Senate Republicans Release New COVID-19 Proposal

August 3, 2020

Senate Majority Leader Mitch McConnell (R-KY) released a new COVID-19 response proposal, the HEALS Act, last week. The legislation attempts to bolster the nations’ COVID-19 response via economic relief for businesses, support for the health care system, funding to reopen schools this fall, and liability protections for a range of entities including hospitals. The bill is the Senate Republican proposal for the fourth major Congressional COVID-19 response bill and serves as a counteroffer to the House Democrats’ $3.5 trillion HEROES Act, which passed the House in May.

Unfortunately, the HEALS Act fails to address several of GNYHA’s top priorities such as forgiveness of Medicare advances, funding for state governments to avert Medicaid cuts, and significantly more funding for the $175 billion provider relief fund (the Public Health and Social Services Emergency Fund) created in the CARES Act. However, GNYHA does support the medical liability and telehealth provisions in the bill.

The HEALS Act’s medical liability protections would establish an exclusive Federal cause of action for such claims and would preempt any state laws that offer lesser protections. Claims concerning the treatment, diagnosis, and care of coronavirus, as well as care directly affected by the coronavirus would be included. The expansion of telehealth in Medicare through flexibilities made available during the public health emergency would continue and be maintained through the length of the public health emergency, or December 31, 2021, whichever is later.

A significant flaw in this legislation is that it includes only minor changes to the Medicare accelerated payment program that was included in the CARES Act and enabled hospitals to receive a six month Medicare advance (with other provider types eligible for a three month advance). This program was a vital source of funding for providers nationwide to sustain cash flows during the initial COVID-19 surge. The recoupment period for the hospital loans begins 120 days after the advance was issued, or early August for most hospitals. Hospitals have up to one year to repay the advance, with 10% interest accruing on unpaid balances still due after one year. Under the HEALS Act, the initial recoupment date would be delayed until January 1, 2021, and the interest-free repayment period would be extended from 12 months to 18 months—however, the bill would not reduce the current 10% interest rate. The HEALS Act provisions are woefully insufficient to address the severe financial challenges facing hospitals as they are still in midst of the pandemic response. GNYHA will continue to advocate converting the advances into loans.

The legislation also fails to meaningfully address the budgetary crises facing state and local governments, which are experiencing significant revenue shortfalls due to economic shutdowns. While the bill allows states and localities more flexibility with the CARES Act’s $150 billion Coronavirus Relief Fund, which can be used to establish temporary public medical facilities for COVID-19 care, it doesn’t provide any direct aid to mitigate the effects of decreased revenues. Without Federal support, there is a strong possibility of significant cuts to state Medicaid programs and other state and local health care spending. GNYHA is advocating for an $875 billion increase in funding for state and local governments, similar to what was included in the House-passed HEROES Act.
The Senate Republican relief package also includes the following provisions:

  • $16 billion in new funding for COVID-19 testing infrastructure
  • $26 billion to bolster vaccine research, distribution, and use
  • $15.5 billion for research at the National Institutes of Health
  • $7.6 billion to support community health centers
  • The Time to Rescue United States Trusts (TRUST) Act, which would establish committees tasked with developing recommendations and legislation to improve critical social contract programs

Senate Republicans will now begin negotiations with Senate Minority Leader Chuck Schumer (D-NY) as the bill needs Democratic support to reach the 60 votes required to pass the Senate. House Speaker Nancy Pelosi (D-CA) and Trump Administration officials are also at the negotiating table. GNYHA will continue to work with Senator Schumer, who has been a champion for hospitals nationwide throughout the COVID-19 crisis, the New York Congressional delegation, and our allies nationwide to advocate for its top legislative priorities, which can be found here.