Hospitals to receive an additional $75 Billion in the Paycheck Protection Program and Health Care Enhancement Act

Paycheck Protection Program and Health Care Enhancement Act

On Friday, President Trump signed the $484 billion Paycheck Protection Program and Health Care Enhancement Act into law, the fourth economic stimulus package since the start of the COVID-19 pandemic. The new package’s goal is to augment the Paycheck Protection Program and Healthcare funding of the CARES Act that was passed in March and quickly ran out of funds.

This new bill contains $370 billion to replenish the Paycheck Protection Program (PPP), $60 billion of which is set aside for medium, small and community lenders. Healthcare facilities with fewer than 500 employees are able to utilize this program like the first round. Another $75 billion has been set aside specifically to reimburse providers for the cost of treating COVID-19 patients. These funds will be available through the U.S. Department of Health and Human Services (HHS) like the previous round of funding. Finally, $25 billion has been authorized specifically for developing and implementing testing protocols.

Like many other businesses, healthcare providers may have found themselves unable to receive funding from the initial round of PPP, since the initial funds were depleted by April 17. The Small Business Administration resumed accepting applications on Monday, April 27 for the current act. The Department of the Treasury has released a Frequently Asked Questions to help navigate the PPP.

According to the bill itself, “the Public Health and Social Services Emergency Fund will receive $75 billion to remain available until expended, to prevent, prepare for and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible healthcare providers for healthcare related expenses or lost revenues that are attributable to COVID-19.”

The bill lists eligible healthcare providers as public entities, Medicare or Medicaid enrolled suppliers and providers, and for-profit and not-for-profit entities that provide diagnoses, testing or care for individuals with possible or actual cases of COVID-19. Like the CARES Act, funds from the Paycheck Protection Program and Health Care Enhancement Act can be used for temporary structures, leases, medical supplies and equipment, testing supplies, increased workforce needs, emergency operation centers, retrofitting existing facilities and extra surge capacity needs.

The current act may help reduce some of the confusion around what organizations can access the $75 billion in healthcare funding for by providing $25 billion specifically for testing. Previously, states and other groups were able to access the healthcare funding portions for testing, but now they can work directly with HHS for the necessary expenses to research, develop, validate, manufacture, purchase, administer and expand capacity for COVID-19 tests. It also requires states, localities, territories and tribes to outline their own testing plans and plans to ease coronavirus mitigation strategies. The bill also lays out the use of $1 billion from this fund to cover the cost of testing for the uninsured.

While there are still a lot of unknowns as to how the Coronavirus will continue to impact our world, Groups like the American Hospital Association are applauding these and other efforts. In a release from April 21, AHA president and CEO Rick Pollack said, “The initial CARES Act funds are already being used by hospitals and health systems to increase capacity and provide care, and in some cases to keep access to care available by keeping the doors open. This additional funding will help ensure that critical care can continue to be provided by front line providers throughout the country.”

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