Stimulus provides relief, clarity for healthcare providers

Congress passed a $900 billion COVID-19 relief package on Dec. 21, which was signed by President Trump on Dec. 27. While most of the coverage of the legislation has focused on a new round of stimulus checks and unemployment benefits, the legislation includes some notable components for healthcare providers.

Provider Relief Fund — An additional $3 billion was allocated, as well as clarification that providers can calculate lost revenue for the Provider Relief Fund reporting requirements using the difference between such provider’s budgeted and actual revenue budget if the budget had been established and approved prior to March 27, 2020. That is the second flip-flop on such guidance and underscores the importance of ensuring that providers have the most updated guidance before reporting their Provider Relief Fund expenditures ahead of the spring 2021 deadline.

Changes to the 2021 Physician Fee Schedule:

• The 2021 Physician Fee Schedule Final Rule issued on Dec. 1, 2020, contemplated an 11% reduction in the conversion factor used for payment calculations.
• The new stimulus bill blocks newly created add on code G2211 (relating to visit complexity) for three years, and injects $3 billion into the Physician Fee Schedule in 2021 (equivalent to a 3.75% increase in payment). The two changes result in a conversion factor reduction of 4% instead of the 11% anticipated cut.
• The legislation also delays the 2% Medicare sequester cuts that were slated to resume Jan. 1, 2021, for three additional months.

Medicaid Disproportionate-Share Hospital (DSH) Payments — Delays planned cuts through fiscal year 2023.

Paycheck Protection Program — The legislation sets aside an additional $284 billion toward small-business loans. Importantly, the legislation specifies that these loans are forgivable and the amount of the forgiven loan will not be included in taxable income. The legislation provides for an additional $248 billion for a second forgivable loan for businesses with 300 or fewer employees that can demonstrate a 25% loss of revenue for any quarter in 2020. Paycheck Protection Program eligibility has specifically been expanded to nonprofits and critical access hospitals.

Surprise Medical Billing — Providers must not bill patients more than the in-network cost-sharing amount for any out-of-network emergency care, for certain ancillary services, and for out-of-network care at in-network facilities without the patient’s informed consent. Under the new legislation, providers have 30 days to negotiate with payers to settle out-of-network claims. If parties are unable to reach a negotiated agreement, the legislation provides  a binding arbitration process for resolution of the dispute.

Changes to Expanded Employee Leave — The legislation did not renew expanded employee leave requirements put in place by the Families First Coronavirus Relief Act. After Dec. 31, 2020, employers are no longer required to provide expanded paid leave for COVID-19 related reasons. However, employers who voluntarily do so will be eligible for the tax credits available under the Families First Coronavirus Relief Act through March 2021.

Amie K. Alexander is an attorney with Friday Eldredge & Clark. Her practice is focused in the area of healthcare where she works primarily on various corporate and compliance matters.  The opinions expressed are those of the author.