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Key health care provisions of the American Rescue Plan Act

One year ago, President Joe Biden signed the American Rescue Plan Act of 2021 (ARPA) into law, and final rules implementing ARPA were issued in January of 2022. While ARPA is a broad piece of legislation, its key health care provisions evince the desire to tackle two public health challenges.

First, to address the immediate challenges presented by COVID-19, ARPA allocates funding to state, local and territorial governments, as well as to certain health care providers, for needs such as COVID-19 testing and treatment, and financial assistance for entities impacted most severely by the pandemic.

Second, in an effort to strengthen the public health infrastructure and to improve preparedness for handling future public health emergencies, ARPA contains funding for health care providers and public health organizations to grow their workforces, increase vaccine distribution capability, and otherwise improve their ability to deliver health care in times of crisis.

In addition to ARPA’s primary goals, the law directs funding toward specific health concerns, such as mental health issues and substance abuse, and makes technical changes to Medicare and Medicaid, while offering new, temporary incentives for Medicaid expansion under the Affordable Care Act.

Some of ARPA’s key provisions affecting providers and purchasers of health care are described below.

Rural health care

ARPA contains $8.5 billion in funding specifically for rural health care providers intended to reimburse expenses and lost profits attributable to COVID-19. The payments may not be used to reimburse expenses that are reimbursed by another source. Rural health care providers who receive funding to make up for lost profits attributable to COVID-19 may calculate their lost profits by comparing actual patient care revenue to budgeted patient care revenue.

Entities eligible to apply for reimbursement include providers and suppliers in rural areas, providers and suppliers in non-rural areas who serve rural patients, rural health clinics, and providers and suppliers that furnish home health, hospice or long-term care services in the residences of individuals who are located in rural areas.

As additional aid for rural health care providers, ARPA creates a $500 million grant program for rural health care providers that can be used for various purposes, including increasing capacity for vaccine distribution, increasing telehealth capabilities, increasing staffing for vaccine administration or testing, and providing medical supplies to increase surge capacity.

Skilled nursing facilities

The law also includes $450 million in funding to assist states and territories in deploying strike teams to skilled nursing facilities to respond to COVID-19 outbreaks.

To assist the vulnerable populations that reside in skilled nursing facilities with preparedness for responding to COVID-19 and future public health emergencies, $200 million of the total funding is specifically allocated for the development of COVID-19 prevention protocols.

Infrastructure

Consistent with the dual goals of ARPA, the funding may also be used to build out the health care infrastructure of federally qualified health centers and other community health organizations, including by expanding and sustaining the health care workforce and by diversifying and enhancing the services provided.

To combat the medical staffing shortages that presented challenges in diagnosing and treating COVID-19, ARPA adds $800 million for National Health Service Corps loan repayment and scholarships, $100 million for Medical Reserve Corps, and $330 million for Teaching Health Centers that operate graduate medical residency programs for establishing new training programs and increasing the per-resident amount by $10,000.

Mental health, substance abuse

In response to the increase in self-reported mental health issues and substance abuse during the COVID-19 pandemic, ARPA seeks to build up resources aimed at addressing those issues. The funding increases include $3 billion to be split between the Substance Abuse Prevention and Treatment and Community Mental Health block grant programs, $30 million to support community-based overdose prevention and syringe services, $100 million for behavioral health workforce education, and $80 million for pediatric mental health access.

Expanded coverage

To boost the percentage of Americans with health insurance generally, APRA expands the availability of advanced premium tax credits (APTCs) through 2022.

Prior to ARPA, APTCs were only available to individuals who obtained insurance through insurance exchange marketplaces and whose income fell between 100% and 400% of the federal poverty line.

ARPA makes APTCs available to individuals with income greater than 400% of the federal poverty line based on a sliding scale. For instance, individuals with income greater than 400% of the federal poverty line will have premiums capped at 8.5% of income.

Barry F. Rosen is the chairman & CEO of the law firm of Gordon Feinblatt LLC, heads the firm’s health care practice group, and can be reached at 410-576-4224 or brosen@gfrlaw.com.