Congress Passes Additional $100 Billion in Aid for Public Health and Social Services Emergency Fund

April 24, 2020
Firm Publication

On April 21, the U.S. Senate approved an additional $100 billion in funding for the Public Health and Social Services Emergency Fund established under the CARES Act, including $75 billion for eligible healthcare providers and $25 billion for COVID-19 testing. The Senate bill was approved by the House of Representatives April 23 and is expected to be signed by President Trump today.

$75 Billion for Eligible Healthcare Providers

 Of the $100 billion in additional funds under the Public Health and Social Services Emergency Fund, $75 billion is made available to be used to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse “eligible healthcare providers” for healthcare-related expenses or lost revenues that are attributable to coronavirus, which include public entities, Medicare or Medicaid enrolled suppliers and providers that provide diagnosis, testing or care for individuals with possible or actual cases of COVID-19. The Secretary of the Department of Health and Human Services (HHS) has the authority to specify additional for-profit entities and not-for-profit entities as eligible healthcare providers.

Consistent with the previous funding, the funds will be available for building or construction of temporary structures, leasing of properties, medical supplies and equipment including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity. The funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.

The funds will be available on an application basis, which must include a statement justifying the need of the provider for the payment. Note, however, that HHS has been already issuing some of the prior allocated funds without an application process in some circumstances; opting instead to require attestations upon receipt of the funds. In addition, the eligible healthcare provider must have a valid tax identification number. HHS will review applications and make payments on a rolling basis. Notably, the term, “payment” is defined to include a pre-payment, prospective payment, or retroactive payment to account for the above expenses. Recipients of the funds will be required to submit reports and maintain documentation as directed by the Secretary of HHS and will be subject to audit by the Office of Inspector General (OIG).

$25 Billion for Additional Testing

The remaining $25 billion is made available for necessary expenses to research, develop, validate, manufacture, purchase, administer, and expand capacity for COVID-19 tests to effectively monitor and suppress COVID-19, including tests for both active infection and prior exposure. The bill incorporates, into these expenses, among other things, the manufacturing, procurement and distribution of tests, testing equipment and testing supplies (e.g., personal protective equipment needed for administering tests); and the development and validation of rapid, molecular point-of-care tests. In addition, the funds can be used to scale up academic, commercial, public health and hospital laboratories, to conduct surveillance and contact tracing and support the development of COVID-19 testing plans, and other related activities related to COVID-19 testing. The amounts appropriated may be used for any of the following:

  • Grants for the rent, lease, purchase, acquisition, construction, alteration, renovation, or equipping of non-federally owned facilities to improve preparedness and response capability at the state and local level for diagnostic, serologic, or other COIVD-19 tests, or related supplies.
  • Construction, alteration, renovation, or equipping of non-federally owned facilities for the production of diagnostic, serologic, or other COVID–19 tests, or related supplies, as determined necessary by the Secretary of HHS to secure or to produce sufficient amounts of such tests or related supplies.
  • The purchase of medical supplies and equipment, including personal protective equipment and testing supplies to be used for administering tests, increased workforce and trainings, emergency operation centers, and surge capacity for diagnostic, serologic, or other COVID–19 tests, or related supplies.
Two Categories of Recipients

The recipients of these funds are divided into two categories:

States, Localities, Territories, Tribes and Related Organizations

Funds are made available to states, localities, territories, tribes and related organizations as follows:

  • At least $11 billion is reserved for states, localities, territories, tribes, tribal organizations, urban Indian health organizations, or healthcare service providers to tribes for necessary expenses to develop, purchase, administer, process and analyze COVID-19 tests, including support for work-force, epidemiology, use by employers or in other settings, scale-up of testing by public health, academic, commercial and hospital laboratories, and community-based testing sites, healthcare facilities, and other entities engaged in COVID-19 testing, conduct surveillance, trace contacts, and other related activities related to COVID-19 testing. These funds must be allocated within 30 days of enactment of the Act.
  • At least $2 billion is reserved for states, localities, territories, tribes, according to a formula applied to the Public Health Emergency Preparedness cooperative agreement in fiscal year 2019. These funds also must be allocated within 30 days of the enactment of the Act.
  • At least $4.25 billion is reserved for states, localities, and territories, according to a formula methodology that is based on the relative number of cases of COVID-19.
  • At least $750 million must be allocated in coordination with the director of Indian health services, to tribes, tribal organizations, urban Indian Health organizations, or health services providers to tribes.

The Secretary of HHS may satisfy the funding thresholds above by making awards through other grant or cooperative agreement mechanisms. No later than 30 days after enactment, the governor or designee of each state, locality, territory, tribe or tribal organization receiving funds must submit to the Secretary of HHS its plan for COVID-19 testing, including goals for the remainder of 2020, to include all of the following:

  • The number of tests needed, month-by-month, to include diagnostic, serological, and other tests as appropriate.
  • Month-by-month estimates of laboratory and testing capacity, including related workforce, equipment and supplies, and available tests.
  • A description of how the state, locality, territory, tribe or tribunal organization will use its resources for testing, including as it relates to easing any COVID-19 community mitigation policies.

CDC, NIH and Other Funding

The remaining funds are made available to the Centers for Disease Control and Prevention (CDC), National Institutes of Health (NIH) and other organizations as follows:

  • Up to $1 billion may be used to cover the cost of testing for the uninsured.
  • $1 billion must be transferred to the CDC – Wide Activities and Program Support for surveillance, epidemiology, laboratory capacity expansion, contract tracing, public health data surveillance and analytics infrastructure modernization, disseminating information about testing, and work-force support necessary to expand and improve COVID-19 testing.
  • $306 million must be transferred to the NIH – National Cancer Institute to develop, validate, and implement serological testing and associated technologies.
  • $500 million must be transferred to the NIH – National Institute of Biomedical Imaging and Bioengineering to accelerate research, development and implementation of point of care and other rapid testing related to the coronavirus.
  • $1 billion must be transferred to the NIH – Office of the Director to develop, validate, improve and implement testing and associated technologies; to accelerate research, development and implementation of point of care and other rapid testing; and for partnership with governmental and non-governmental entities to research, develop, and implement such activities.
  • $1 billion is made available to the Biomedical Advanced Research and Development Authority for necessary expenses of advanced research, development, manufacturing, production and purchase of diagnostic, serologic, or other COVID-19 tests or related supplies, and other activities related to COVID-19 testing at the discretion of the Secretary of HHS.
  • $22 million must be transferred to the Food and Drug Administration – Salaries and Expenses to support activities associated with diagnostic, serological, antigen, and other tests, and related administrative activities.
  • $600 million must be transferred to the Health Resources and Services Administration – Primary Health Care for grants under the Health Centers program and grants to federally qualified health centers.
  • $225 million must be used to provide additional funding for COVID–19 testing and related expenses, through grants or other mechanisms, to rural health clinics, with such funds also available to such entities for building or construction of temporary structures, leasing of properties, and retro-fitting facilities as necessary to support COVID–19 testing.
Reporting Requirements of HHS to Congress

The legislation requires the Secretary of HHS, in coordination with other departments and agencies, to issue a report to certain Congressional Committees on COVID-19 testing within 21 days after enactment and every 30 days thereafter until the end of the COVID-19 public health emergency. The report must include:

  • Data on demographic characteristics, including, in a de-identified and disaggregated manner, race, ethnicity, age, sex, geographic region and other relevant factors of individuals tested for or diagnosed with COVID–19, to the extent such information is available.
  • Information on the number and rates of cases, hospitalizations, and deaths as a result of COVID–19.

In addition, not later than 30 days after enactment, the Secretary of HHS, in coordination with other departments and agencies, must report on a COVID–19 strategic testing plan that assists states, localities, territories, tribes, tribal organizations, and urban Indian health organizations, in understanding COVID-19 testing for both active infection and prior exposure, including hospital-based testing, high-complexity laboratory testing, point of care testing, mobile-testing units, testing for employers and other settings, and other tests as necessary.

Finally, not later than 180 days after the date of enactment, the Secretary of HHS must issue a report on the number of positive diagnoses, hospitalizations, and deaths as a result of COVID–19, disaggregated nationally by race, ethnicity, age, sex, geographic region, and other relevant factors.

If you have any questions about available funding under the Public Health and Social Services Emergency Fund, please contact the authors of this alert.