waive the "50% Rule," for long-term care hospitals, and the site-neutral payment policy.
     
  • Waive the three-hour rule for inpatient rehabilitation facilities. 

In addition, for-profit and not-for-profit hospitals with fewer than 500 employees would be eligible for up to $10 million in emergency loans to pay for salaries, healthcare and other employee-related expenses benefits that could be eventually forgiven if no layoffs occur during the emergency period.

Bruce Siegel, MD, president and CEO of America's Essential Hospitals, said the emergency funding gives safety net hospitals "breathing room," but that more aid may soon be needed.

"Time will tell how far this funding will go and how much more our hospitals will need," he said. "We will continue to work with Congress and the administration to ensure we answer those questions and consider how to ease regulatory challenges, such as the pending Medicaid Fiscal Accountability Regulation, that would severely constrain safety-net funding just when it’s needed most."

“While this legislation is an important first step forward, more will need to be done to deal with the unprecedented challenge of this virus.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The 880-page bill includes: emergency funds for hospitals; a delay for the Medicaid Disproportionate Share Hospital cut; temporary elimination of the Medicare sequester; and a Medicare diagnosis-related group add-on payment.

AHA estimates the value of the stimulus package for hospitals at $117 billion, of which $100 billion is earmarked for healthcare-related expenses or lost revenues attributed to COVID-19.


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