House-passed HEROES Act promises relief for physicians

June 25, 2020

"The HEROES Act makes key improvements to the Medicare Accelerated and Advance Payment Programs," writes Yehuda A. Sugarman of the AACU.

Based on a partnership with Urology Times, articles from the American Association of Clinical Urologists (AACU) provide updates on legislative processes and issues affecting urologists. We welcome your comments and suggestions. Contact the AACU government affairs office at 847-517-1050 or info@aacuweb.org for more information.

The US House and Senate are far from reaching consensus on a fourth coronavirus relief package, but the passage of the Health and Economic Recovery Omnibus Emergency Solutions Act (HR 6800), or HEROES Act, in the US House of Representatives on May 15, 2020, may provide some clues as to what physicians can expect, or perhaps hope for, in a final package. The $3 trillion supplemental spending package covers many sectors of the economy, including much-needed assistance to state and local governments. Similar to previous relief packages, it also includes considerable investment in the US health care system and coronavirus disease 2019 (COVID-19) response efforts.

$100 billion appropriation for Provider Relief Fund

The provision of the HEROES Act with the most direct impact on health care providers is an appropriation of $100 billion, on top of the $175 billion that has already been appropriated, for the Provider Relief Fund. The fund, initially established under the Coronavirus Aid, Relief, and Economic Security (CARES) Actpassed in April, has provided 2 rounds of payments to hospitals and providers for COVID-19–related expenses and lost revenue.

In addition, the bill provides new guidance clarifying how funds from the program should be allocated to recipients. Following the first distribution of provider relief funds on April 10, there was considerable confusion and criticism surrounding the formula used to determine how much each provider received. Thus, regulators codified a new algorithm into the HEROES Act that will provide the Department of Health & Human Services with a more equitable and efficient system for distributing relief funds to providers.

Under the new guidance, providers would be required to apply for grants, on a quarterly basis, for all expenses and lost revenue relating to COVID-19 via a new program established at the Health Resources and Services Administration. Eligible expenses would be reimbursed at 100% whereas lost revenue would be reimbursed at 60%, with the latter being dependent on the availability of funds. The program does not require providers to pay back the funds they receive, with the caveat that they may not submit bill balances (surprise billing) to their uninsured patients.

The HEROES Act makes key improvements to the Medicare Accelerated and Advance Payment (AAP) Programs, which have provided necessary liquidity for many Medicare providers and suppliers impacted by the pandemic. According to data released by the Centers for Medicare & Medicaid Services (CMS) in early May, about $19.6 million in loans were allocated for urologists as part of AAP. (The $100 billion in total AAP loans provided by CMS is separate from and in addition to the $100 billion in grants distributed to providers as part of the CARES Act, which do not need to be repaid.)

If HEROES is enacted, the terms of those loans would be considerably more favorable for the entities receiving payments. The bill would lower the interest rate on loans from above 10% to 1%, extend the repayment period (1 year before claims are offset and 2 years to repay the full outstanding balance), and reduce the per-claim recoupment rate to no more than 25% of Medicare reimbursement claims. It also would ensure that Part B premiums are not adversely impacted by this program.

A less publicized, but important, measure in the act would postpone implementation of the Medicaid Fiscal Accountability Regulation (MFAR) until after the end of the COVID-19 emergency. The controversial MFAR rule, proposed in November 2019, tightens regulations surrounding state-based Medicaid supplemental payment programs, which could lead to significant Medicaid cuts.

States and provider groups have opposed MFAR, arguing that it undermines existing financing and supplemental payment arrangements, will increase state budget deficits, and jeopardizes access to care for Medicaid patients, particularly in underserved areas. Postponing MFAR would help preserve Medicaid programs and prevent additional regulatory burdens at a time when many physician practices are struggling to meet the needs of their patients and staff.

Workplace safety for health care workers

As physician practices begin to reopen for nonurgent procedures and surgeries, providers will be at an increased risk of contracting the novel coronavirus. HEROES seeks to address this by requiring the Occupational Safety and Health Administration (OSHA) to issue emergency temporary standards for certain at-risk industries, including employees in the health care sector who are at “occupational risk of exposure” to COVID-19. Within 2 years, OSHA would be required to develop a permanent infectious disease standard.

In the interim, the temporary standards would require covered employers to protect workers from exposure to COVID-19 by developing and implementing an infectious disease control plan that is at least as protective as the measures issued by any OSHA state plan to protect workers from novel pathogens. HEROES also contains whistleblower protections for workers who report health and safety hazards, including a lack of personal protective equipment, in the workplace.

Various health care organizations and medical groups including the American Medical Association, the American Hospital Association, the Association of American Medical Colleges, and the American College of Physicians have endorsed the HEROES Act in whole or in part.

Although the Senate is not expected to take up the House-passed act for consideration, they will likely consider some additional form of relief. The provider community should stay engaged in the process and advocate for the inclusion of the measures discussed in this article in whatever legislative package emerges from the Senate.