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Healthcare Provisions of the American Rescue Plan

On March 11, 2021, President Joe Biden signed into law H.R. 1319, the American Rescue Plan Act of 2021 (the “ARP”). In addition to the widely reported additional stimulus paychecks, the ARP includes many provisions related to the healthcare industry and marketplace that seek to improve access and affordability. The major provisions of the ARP that affect the healthcare sector are summarized below:

  • ACA subsidies for health insurance purchased in the Marketplace increased and extended:
    • Increased: Americans earning between 100-150% of the federal poverty level (“FPL”) will be eligible for no-premium coverage for 2021 and 2022. For those earning between 150-400% of the FPL premiums will be based on a sliding scale with a cap of 8.5% of income.
    • Extended: The ARP eliminates the upper income limit on premium tax credits (“PTCs”) for two years, allowing all middle- and upper-income individuals who purchase their own coverage to access PTCs if their premiums exceed 8.5% of their overall household income. Example: A typical 60-year-old earning $60,000 who pays $960 per month in premiums for benchmark coverage, or 19% of income, now will only be required to pay $425 per month, or 8.5% of income, for 2021 and 2022.
    • Unemployment Subsidies: For Americans who received (or were approved to receive) unemployment benefits during 2021, their income will be considered to be lower than 133% of the FPL allowing them to receive maximum subsidies, including no-premium coverage. This unemployment provision applies only to Americans who do not have an offer of affordable employer-based coverage; individuals who receive unemployment will still be barred from accessing ACA subsidies if someone in their household has an offer of affordable employer-based coverage.
    • Repaying Subsidies: The ARP temporarily waives the requirement for taxpayers to pay back to the Internal Revenue Service (“IRS”) excess advance PTCs for the 2020 tax year. This will prevent unexpected financial burdens for consumers who underestimated their income in 2020
  • COBRA Subsidies:
    • The ARP will subsidize 100% of the cost of premiums for COBRA continuation coverage for workers who are laid off or have reduced hours between the period of April 1, 2021 through September 30, 2021.
  • Medicaid and Children’s Health Insurance Program (“CHIP”) expansion:
    • The ARP encourages those states that have not already expanded Medicaid coverage to do so by increasing by 5% the percentage the federal government pays toward the state’s Medicaid expenditures (called the “federal medical assistance percentage” or FMAP) for all eligibility groups other than those eligible through expansion. This expansion will last for two years after a state expands. States would still receive the normal 90% enhanced FMAP for the expansion group. If the remaining 14 states implemented an expansion as a result of the ARP, nearly 4 million uninsured low-income adults, including about 640,000 essential or front-line workers, could gain coverage.
    • The ARP requires Medicaid programs and CHIP to provide coverage, without cost sharing, for treatment or prevention of COVID-19 for one year after the end of the public health emergency (“PHE”). The FMAP will also be increased to 100% for payments to states for administering vaccines for the same period. The requirement for states to provide treatment and prevention to uninsured individuals is extended to one year after the PHE is over if the state chooses to implement an option under Medicaid to provide COVID-19 testing for those individuals.
    • The ARP gives states the option to extend health coverage for women enrolled in Medicaid or CHIP for up to 12 months after the birth of a child for the next five years (an expansion from the current 6-month coverage).
    • The ARP increases the FMAP for state home and community-based services by 10% for state HCBS expenditures from April 1, 2021, through March 30, 2022.
  • COVID-19 Testing and Vaccination Support Increased:
    • The ARP includes over $75 billion for testing and vaccine efforts, contact tracing, and mitigation activities. This allocation also includes funding for advanced vaccine research and development, and increased manufacturing, production, and purchase.
  • Focus on Mental Health Services:
    • The ARP provides over $3 billion to state block grants for community mental health services and substance abuse prevention, as well as $420 million to community behavioral health clinics with an additional $200 million for various mental and behavioral health-related programs. The ARP also increases FMAP payments to state Medicaid programs offering community-based mobile crisis intervention services by an amount equal to 85% of these services’ costs for a three-year period beginning one year after enactment.
  • Supporting existing public healthcare programs:
    • $8.5 billion to the Provider Relief Fund for rural providers;
    • $14.5 billion for care provided by the Department of Veterans Affairs;
    • $7.6 billion for community health centers;
    • $500 million to eligible entities, including public municipalities and counties, nonprofit organizations and tribes in rural areas in the form of rural development grants for rural healthcare; and
    • $5.4 billion to the Indian Health Service.

In addition to the healthcare specific supports offered by the ARP, it also provides additional funds to states, localities, and tribal governments and extends to December 31, 2024, the period during which those funds can be used for public health efforts and to address the pandemic’s impact. The ARP also includes supports for workforce initiatives, Marketplace modernization, agriculture and nutrition programs, schools and colleges, and small business assistance.

It is very possible that the Biden Administration will seek to make some of the temporary changes under the ARP permanent. Check back on the BMD Resources page for updates on this and other timely legal topics. For any questions of the ARP’s coverage please contact Healthcare & Hospital Law Attorney Ashley Watson at abwatson@bmdllc.com.

New York, Kansas, Massachusetts, and Delaware Become the latest States to Adopt Full Practice Authority for Nurse Practitioners

While the COVID-19 pandemic certainly created many obstacles and hardships, it also created many opportunities to try doing things differently. This can be seen in the instant rise of remote work opportunities, telehealth visits, and virtual meetings. Many States took the challenges of the pandemic and turned them into an opportunity to adjust the regulations governing licensed professionals, including for advanced practice registered nurses (APRNs).

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.