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What Healthcare Finance Leaders Need to Know About the $1.9T Stimulus Package

Analysis  |  By Jack O'Brien  
   March 22, 2021

The recent stimulus package includes meaningful changes beyond COVID-19 relief funding.

The $1.9 trillion stimulus package signed by President Joe Biden earlier this month marks the latest effort by the federal government to support healthcare organizations amid the COVID-19 pandemic.

The American Rescue Plan Act includes direct funding for vaccination efforts, structural incentives for Medicaid expansion under the Affordable Care Act (ACA), and provisions targeting uncompensated care, among others.

Three healthcare stakeholders spoke with HealthLeaders about what executives need to know about the latest federal stimulus package.

Positives for providers

Becky Greenfield, a partner with Wolfe I Pincavage, a Miami-based law firm, told HealthLeaders that there are a lot of positive elements for providers in the stimulus package.

Greenfield added that from a provider perspective in Florida, the ACA is experiencing a temporary extension, as states that have not yet expanded Medicaid will still receive a 5% increase in their Medicaid assistance percentage. Additionally, the law's tax credit subsidies will be expanded to individuals above 400% of the poverty line for the next two years.

"Although it may not seem like a direct benefit, per se, to facilities, when people can afford health insurance and have coverage either through the individual marketplace or through Medicaid, that means people have coverage for preventative care and other providers can make sure people don't get sick and have expensive healthcare bills," Greenfield said. "But the other piece is that it minimizes uncompensated care, meaning care that the hospital will never be paid for."

Related: 4 Takeaways From the First Days of the CMS Price Transparency Rule

Another major benefit for hospitals is that the bill protects DSH payments, according to Greenfield, even the federal government would increase the fund matching for states that chose to expand Medicaid.

Greenfield mentioned two healthcare concerns that were not addressed in the most recent stimulus package: the fate of the 2% Medicare sequestration cuts and automatic payment cuts that would offset deficits. 

"Then one other thing that wasn't addressed for 2022 is that there was a 3.75% adjustment to Medicare payments for physicians; that adjustment will go away without congressional action," she added.

Expansion of ACA is good for providers, payers

The American Rescue Plan includes the "largest expansion" of the ACA since its implementation, according to Carrie Kincaid, vice president of individual markets at Priority Health, a Grand Rapids-based health insurer.

Kincaid said that there is a high likelihood that more people who were uninsured will enter the individual market, which is a positive development for providers.

Additionally, individuals currently enrolled in the ACA will be able to save "a significant amount of money" on their premiums due to the expansion of subsidies.

Related: Priority Health Exec: Pandemic Is Opportunity for Payers, Providers to Advance VBC

"I think it's fair to say that the [Biden] administration said a key platform for them is broad coverage available to all and they want that to be affordable," Kincaid said. "I think that we would view that as a win as well, too. We don't want people to be uninsured, insurance is important and the pandemic certainly has proven that point. Insurance is much more important to a broader audience during a time where maybe it's even more challenging to afford it than usual."

Though some of the policies included in the relief bill are temporary, Kincaid noted that the provisions will be in place for the next two years, which gives individuals time to "get settled into these plans."

Package is 'fantastic'

Susan Feigin Harris, a partner at Morgan, Lewis & Bockius LLP, said the latest stimulus package is "fantastic" for the healthcare community and differs from the previous relief bills by focusing on virus containment efforts rather than simply providing additional financial support through the Provider Relief Fund.

"I think there may be a perspective in the provider community where there have to be direct dollars [in the stimulus package] and I think that undersells the real nature of our hospital system," Harris said. "[Having] more people access to care on the front end has been the focus for all these years since the ACA. How do we ensure that we not only have more coverage but that we invest in preventive healthcare? The way you do that is by ensuring that people have access to care and that's what the investment in the ACA subsidies does."

In addition to bolstering the vaccine rollout and changes affecting Medicaid, Harris said that the package also includes modifications to graduate medical education programs.

Harris said her advice for provider executives would be to explore opportunities supported in the package, including additional funding for telehealth services, vaccines, and therapeutics. 

Related: What SCOTUS Oral Arguments in ACA Case Mean for Hospitals

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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