Overview of Year-End Congressional Package

Overview of Year-End Congressional Package

This article is a high level overview on the combination omnibus-coronavirus relief package that was passed by Congress on December 21, 2020. The approximately 5500 page bill, The Consolidated Appropriations Act, 2021 (Omnibus and Coronavirus Relief Bill) directly or indirectly impacts most every part of the aging services continuum. This package provides another, long-awaited round of coronavirus relief, funds the government through September 30, 2021, and includes a number of other priorities for aging services providers. There will be several more articles on the package forthcoming.

There are two key items not included in the final agreement related to coronavirus relief that ultimately proved too controversial to obtain consensus. There is no general funding for state, local and tribal governments, although there are funds that governments can use for specific purposes. Also, Congress was not able to come to agreement on liability protections for businesses, including health care providers.

Once this package passes, the 116th Congress will have concluded its business. We are formulating our advocacy agenda for 2021, which will include continued advocacy for additional financial relief, and policy priorities including telehealth, housing, and other issues not fully addressed in this bill. This bill is only a down payment on extensive relief that is still needed by our members.

Paycheck Protection Program

The bill provides about $300 billion for the Paycheck Protection Program. The period for applying for loans would extend to March 31, 2021. Loans would be limited to $2 million for most borrowers, down from $10 million from the CARES Act. Organizations who received a PPP loan during the first iteration would be able to apply for a second draw loan if certain conditions are met.

Business expenses allowable under the PPP loans would be expanded to include items like PPE, operational expenses and other costs, and a 60% payroll rule would continue. And the bill would put into statute a provision allowing business expenses paid for with PPP dollars to be treated the same as other business expenses for tax purposes.

The bill contains loan forgiveness simplification for borrowers with loans below $2 million and outlines the audit process for loans above $2 million and it opens the loans to 501(c)(6) organizations. Please look for a more detailed article on the changes to the PPP program in the coming days.

Vaccines, Testing, and CARES Act Extension

The bill contains money to support vaccine distribution and administration, understanding that it is critically important that all levels of government be supported in their efforts to distribute and administer vaccines and therapeutics. A total of $8.75 billion is allocated to the Centers for Disease Control and Prevention for vaccine distribution and administration. $4.5 billion is for states, local, territorial, and tribal public health departments and 300 million is for a targeted effort to distribute and administer vaccines in high risk and underserved populations. $19.7 billion dollars was allocated for the manufacturing and procurement of vaccines and therapeutics and the ancillary supplies necessary for vaccine and therapeutic administration.

In line with LeadingAge and the VNAA’s asks for Congress, there is more money in the package that can be used for testing and other aspects of an effective COVID-19 response. $22.4 billion dollars is allocated for testing, contact tracing, surveillance, containment and mitigation. This money will be distributed to States, localities, territories, and tribal organizations but is flexible in the range of permitted activities. Some examples that LeadingAge and the VNAA members might want to suggest to their states are testing, support for workforce, and other mitigation activities.

The bill also allows states a one year extension, until December 31, 2021, to expend their CARES Act funds.

Provider Relief

The Provider Relief Fund (PRF) section of the Consolidated Appropriations Act, 2021 includes a small amount of additional PRF funding plus some key policy changes to the program. It would appropriate an additional $3 billion to the PRF and allow certain providers to calculate their lost revenues using a budgeted to actual revenue comparison instead of the actual year-over-year comparison currently required by HHS. It also allows parent organizations to reallocate all PRF among their subsidiaries, including targeted distributions like those that went to nursing homes. Finally, it directs HHS to use 85% of new and remaining PRF dollars to cover providers reported financial losses and changes in operating expenses through first quarter of 2021. A more detailed breakdown of the changes to the Provider Relief Fund can be found here.

Affordable Housing Provisions

The COVID-19 relief package includes important housing-related provisions requested by LeadingAge. The package includes $25 billion in Coronavirus Relief Fund Payments for Rental Assistance and extends the nation eviction moratorium for nonpayment of rent, set to expire on December 31, 2020, until January 31, 2021. The bill also includes a minimum 4% Low Income Housing Tax Credit floor for buildings placed in service after January 20, 2020. A separate article on HUD appropriations can be found here.

Paid Sick and Family Leave

The Families First Coronavirus Response Act (FFCRA) established a temporary paid sick leave and paid family leave program that was set to expire on December 31, 2020. Alongside these programs, FFCRA established refundable payroll tax credits for paid sick and family leave. These tax credits are extended through the end of March 2021. It appears the tax credits are modified so that they apply as if the corresponding employer mandates were extended through the end of March 2021 which leads us to believe that the program is expanded through March, but we will provide an update as we analyze further.

Medicare Payment Changes

The bill contains two key payment increases for Medicare providers. The sequester moratorium, which went into effect in May, will be extended for another three months until March 31, 2021. LeadingAge was part of a large coalition of organizations that worked to keep the moratorium in place. Additionally, in recognition of the hardships of COVID-19 and the substantial cuts that some providers saw as a result of the Medicare Physician Fee Schedule, there will be a one-time, one-year 3.75% payment bump to the entire Medicare Physician Fee Schedule. LeadingAge signed onto a letter supporting policies that would reverse the cuts from the Medicare Physician Fee Schedule and are pleased to see this partial fix. 

Health Extenders

Congress included in this bill a number of ongoing Medicare and Medicaid provisions that needed to be extended such as the Money Follows the Person (MFP) program and the spousal impoverishment protections. The MFP program is extended until 2023 with $450 million dollars per year in funding and a number of improvements including a shortened institutional residency requirement. The spousal impoverishment protections are also extended to 2023.

The “extenders” portion of the bill also contained a number of other priorities related to the Medicare and Medicaid programs. One key example is include allowing occupational therapists to conduct the initial assessment and complete the comprehensive assessment for home health agencies with respect to certain rehabilitation services. More information about the extenders can be found here with a specific article on the changes in the bill for hospice providers.

Other areas of importance

  • Child care: The bill appropriates $10 billion for a new Child Care Stabilization Fund grant program at the Department of Health and Human Services to provide grants for child care providers that will assist families of essential workers (such as health care sector employees) and other workers determined to be essential during the response to COVID-19 by public officials. The grants would be available to child care providers that are currently open or temporarily closed due to COVID-19 and can be used for a variety of purposes.
  • Nutrition:The bill extends waivers providing flexibility in Older Americans Act nutrition services to provide needed flexibility to state units on aging to ensure that older adults’ nutritional needs can continue to be met safely during the pandemic. The Administration for Community Living was allocated $952 million for senior nutrition programs, an increase of $15 million above the 2020 enacted level.
  • Federal Communications Commission (FCC) COVID-19 Telehealth Program: The legislation allocates an additional $250 million to the FCC for its COVID-19 Telehealth Program authorized under the CARES Act. It also puts in place new transparency obligations for the program surrounding the FCC’s review of applications, and directs the Commission to ensure, to the extent feasible, that all states benefit from the program. We will continue to work on an extension for all the telehealth waivers that have supported our members during the public health emergency. 
  • Elder Justice: $100 million dollars is allocated to the Administration for Community Living (ACL) address abuse, neglect, and exploitation of the elderly, including adult protective service and long-term care ombudsman activities. This aligns with work LeadingAge has been doing on the reauthorization of the Elder Justice Act and we looked forward to continue work on this in the new Congress.
  • Reduction in medical expense deduction floorBetween 2013 and 2017, individuals under 65 years old could claim an itemized deduction for unreimbursed medical expenses to the extent that such expenses exceeded 10% of annual gross income (AGI), while for individuals 65 or older, the threshold was 7.5% of AGI. Prior to this period, the 7.5% threshold generally applied regardless of age. The bill will make permanent the lower threshold of 7.5% for all taxpayers.

You can read more about the workforce, nutrition, and telehealth provisions of the package here.

 

Questions?

Contact:

David Carter | Director, Health Care Finance & Policy

C 360.888.5702

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