Federal Consolidated Appropriations Bill Provides COVID Relief, Other Changes

January 6, 2021

On December 21, the U.S. House of Representatives and Senate passed the 5,600-page Consolidated Appropriations Act, 2021, which was later signed by the president. The package includes more than $900 billion in COVID-19 relief as well as $1.4 trillion to fund the federal government through the end of 2021.

Besides COVID-19 relief provisions, the bill includes other legislation, such as surprise billing that have been in the works for quite some time. Overall, we are pleased with the final version of this bill and it reflects many of WSHA’s federal priorities as well as the hard work by the American Hospital Association and WSHA over the past three weeks. The Act also includes some provisions that are of concern for hospitals. WSHA’s summary of the appropriations bill is here. Major provisions of the Act of interest to hospitals include:

  • Provider Relief Fund (PRF). Includes $3 billion in new funds for the PRF. It also includes helpful changes to the PRF reporting requirements. Specifically, as requested by the AHA, WSHA and others, it would allow hospitals and providers greater flexibility in how to calculate lost revenue and permit the movement of targeted PRF distributions within their system.
  • Coronavirus Relief Fund. The legislation extends the availability of funds provided to states and localities by the Coronavirus Relief Fund through December 2021.
  • Includes about $30 billion to assist with purchasing and administering COVID-19 vaccines, including $4.5 billion to be paid directly to states for vaccine planning and distribution. WSHA will be seeking information on how the funding will be used in our state.
  • COVID-19 Testing and Tracing. The legislation includes $22 billion that will be sent directly to states for testing, contact tracing and COVID mitigation programs.
  • Delay to Medicaid DSH Cuts. Eliminates the Medicaid disproportionate share hospital (DSH) cuts that were scheduled to go into effect in fiscal year (FY) 2021 and cuts scheduled for FY 2022 and 2023. Steeper, additional cuts are added in FY 2026 and 2027 to compensate for the delay.
  • Delay to Medicare Sequester Cuts. Eliminates the Medicare sequester cuts through March 31, 2021. The two percent cut to all Medicare payments was scheduled to resume on January 1, 2021. Rep. Schrier led an effort in the House to delay the reimplementation of these cuts.
  • Surprise Medical Billing. Protects patients from receiving surprise medical bills arising from emergency services provided by out-of-network providers, including air ambulance, and ancillary services provided by out-of-network providers in in-network facilities. The provision takes effect January 1, 2022. Much like our Washington state law, an independent dispute resolution process will be utilized to resolve payment disputes between providers and health plans rather than a default reimbursement amount. WSHA will be working with the Office of the Insurance Commissioner to determine how the new federal law will interact with our state’s Balance Billing Protection Act (BBPA). While the federal law is conceptually similar to the BBPA, there are important differences in the scope and many of the details and requirements.
  • Requires that for certain scheduled services, health plans must provide patients with an “advanced explanation of benefits” based on a “good faith estimate” prepared by the provider. The Advanced EOB must include whether the provider is in-network, the “good faith estimate,” an estimate of the amount the patient has incurred toward their cost-sharing limits, prior authorization and other requirements and a disclaimer that this is just an estimate. The law also requires hospitals and providers to provide detailed estimates in advance of scheduled services. WSHA is seeking clarity regarding under what circumstances the estimates needs to be provided in order to avoid unnecessary administrative burden and delays to care.
  • Rural Emergency Hospital (REH) Designation. Establishes a new REH Medicare designation that allows rural hospitals to provide 24/7 emergency services along with other outpatient services, while ceasing inpatient services. REHs will receive a fixed monthly payment plus a 5% add-on to the Medicare outpatient prospective payment system rates for outpatient services. The fixed monthly payment will be 1/12th of the average annual payment CAHs received in excess of the PPS for all services. The fixed amount will be adjusted each year by the hospital market basket update.
  • Rural Health Clinic Payment Changes. The legislation phases in an increase in the RHC statutory cap over an eight-year period to $100 starting on April 1, 2021, to $190 in 2028. New RHCs, including those operated by critical access hospitals, will be subject to the new rate structure. Existing hospital RHCs with encounter rates that are not subject to the statutory cap will retain their encounter rates but increases going forward will be limited to the Medicare Economic Index. We have concerns about effect on hospitals’ ability to open new RHCs to meet community needs, and about a discrepancy on the grandfathering dates for existing hospital RHCs. WSHA plans to work with AHA to advocate for technical fix legislation to address the issue.
  • The legislation permanently waives the geographic and originating site requirements for mental health services delivered via telehealth.
  • Child Care. Provides $10 billion for the Child Care and Developmental Block Grant (CCDGB) program with the intent of both helping the childcare providers remain open, as well as providing care for dependents of essential workers. (Andrew Busz, AndrewB@wsha.org)


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