Congress opts not to use Provider Relief Fund allocations as an infrastructure funding source

Both the House and Senate also have introduced bills to give PRF recipients more time to spend money that was distributed before July 2020.

For hospitals and health systems, the past week brought two pieces of promising news regarding the Provider Relief Fund.

Most recently, the Aug. 1 release of the text for the bipartisan infrastructure bill confirmed that no money from the PRF would be used to fund the $550 billion in new spending within the bill.

In late June, amid reports that Congress might redirect some of the $32.5 billion remaining in the fund, several hospital associations wrote a joint letter to congressional leaders to express their concerns about such a tactic. The American Hospital Association (AHA), which was one of the signatories on the letter, followed up with another letter to Senate leaders in July to drive home the point.

“Diverting these funds in order to offset the costs of an infrastructure proposal while the pandemic continues and needs persist is inappropriate,” the AHA wrote.

The U.S. Department of Health and Human Services has not given information on the timing or formula for the release of the remaining funds. The most recent distribution, in December and January, marked the third phase of funding from the general-distribution pool; there also have been various “targeted” distributions, such as to safety-net and children’s hospitals.

The $32.5 billion includes $8.5 billion earmarked specifically for rural providers by the 2021 COVID-19 relief legislation.

Other bills would push back initial spending deadline

In other legislative news related to the PRF, each chamber of Congress has introduced a bipartisan bill designed to give providers more time to utilize early disbursements.

In the House, the Provider Relief Fund Deadline Extension Act would give providers additional time to spend PRF funding received by June 30, 2020. The extension would last through Dec. 31, 2021 or the end of the COVID-19 public health emergency, whichever comes later. Similar legislation has been introduced in the Senate.

The deadline for spending that initial funding was June 30, 2021, and the 90-day mandatory reporting period on use of those funds is underway. Barring a retroactive postponement of the deadline, any funds that were received before July 2020 and remain unused are supposed to be returned to HHS.

Infrastructure funding would still cost providers

The hospital groups also had asked that Congress avoid prolonging the 2% Medicare payment sequester by one year, through 2031, but the extension remained in the legislative text as an infrastructure pay-for.

The sequester has been frozen during the public health emergency but is scheduled to be reinstated at the start of 2022.