On April 24, President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266). The bill’s enactment comes one day after the legislation passed the U.S. House of Representatives by a vote of 388-5.
On April 21, the U.S. Senate passed the Paycheck Protection Program and Health Care Enhancement Act, also known as the “COVID-19 3.5” relief package. The $484 billion package, which was originally designed to only be a $250 billion stopgap measure, is the second largest of the four coronavirus response bills Congress has passed so far.
The package includes additional funding to support small businesses, hospitals and enhance COVID-19 testing.
- New funding for small businesses. $320 billion to replenish the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), a loan initiative aimed at helping small businesses weather the economic fallout from the COVID-19 response. Lawmakers had allocated $349 billion to PPP as part of the $2 trillion CARES Act, but the program ran out of money less than 3 weeks after it was authorized. Of this amount, $60 billion would be set aside for smaller lending institutions such as credit unions and other community-based real financial institutions, with the goal of reaching underbanked businesses.The package would also appropriate an additional $50 billion for SBA’s Disaster Loans Program Account and $10 billion for Emergency Economic Injury Disaster grants, while increasing the authorization level for the emergency economic grants from $10 billion to $20 billion. SBA would also receive more than $2 billion to cover salaries and expenses for federal employees.
- More support for hospitals and healthcare providers. The interim relief package would provide an additional $75 billion to support local hospitals and health care providers by providing reimbursements for COVID-19 related expenses, lost revenue and public health services for uninsured Americans who have been infected by COVID-19. This new wave of funding is in addition to the $100 billion allocated under the CARES Act and will be distributed under the Public Health and Social Services Emergency Fund,The U.S. Department of Health and Human Services (HHS) is in the process of developing formulas for additional targeted distributions to health care entities hit hard by the COVID-19 outbreak, namely rural providers, and important for counties – providers who predominately serve the Medicaid population.
- New funding for target COVID-19 testing in rural areas and for the uninsured. The interim package would provide $25 billion for “necessary expenses to research, develop, validate, manufacture, purchase, administer and expand capacity for COVID–19 tests” to help effectively monitor and suppress the COVID-19 pandemic. Of the total amount allocated, the package would provide:
- $11 billion in direct funding for states, localities and territories to scale up the administration’s COVID-19 testing, laboratory capacity, contact tracing and support employer testing
- $225 million in direct funds to rural health clinics through grants and other mechanisms
- Up to $1 billion to cover the cost of testing for the uninsured
Under this provision, the legislation also directs that these funds be allocated within 30 days of the bill’s enactment, and that $2 billion of the $11 billion for state and local funding be distributed using the Public Health Emergency Preparedness (PHEP) Fiscal Year (FY) 2019 grant formula under the Centers for Disease Control and Prevention (CDC). Of the remaining funds, $4.25 billion would be distributed using a formula based on COVID-19 cases and $750 million would be provided directly to tribes and tribal organizations.
Funding for increased testing capacity is critical during this time, and is especially pertinent for rural counties, as hospital systems in these areas have experienced increased financial strain due to loss revenue streams from non-COVID-19 related care.
- Mandates states and localities to report how resources will be used for testing and COVID-19 community mitigation policies. Alongside increased funding for testing, the legislation would also require that state and localities that receive funds provide a plan for COVID-19 testing to the HHS Secretary no later than 30 days following the bill’s enactment. Specifically, the plan must outline how states and localities will utilize these funds for the remainder of the 2020 calendar year related to – the number of tests needed on a monthly basis; a monthly estimate of laboratory and testing capacity including related workforce, equipment and supplies, and available tests; and a description of how you will use resources for testing and community mitigation efforts.
The interim relief package did not include another round of much-needed aid to state and local governments or funding to offset the drastic state and local revenue shortfalls that state and local governments are experiencing across the country.