The Paycheck Protection Program and Health Care Enhancement Act: Summary of Key Health Provisions

On April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act was signed into law, marking the fourth major legislative initiative to address COVID-19. The three earlier initiatives include:

  • the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, which was signed on March 6 and provided emergency funding relief for domestic and global efforts;
  • the Families First Coronavirus Response Act, which was signed on March 18 and provided emergency funding relief for domestic efforts; and
  • the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27 and provided emergency funding relief for domestic and global efforts.

The Paycheck Protection Program and Health Care Enhancement Act includes a number of health provisions to address the domestic outbreak, which are summarized in the table below. This summary does not include other aspects of the domestic response addressed by the Act, such as additional funding provided for the paycheck protection program under the Small Business Administration.

Among the areas addressed is $100 billion for the Public Health and Social Services Emergency Fund at the Department of Health and Human Services (HHS), including $75 billion for additional funding to reimburse hospitals and other health care entities for health care related-expenses or lost revenues attributable to coronavirus (referred to as the CARES Act Provider Relief Fund, which now totals $175 billion overall) and $25 billion for necessary expenses related to COVID-19 testing. The testing funding includes:

  • Not less than $11 billion for states, localities, territories, tribes, tribal organizations, urban Indian health organizations, or health service providers to tribes, of which:
    • Not less than $750 million shall be allocated to tribes and tribal organizations, and
    • Not less than $4.25 billion shall be allocated to States, localities, and territories according to a formula based on the relative number of COVID-19 cases;
  • Not less than $1 billion for the Centers for Disease Control and Prevention (CDC);
  • Not less than $1.8 billion for the National Institutes of Health (NIH);
  • Not less than $1 billion for HHS’ Biomedical Advanced Research and Development Authority (BARDA);
  • $22 million for the Food and Drug Administration (FDA);
  • $600 million for the Health Resources and Services Administration (HRSA);
  • $225 million for rural health clinics; and
  • Up to $1 billion to cover the cost of testing for the uninsured.
Table 1: Division B of the Paycheck Protection Program and Health Care Enhancement Act – Summary of Key Health and Related Provisions
Department Operating
Division/
Office
Key Provisions Fund/
Account
Funding
Available
Period
DIVISION B–ADDITIONAL EMERGENCY APPROPRIATIONS FOR CORONAVIRUS RESPONSE
Title I
DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)

 

Office of the Secretary

 

Reimbursement for Hospitals and Other Eligible Health Care Providers for Coronavirus-Related Expenses or Lost Revenues: For an additional amount for “Public Health and Social Services Emergency Fund” to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, hospitals and other eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus (this pool of funding is known now as the “CARES Act Provider Relief Fund”).

Of the funds provided:

  • These funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
  • Recipients of payments shall submit reports and maintain documentation as the HHS Secretary determines are needed to ensure compliance with conditions that are imposed for such payments.
  • Here “eligible health care providers” means public entities, Medicare or Medicaid enrolled suppliers and providers, and such for-profit entities and not-for-profit entities as the HHS Secretary may specify, within the United States (including territories), that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.
  • The HHS Secretary shall, on a rolling basis, review applications and make payments.
  • That funds shall be available for building or construction of temporary structures, leasing of properties, medical supplies and equipment including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity.
  • Here the term “payment” means a pre-payment, prospective payment, or retrospective payment, as determined appropriate by the HHS Secretary.
  • Payments shall be made in consideration of the most efficient payment systems practicable to provide emergency payment.
  • To be eligible for a payment, an eligible health care provider shall submit to the HHS Secretary an application that includes a statement justifying the need of the provider for the payment and the eligible health care provider shall have a valid tax identification number.
  • Not later than 3 years after final payments are made, the Office of HHS Inspector General shall transmit a final report on audit findings with respect to this program to the Committees on Appropriations of the House of Representatives and the Senate.
  • Not later than 60 days after the date of enactment of this Act, the HHS Secretary shall provide a report to the Committees on Appropriations of the House of Representatives and the Senate on obligation of funds, including obligations to such eligible health care providers summarized by State of the payment receipt. Such reports shall be updated and submitted to such Committees every 60 days until funds are expended.
Public Health and Social Services Emergency Fund

(including transfer of funds)

 

$75,000,000,000 To remain available until expended
Office of the Secretary COVID-19 Testing: For an additional amount for “Public Health and Social Services Emergency Fund” to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to research, develop, validate, manufacture, purchase, administer, and expand capacity for COVID-19 tests to effectively monitor and suppress COVID-19, including tests for both active infection and prior exposure, including molecular, antigen, and serological tests, the manufacturing, procurement and distribution of tests, testing equipment and testing supplies, including personal protective equipment needed for administering tests, the development and validation of rapid, molecular point-of-care tests, and other tests, support for workforce, epidemiology, to scale up academic, commercial, public health, and hospital laboratories, to conduct surveillance and contact tracing, support development of COVID-19 testing plans, and other related activities related to COVID-19 testing.

Of the funds provided:

  • States, Localities, Territories, and Certain Others: Not less than $11,000,000,000 shall be for States, localities, territories, tribes, tribal organizations, urban Indian health organizations, or health service providers to tribes for necessary expenses to develop, purchase, administer, process, and analyze COVID-19 tests, including support for workforce, epidemiology, use by employers or in other settings, scale up of testing by public health, academic, commercial, and hospital laboratories, and community-based testing sites, health care facilities, and other entities engaged in COVID-19 testing, conduct surveillance, trace contacts, and other related activities related to COVID-19 testing.
    • Of this:
      • not less than $2,000,000,000 shall be allocated to States, localities, and territories according to the formula that applied to the Public Health Emergency Preparedness cooperative agreement in fiscal year 2019,
      • not less than $4,250,000,000 shall be allocated to States, localities, and territories according to a formula methodology that is based on relative number of cases of COVID-19, and
      • not less than $750,000,000 shall be allocated in coordination with the Director of the Indian Health Service, to tribes, tribal organizations, urban Indian health organizations, or health service providers to tribes.
    • The HHS Secretary shall submit such formula methodology to the Committees on Appropriations of the House of Representatives and the Senate one day prior to awarding such funds.
    • The HHS Secretary may satisfy these funding thresholds by making awards through other grant or cooperative agreement mechanisms.
    • Not later than 30 days after the date of enactment of this Act, the Governor or designee of each State, locality, territory, tribe, or tribal organization receiving funds pursuant to this Act shall submit to the HHS Secretary its plan for COVID-19 testing, including goals for the remainder of calendar year 2020, to include:
      • (1) the number of tests needed, month-by-month, to include diagnostic, serological, and other tests, as appropriate;
      • (2) month-by-month estimates of laboratory and testing capacity, including related to workforce, equipment and supplies, and available tests; and
      • (3) a description of how the State, locality, territory, tribe, or tribal organization will use its resources for testing, including as it relates to easing any COVID-19 community mitigation policies.
    • Funds shall be allocated within 30 days of the date of enactment of this Act.
  • CDC: Not less than $1,000,000,000 shall be transferred to the “Centers for Disease Control and Prevention — CDC-Wide Activities and Program Support” for surveillance, epidemiology, laboratory capacity expansion, contact tracing, public health data surveillance and analytics infrastructure modernization, disseminating information about testing, and workforce support necessary to expand and improve COVID-19 testing.
  • NIH/NCI: Not less than $306,000,000 shall be transferred to the “National Institutes of Health — National Cancer Institute” to develop, validate, improve, and implement serological testing and associated technologies for the purposes specified under this paragraph in this Act.
  • NIH/NIBIB: Not less than $500,000,000 shall be transferred to the “National Institutes of Health — National Institute of Biomedical Imaging and Bioengineering” to accelerate research, development, and implementation of point of care and other rapid testing related to coronavirus.
  • NIH/Office of the Director: Not less than $1,000,000,000 shall be transferred to the “National Institutes of Health — Office of the Director” to develop, validate, improve, and implement testing and associated technologies; to accelerate research, development, and implementation of point of care and other rapid testing; and for partnerships with governmental and non-governmental entities to research, develop, and implement the activities outlined in this proviso. These funds may be transferred to the accounts of the Institutes and Centers of the NIH for these purposes; this transfer authority is in addition to all other transfer authority available to the NIH.
  • BARDA: Not less than $1,000,000,000 shall be available to the Biomedical Advanced Research and Development Authority for necessary expenses of advanced research, development, manufacturing, production, and purchase of diagnostic, serologic, or other COVID-19 tests or related supplies, and other activities related to COVID-19 testing at the discretion of the Secretary.
  • FDA: $22,000,000 shall be transferred to the “Department of Health and Human Services — Food and Drug Administration–Salaries and Expenses” to support activities associated with diagnostic, serological, antigen, and other tests, and related administrative activities.
  • Funds may be used for:
    • grants for the rent, lease, purchase, acquisition, construction, alteration, renovation, or equipping of non-federally owned facilities to improve preparedness and response capability at the State and local level for diagnostic, serologic, or other COVID-19 tests, or related supplies.
    • construction, alteration, renovation, or equipping of non-federally owned facilities for the production of diagnostic, serologic, or other COVID-19 tests, or related supplies, where the HHS Secretary determines that such a contract is necessary to secure, or for the production of, sufficient amounts of such tests or related supplies.
    • purchase of medical supplies and equipment, including personal protective equipment and testing supplies to be used for administering tests, increased workforce and trainings, emergency operation centers, and surge capacity for diagnostic, serologic, or other COVID-19 tests, or related supplies.
  • Products purchased with these funds may, at the discretion of the HHS Secretary, be deposited in the Strategic National Stockpile.
  • HRSA: $600,000,000 shall be transferred to “Health Resources and Services Administration–Primary Health Care” for grants under the Health Centers program and for grants to federally qualified health centers.
    • Certain requirements regarding consideration of applications providing care to those medically underserved in rural vs. urban areas and distribution of grants under the Public Health Service Act shall not apply to these funds.
  • Rural Health Clinics: $225,000,000 shall be used to provide additional funding for COVID-19 testing and related expenses, through grants or other mechanisms, to rural health clinics as defined in section 1861(aa)(2) of the Social Security Act, with such funds also available to such entities for building or construction of temporary structures, leasing of properties, and retrofitting facilities as necessary to support COVID-19 testing.
    • Such funds shall be distributed using the procedures developed for the CARES Act Provider Relief Fund; may be distributed using contracts or agreements established for such program; and shall be subject to the process requirements applicable to such program.
    • The HHS Secretary may specify a minimum amount for each eligible entity accepting such assistance.
  • Up to $1,000,000,000 may be used to cover the cost of testing for the uninsured, using the definitions applicable to funds provided under this heading in Public Law 116-127.
  • Not later than 21 days after the date of enactment of this Act, the HHS Secretary, in coordination with other appropriate departments and agencies, shall issue a report on COVID-19 testing. Such report shall:
    • include data on demographic characteristics, including, in a de-identified and disaggregated manner, race, ethnicity, age, sex, geographic region and other relevant factors of individuals tested for or diagnosed with COVID-19, to the extent such information is available.
    • include information on the number and rates of cases, hospitalizations, and deaths as a result of COVID-19.
    • be submitted to the Committees on Appropriations of the House and Senate, and the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate, and updated and resubmitted to such Committees, as necessary, every 30 days until the end of the COVID-19 public health emergency first declared by the HHS Secretary on January 31, 2020.
  • Not later than 180 days after the date of enactment of this Act, the HHS Secretary shall issue a report on the number of positive diagnoses, hospitalizations, and deaths as a result of COVID-19, disaggregated nationally by race, ethnicity, age, sex, geographic region, and other relevant factors. Such report shall include epidemiological analysis of such data.
  • Not later than 30 days after the date of the enactment of this Act, the HHS Secretary, in coordination with other departments and agencies, as appropriate, shall report to the Committees on Appropriations of the House and Senate, the Committee on Energy and Commerce of the House of Representatives, and the Committee on Health, Education, Labor, and Pensions of the Senate on a COVID-19 strategic testing plan. Such plan shall:
    • assist States, localities, territories, tribes, tribal organizations, and urban Indian health organizations, in understanding COVID-19 testing for both active infection and prior exposure, including hospital-based testing, high-complexity laboratory testing, point-of-care testing, mobile-testing units, testing for employers and other settings, and other tests as necessary.
    • include estimates of testing production that account for new and emerging technologies, as well as guidelines for testing.
    • address how the HHS Secretary will increase domestic testing capacity, including testing supplies; and address disparities in all communities.
    • outline Federal resources that are available to support the testing plans of each State, locality, territory, tribe, tribal organization, and urban Indian health organization.
    • be updated every 90 days until funds are expended.
Public Health and Social Services Emergency Fund

(including transfer of funds)

 

$25,000,000,000 To remain available until expended
General Provisions (including transfer of funds) Section 101. Applies certain requirements, authorities, and conditions described in Division B of the CARES Act (specifically, sections 18108 (allows the HHS Secretary to appoint candidates needed for positions to perform critical work relating to coronavirus), 18109 (allows these funds to be used to enter into contracts with individuals for the personal services to prevent, prepare for, and respond to coronavirus, within the U.S. and abroad), and 18112 (requires the HHS Secretary to provide a detailed spend plan to certain committees not later than 30 days after enactment)) to these HHS funds.
Section 102. Funds, except for the $75 billion provided for hospitals and other eligible health care providers’ reimbursement and the $11 billion provided for States and certain others for COVID-19 testing, may be transferred to, and merged with, other appropriation accounts under the headings “Centers for Disease Control and Prevention,” “Public Health and Social Services Emergency Fund,” “Food and Drug Administration”, and “National Institutes of Health” to prevent, prepare for, and respond to coronavirus following consultation with the Office of Management and Budget and provided that the Committees on Appropriations of the House of Representatives and the Senate shall be notified 10 days in advance of any such transfer. Upon a determination that all or part of the funds transferred are not necessary, such amounts may be transferred back.
Section 103. Of the funds provided, up to $6,000,000 shall be transferred to, and merged with, funds made available under the heading “Office of the Secretary, Office of Inspector General” for oversight of activities supported with funds appropriated to HHS to prevent, prepare for, and respond to coronavirus, domestically or internationally. Office of the Secretary/Office of the Inspector General

 

Funds transferred from Public Health and Social Services Emergency Fund within amounts above To remain available until expended
Title III
GENERAL PROVISIONS Section 304. Funds made available in this Act, or transferred pursuant to authorization granted in this Act, may only be used to prevent, prepare for, and respond to coronavirus.
SOURCE: KFF analysis of the Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139).

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