[Updated] Biden Releasing $25.5B in COVID-19 Provider Funding

After continual calls to release the billions of dollars remaining in the Provider Relief Fund to health care providers — including nursing homes — the Biden administration announced on Friday that $25.5 billion in new funding will be made available to health care providers affected by the COVID-19 pandemic.

The portal application will open on Sept. 29. The $25.5 billion that will be made available for health care providers will include $17 billion from phase four of the Provider Relief Fund. An additional $8.5 billion from the American Rescue Plan will assist providers who serve rural Medicaid, Children’s Health Insurance Program (CHIP) and Medicare patients.

“This funding critically helps health care providers who have endured demanding workloads and significant financial strains amidst the pandemic,” United States Department of Health and Human Services (HHS) Secretary Xavier Becerra said in a statement. “The funding will be distributed with an eye towards equity, to ensure providers who serve our most vulnerable communities will receive the support they need.”

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The American Health Care Association and National Center for Assisted Living (AHCA/NCAL), a loud advocate for releasing the funds, says the support is long overdue but greatly appreciated.

“Nursing homes and assisted living communities continue to spend billions of dollars to fight COVID while grappling with an economic and workforce crisis spurred by the pandemic,” said Mark Parkinson, president and CEO of AHCA/NCAL. “These federal funds are critical in helping providers acquire the ongoing staff support, personal protective equipment, and testing they need to protect our residents and staff members as well as prevent facility closures. We hope to see this aid delivered swiftly to the frontlines, so our nation’s most vulnerable continue to receive the high quality, long term care they deserve.”

PRF phase four payments will be based on providers’ lost revenues and expenditures between July 1, 2020 and March 31.

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It will include bonus payments for providers who serve Medicaid, Children’s Health Insurance Program, and Medicare patients who tend to be lower income and have greater and more complex medical needs.

American Rescue Plan rural payments, which will total $8.5 billion, are intended to serve a disproportionate number of Medicaid and CHIP patients who often have disproportionately greater and more complex medical needs and have been hit particularly hard by the pandemic.

ARP rural payments will also generally be based on Medicare reimbursement rates.

“We are thrilled that the application process for additional Provider Relief Funds is being opened up and that payments in this phase are structured to address the specific financial challenges of medium and small providers, as well as those who serve Medicaid, CHIP and/or Medicare patients,” Katie Smith Sloan, president and CEO of LeadingAge, an association of nonprofit providers, said in a statement released on Friday. “Aging services providers, who operate on narrow margins in the best of times, need relief after more than a year of shouldering significant COVID-related costs.”

Providers will apply for both PRF and ARP payments in a single application that will open on September 29. The Health Resources and Services Administration will use existing Medicaid, CHIP and Medicare claims data in calculating payments.

PRF recipients will be required to notify Becerra of any merger or acquisition during the period in which they can use the payments.

The HHS also announced a 60-day grace period to help providers get into compliance with PRF reporting requirements if they fail to meet the September 30 deadline.

Several members of Congress asked for the remainder of the PRF to be released to health care providers in multiple letters recently sent to HHS.

“We believe it is imperative for the Administration to continue to fight the pandemic with all available means, including by swiftly disbursing PRF funds to providers buckling under the weight of surging COVID-19 cases,” one letter signed by Senate Republican Mitch McConnell (Ky.), among others, read.