COVID-19 Updates from Washington, D.C.
April 23, 2020
Congress Poised to Pass Fourth COVID-19 Relief Bill
At press time, the House of Representatives was in the process of voting on a roughly $480 billion COVID-19 relief package. The bill, entitled the Paycheck Protection Program and Healthcare Enhancement Act (HR 266), was approved by the Senate on Tuesday. President Trump has signaled his intent to sign the legislation into law as soon as the House clears the measure.
HR 266 represents the fourth major COVID-19 relief effort to move through Congress since the outbreak of the coronavirus in the United States earlier this year. All told, the series of bills provide over $2.5 trillion in direct federal support for both private and public sector entities.
HR 266 includes the following key components:
- $321.3 billion in funding for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), $60 billion of which is set aside for small lenders and community financial institutions;
- $60 billion for SBA disaster loan programs;
- $75 billion for reimbursement to hospitals and health care providers; and,
- $25 billion to expand coronavirus testing capacity.
With regard to the $75 billion for health care providers, funds are available to hospitals and other entities to support COVID-19 responses and lost revenue associated with the pandemic. Eligible providers include public entities, Medicaid providers, and not-for profit entities specified by the Department of Health and Human Services (HHS). Under the bill, funds can be used for a variety of activities, including the construction of temporary structures, leasing properties, purchasing medical supplies and equipment, and building surge capacity. To receive funding, entities will need to apply to HHS.
Of the $25 billion appropriated for testing and related activities, $11 billion will be allocated to states, localities, and tribes to pay for necessary expenses related to COVID-19 testing, including support for the necessary workforce to administer the tests. The funds also may be used to scale up testing by public health, academic, commercial, and hospital laboratories, as well as community-based testing sites, health care facilities, and other entities.
Within the $11 billion, not less than $2 billion is set aside for state and local public health departments and territories according to the 2019 Public Health Emergency Preparedness formula, which was used in distributing public health funding in two previous COVID response bills. Furthermore, not less than $4.25 billion will be allocated to states and localities based on a formula to be created by HHS that must account for the relative number of COVID-19 cases.
Finally, Community Health Centers and rural health clinics will receive $600 million and $225 million, respectively, for testing and related expenses, with an additional $1 billion authorized to cover the costs of testing uninsured individuals.
Looking ahead, key members of Congress, as well as President Trump, have already begun laying out priorities for yet another round of federal coronavirus relief. Notably, the president, Democratic congressional leaders, and many rank-and-file members are all on record acknowledging the need for more state and local fiscal stabilization funding.
In addition, funding for infrastructure is likely to be a central theme as part of any future COVID-19 relief discussions. Members of Congress are also looking to provide increased funding for election assistance, housing supports, and a variety of other programs.
HHS Distributing Second Round of CARES Act Health Provider Funds
This week, HHS announced it was initiating a second round of CARES Act funding totaling $20 billion targeted to hospitals and other health providers that serve persons covered by Medicaid. Another $10 billion is to be distributed to hospitals that are heavily impacted by COVID-19, with a focus on providers that serve a significantly disproportionate number of low-income patients. Rural health clinics and hospitals are eligible for a separate allocation totaling $10 billion, with funds to be distributed as early as next week on the basis of operating expenses, using a methodology that distributes payments proportionately to each facility and clinic.
Treasury Releases Guidance on Coronavirus Relief Fund
Yesterday, the U.S. Department of the Treasury released guidance on the Coronavirus Relief Fund (CRF). Created by the CARES Act, the CRF provides $150 billion in fiscal stabilization funding to states, territories, local governments, and Indian tribes. The guidance provides a list of the types of expenditures for which funds can be used, as well as examples of ineligible expenditures.
Pursuit to the terms of the CARES Act, payments from the CRF may only be used to cover costs that are: necessary expenditures incurred due to the public health emergency with respect COVID-19); not accounted for in the budget most recently approved as of March 27, 2020; and, were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.
Notably, the CRF guidance specifies that dollars may be used to cover costs associated with providing paid sick and paid family and medical leave to public employees to enable compliance with COVID-19 public health precautions.
NACo Releases COVID-19 Economic Impact Report
This week, the National Association of Counties (NACo) released a report entitled Running on Fumes: Impact of COVID-19 on County Finances. According to the report, counties nationwide could see a $144 billion hit to their budgets through the end of 2021 due to the coronavirus epidemic.
NACo’s estimate includes anticipated increases in expenditures, lost sales tax revenue, lost revenue from charges and fees, lost business license tax revenue, and lost income tax revenue. The estimate does not include potential lost revenue from property taxes or from state sales or income taxes that are shared with counties. The full report can be found here.