$484 Billion Stimulus Bill Replenishes Paycheck Protection Program and Provides Additional Funding for Health Care Providers and Coronavirus Testing


HHS Unveils Provider Relief Fund Distribution Plan

April 24, 2020

Client Alert
Paycheck Protection Program and Health Care Enhancement Act (“Act”), the latest coronavirus relief bill, was passed by Congress on April 23, 2020 and signed into law on April 24, 2020.1 This $484 billion relief package is the follow-up to the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) stimulus which passed almost a month prior. While the Act is the fourth piece of legislation to address the COVID-19 crisis, it is largely considered an “interim” or “Phase 3.5” stimulus package, with a larger, Phase 4 legislative stimulus yet to come.2

The Act amends the CARES Act to authorize (i) additional funding for the Paycheck Protection Program (“PPP”) in accordance with Section 7(a) of the Small Business Act and emergency economic injury disaster loans and grants, (ii) additional funding for hospitals and other health care providers through the CARES Act Provider Relief Fund, and (iii) additional funding for coronavirus testing efforts.

The following Alert summarizes (i) key portions of the Act and (ii) recently released information from the Department of Health and Human Services (“HHS”) explaining its plans to allocate and distribute the Provider Relief Fund money.

Increased Funding for PPP and Emergency Loans

The Act authorizes additional funding for the CARES Act loan programs, as follows:

In an attempt to extend the reach of the PPP to underserved small businesses that were unable to secure PPP loans in the first round, $60 billion of the new round of PPP funding has been specifically set aside for loans made by smaller lending facilities, including community financial institutions and small and mid-sized insured depository institutions and credit unions (with consolidated assets of less than $50 billion and $10 billion, respectively).

Additional $75 Billion for Provider Relief Fund; HHS Releases Details Regarding Fund Allocation

Additional $75B to Provider Relief Fund. The CARES Act allocated $100 billion to the “Public Health and Social Services Emergency Fund” to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus (the “Provider Relief Fund”). The Act adds another $75 billion to the Provider Relief Fund. As with the CARES Act, the Act provides little guidance regarding distribution, leaving HHS with broad discretion on fund administration.

Provider Relief Fund Allocation. As of the publishing of this Alert, only $30 billion of the first tranche of the Provider Relief Fund has been distributed by HHS. Such payments were made to Medicare fee-for-service (“FFS”) providers by direct deposit on April 10, 2020 or by check on April 17, 2020. Payments were allocated using a formula roughly equal to 6.2% of the eligible recipient’s 2019 FFS Medicare revenue. Providers without Medicare FFS revenues were left out of this initial $30 billion funding distribution.

HHS is still determining how the remaining Provider Relief Fund monies will be distributed, but recently announced some specific distribution targets for the remaining $70B of the initial tranche on its Provider Relief Fund website: 3

Providers should visit HHS’s Provider Relief Fund website site for evolving information.

$25 Billion in Funding for COVID-19 Testing

The Act also appropriates $25 billion to support COVID-19 testing efforts, including research, development, procurement, administration and contract tracing and other related activities. The funding specifically earmarks $11 billion for states, localities, territories and tribes to develop, purchase, administer, process and analyze COVID-19 tests, scale-up laboratory capacity, trace contacts and support employer testing. It also provides $1.8 billion to the National Institutes of Health and $1 billion to the Centers for Disease Control and Prevention for additional testing efforts.

  1. The H.R. 266.
  2. The first, second and third phases of coronavirus relief legislation, respectively, are: (1) the Coronavirus Preparedness and Response Supplemental Appropriations Act (P. L. 116-123) which was signed into law on March 6, 2020, (2) the Families First Coronavirus Response Act (P.L. 116-127), which was signed into law on March 18, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which was signed into law on March 27, 2020 (P.L. 116-136).
  3. https://www.hhs.gov/provider-relief/index.html

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