Key provisions for physicians in the newly proposed HEROES Act

Work is currently underway to develop the next round of federal COVID-19 legislation. Earlier this week, the United States House of Representatives introduced H.R. 6800, the ‘‘Health and Economic Recovery Omnibus Emergency Solutions Act’’ (HEROES Act). This $3 trillion package includes significant funding and policies which would cover many sectors of the economy and society overall. To be clear, this bill only marks the start of the process. It was developed by House Democrats and negotiations with Senate Republicans and the White House are just beginning to proceed.

Even though the HEROES Act currently only marks the starting point for negotiations between the House, Senate and White House, it is important to take note of a number of funding an policy provisions that would impact the healthcare system, patients, and physicians. Notably, the bill includes a handful of funding and policy recommendations that the AOA requested in a letter to Congressional leaders in April. These policy requests were also outlined in joint letters from the AOA and osteopathic affiliates, and by Congressional grassroots advocates to their members of Congress. Brief descriptions of these and several other noteworthy provisions in the HEROES Act are highlighted below:

Small Business Administration Paycheck Protection Program

The HEROES Act would expand eligibility for the Paycheck Protection Program (PPP) to include all 501(c) nonprofit organizations. This change, if included in legislation enacted into law, clears up any ambiguity about 501(c)(6) eligibility for PPP loans. The coverage period for borrowers would also be extended from the current eight-week period to 24 weeks and extends the covered period from June 30 to Dec. 31. The legislation would also eliminate the 75/25% rule on the use of loan proceeds, makes clear that employers are allowed to use both the Employee Retention Tax Credit and PPP loans, and ensures that the principal and interest loan assistance is not treated as taxable income to borrowers.

HHS Provider Relief Funding

The HEROES Act would provide an additional $175 billion to the Public Health and Social Service Emergency Fund. $100 billion is dedicated to hospitals and healthcare providers to cover healthcare expenses and lost revenue, and $75 billion would be for testing, contract tracing, and other disease mitigation efforts.

HHS Provider Relief Fund Policy Changes

The HEROES Act directs the Health Resources and Services Administration (HRSA) to establish a program to reimburse eligible providers for eligible expenses and/or lost revenue during the 2020 calendar year. Applicants would be required to apply for funding on a quarterly basis. Eligible expenses would be paid at 100% and lost revenue at 60%, and funds provided through this program would be forgiven.

If program funding is insufficient, eligible expenses will be calculated to be reimbursed first for all applicants before payment would be made to cover lose revenue. Should the remaining funds not be sufficient to reimburse the lost revenue for all applicants, the lost revenue percentage will be reduced as needed to cover all applicants.

There is one important condition for physicians to be aware of. Any provider who receives a grant through this program would be prohibited from balance billing during the emergency period (whether in or out of network).

Medicare Advance and Accelerated Payments

As currently written, the bill aligns with the AOA’s policy recommendations submitted to Congressional leaders. The HEROES Act would provide entities receiving payments through this program up to one year before claims are set to recoup payment. After this one-year period, the offset would not exceed 25% of the claims amount and allow up to two years from the date of payment before repayment in full is required. The accruing interest rate would be set at 1%.

Public Health Workforce Loan Repayment Program

The HEROES Act would establish a student loan repayment program to enhance recruitment and retention of health professionals working in state, local, tribal, and territorial public health departments. For each year of service that an individual contracts to serve, HHS may pay up to $35,000 toward eligible loans. For individuals whose total eligible loans are less than $105,000, HHS would pay an amount that does not exceed 1⁄3 of the eligible loan balance for each year of such service of such individual.

There are several other provisions in the HEROES Act that, while not included in recent AOA advocacy efforts, would impact the osteopathic community should they be enacted into law.

Grants for Schools of Medicine in Diverse and Underserved Areas

The HEROES Act would authorize grants for both allopathic and osteopathic schools of medicine, or a branch campus of an allopathic or osteopathic school of medicine, in a combined statistical area with fewer than 200 actively practicing physicians per 100,000 residents, have a curriculum that emphasizes care for diverse and underserved populations; or are minority-serving institutions. Funding could be used to build new schools of medicine and expand, enhance, modernize and support existing schools of medicine.

Medicare Advantage and Medicare Part D Plans

Medicare Advantage plans would be prohibited from imposing any cost-sharing requirements for deductibles, copays and coinsurance, prior authorization or utilization management for critical treatment including ventilators and intensive care unit services under the HEROES Act. The bill also requires Medicare Part D plans and plan sponsors to include medically indicated FDA approved drugs to treat COVID-19 in their drug formularies, eliminate cost-sharing requirements, and not impose prior authorization or utilization management tools.

Increase in Medicaid Funding

The HEROES Act would increase the Federal Matching Assistance Percentage (FMAP) by 14 percentage points through June 30, 2021. The legislation also increases the FMAP by 10 percentage points for state Medicaid services for patients in home and community-based care.

Health Insurance Coverage

The HEROES Act would fully subsidize the cost of COBRA and furloughed workers’ insurance premiums to allow them to maintain their employer-sponsored coverage if they lose employment, have their hours reduced, or are furloughed as a result of the pandemic. The bill also would also establish special enrollment periods for Medicare and for the Affordable Care Act marketplaces.