The Latest COVID-19 Relief Bill: Hits and Misses for Medicine
By Joey Berlin


For most of the nation, the headliner in the latest COVID-19 relief bill is another round of direct stimulus payments to individuals and families that earn less than a certain dollar threshold.

But for organized medicine and public health, there’s much more to chew on in the American Rescue Plan (ARP) Act of 2021, the third major COVID-19 relief measure and the first under the Biden administration. Texas Medical Association staff says there’s promising funding available in the bill that could help Texas cover a swath of its uninsured population, and key dollars for behavioral health, among other important pieces. But there’s also the prospect of a Medicare physician payment cut.

Below is a look at some of the ways ARP helps medicine, and some ways in which it doesn’t.

Help for the Disadvantaged 

Coverage expansion incentives: With its sights on lowering Texas’ nation-worst uninsured rate, TMA has made some form of coverage expansion one of its top-line agenda items for this session of the Texas Legislature. TMA believes Medicaid can be expanded through a “Texas solution” tailored to the Lone Star State, as other states have done in covering their expansion populations.

The federal rescue package provides an enticement for the states that haven’t expanded Medicaid to do so. Under ARP, states that expand would receive an additional 5% federal Medicaid funding for two years, on top of the existing state match, for its already-covered Medicaid population. (For Texas, the current existing match is 61.18% plus 6.2% added during the public health emergency.) Additionally, Texas would receive 90% in federal matching funds for the so-called “expansion population,” with no expiration date for that match.

“I’ve heard both sides of the aisle (in the Texas Legislature) talk about an agreement that they need an infusion of more funds,” said Fort Worth pediatrician Gary Floyd, MD, chair of TMA’s Board of Trustees and a member of the American Medical Association’s (AMA’s) Council on Legislation. “Hopefully this [ARP] will be the enticement to pull down more of the federal dollars into Texas. I mean, those are Texas tax dollars that tend to get distributed other places because we don’t participate.”

Addressing poverty, social determinants: Helping the poor was one of ARP’s primary aims. Helen Kent Davis, TMA’s associate vice president of governmental affairs, says the act’s temporary expansion of the earned income tax credit is a major step to address poverty, which is tied to health outcomes. More of the poorest families will now be eligible for the earned income tax credit, which Ms. Davis says historically has been designed in such a way that usually shuts out the neediest families. Reduced poverty means reduced negative impacts resulting from social determinants of health such as access to food or transportation.

ARP also temporarily expands the child tax credit and expands premium assistance for marketplace health plans. It also includes new tax credits for people making over 400% of the federal poverty level and caps their premiums at no more than 8.5% of their income.

“Clearly, what [the act is] trying to do is address coverage in a way that’s cost-effective,” Ms. Davis said. “But in terms of efforts to reduce poverty, it’s definitely one of the most positive bills we’ve ever had.”

Extended postpartum coverage: If states choose to take it, ARP offers states the ability to extend Medicaid postpartum coverage a full 12 months without the need for a waiver. Currently, Medicaid coverage ends at 60 days postpartum. As it did two years ago, TMA is pushing for the Texas Legislature to approve an extension of postpartum coverage to 12 months.

Austin OB-gyn Kimberly Carter, MD, says one-year of postpartum coverage would give physicians the ability to address a number of typical conditions that arise post-birth.

“We could take care of chronic conditions such as high blood pressure, and especially medical illnesses that affected pregnancies and could affect [women’s] next pregnancy,” she said. “When we have people who have preeclampsia, for example, they’re at increased risk for cardiac events the first year postpartum. So it’d be good to have them monitored.”  

Other Valuable Funding

TMA staff are encouraged by a number of Congress’ other spending allocations in ARP, including much-needed assistance on the behavioral health front. As noted in an AMA summary of the act, the package includes:  

  • $1.5 billion in block grants for community mental health services;
  • Another $1.5 billion in block grants for prevention and treatment of substance use disorder; and
  • $80 million for mental health and substance-use disorder training for health professionals, public safety officers, and paraprofessionals (aides who assist in day-to-day mental health care tasks.

Overall, the $1.9 trillion package contains more than $165 billion for improving vaccine distribution, testing, and public health initiatives. That includes:

  • $10 billion for use of the Defense Production Act to generate personal protective equipment, rapid COVID-19 tests, and vaccines; and
  • $7.7 billion for sustaining and expanding local public health workforces.  

Where the Bill Fell Short

However, as it stands now, ARP will hit physicians who see Medicare patients in their pocketbooks. 

Ms. Davis says the COVID-19 relief measure likely will trigger “pay as you go” requirements that would cut Medicare physician payments by 4%, unless Congress advances another piece of legislation to address that reduction. That’s especially bad news for doctors already bracing themselves for the long-delayed 2% Medicare sequestration cuts that are scheduled to kick in this April.

Federal lawmakers are taking a look at both cuts. Congress last week passed H.R. 1868, which would shield Medicare from the 4% cut and extend postponement of the 2% cut to the end of the year, but the measure faces an uphill battle in the Senate.

Dr. Floyd would’ve liked to see the 2% sequester addressed in the COVID-19 bill.

“Physicians [should] stand against both cuts, 2% and 4%, especially since the majority of practices have been significantly devastated financially during this pandemic,” Dr. Floyd said. “It really doesn’t make sense that the heroes of last year should be the patsies for the next year.”

Dr. Floyd also notes potentially valuable pieces of TMA’s legislative agenda that went unaddressed in the federal legislation, including increasing physician payments in Medicaid and establishing permanent payment parity for telemedicine services to cover them the same way as in-person services are covered.

AMA was ultimately neutral on the rescue act. Its summary noted that the measure “contains appropriations without offsetting spending cuts.”

Last Updated On

March 22, 2021

Originally Published On

March 22, 2021

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