Money for hospitals, testing, vaccines, first responders included in leaner Heroes Act

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Erin McCallister Senior Manager, Health Research Institute, PwC US October 08, 2020

On Oct. 1, the US House passed a revised version of the Health and Economic Recovery Omnibus Emergency Solutions Act, known as the Heroes Act. While a $3 trillion version of the bill died in the Senate earlier this year, the slimmed-down measure includes $2.2 trillion in relief funding for COVID-19 testing, Affordable Care Act (ACA) marketplace outreach, first responders, small businesses, schools, child care and other services.

The revised bill would provide $75 billion for testing, contact tracing and isolation measures, “ensuring every American can access free coronavirus treatment, and supporting hospitals and providers.” It would provide $28 billion for COVID-19 vaccines procurement, distribution and public education campaigns, and $436 billion to help state and local authorities fund first responders and health workers. The Health Care Provider Relief Fund would receive $50 billion to reimburse eligible providers for expenses incurred to prevent, prepare for and respond to COVID-19, in addition to revenues lost during the pandemic.

Private and commercial insurers may have to pick up the tab for COVID-19 testing, mitigation and treatment as the new bill would require them to waive cost sharing retroactive to the beginning of the public health emergency, Jan. 27. The legislation exempts from cost sharing “all items or services that are relevant to the treatment or mitigation of COVID-19,” whether or not the items and services are ordinarily covered by a group health plan or group or individual health insurance.

The language in the bill could be contradictory to an FAQ issued by the Trump administration in June, stating that payers are not required by the Families First Coronavirus Response Act (FFCRA) or the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to cover for return-to-work or general screening testing.

Compared with the earlier version, the revised Heroes Act increases by 400% grant funding for ACA marketplace outreach and education, giving states up to $100 million a year for it through 2023. The legislation also would initiate a two-month special enrollment period for uninsured individuals, without questions or penalties for their previous uninsured periods, and allow people who lost their jobs to receive the maximum ACA subsidy on the exchanges.

In the process of trimming $800 million from the predecessor bill, some elements were omitted, including risk corridors programs, Medicaid waivers, changes to the Medicare Accelerated and Advance Payment programs, and COBRA subsidies to offset the cost of employer-based coverage following job loss.

HRI impact analysis

The bill moves to the Senate, but President Donald Trump has sent mixed messages to Senate Republicans this week about how he thinks they should proceed, and there are limited funds remaining in the CARES Act relief package passed in March. Specifically, as of Oct. 6, $88 billion had been distributed and attested to by providers from the $175 billion CARES Act Provider Relief Fund. Providers can also apply for funding from a new Phase 3 General Distribution fund. HHS distributed $5 billion from the fund last month to support long-term care facilities. A previous analysis by HRI found that hospitals in states hit hard early in the pandemic had received a large chunk of the $22 billion high-impact funding.

There has also been uncertainty over repayment rules for the Medicare Advance Payment Program, as the CARES Act allowed CMS to wait 120 days to recoup the payments but the agency has yet to do so. Separate from the Heroes Act, Congress may extend and relax the payment terms for the program.

The Medicare Accelerated and Advance Payments Improvement Act, introduced by Sen. Jeanne Shaheen, D-NH, would delay repayments for one year, cap the recoupment at 25% of a claim, give all providers up to two years for full repayment, limit the interest rate charged on any balance at 1%, and allow CMS to waive repayment for providers that demonstrate extreme hardship.

While COVID-19 vaccine distribution is a priority, it’s unclear if there are sufficient federal funds to support vaccine allocation and administration. The CARES Act provided $4.3 billion to the Centers for Disease Control and Prevention (CDC) for prevention, surveillance and preparation, but last month, the agency told Congress that it needed more funding for COVID-19 vaccine distribution and education. A week later, HHS said the CDC would allocate $200 million to states for vaccine preparedness.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Ingrid Stiver

Senior Manager, Health Research Institute, PwC US

Erin McCallister

Senior Manager, Health Research Institute, PwC US

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