AACOM Analysis of Coronavirus Aid, Relief, and Economic Security (CARES) Act

2020-05-06 | , American Association of Colleges of Osteopathic Medicine

Coronavirus Aid, Relief, and Economic Security (CARES) Act
(P.L. 116-136)

Phase 3: Major economic stimulus package

$2.3 trillion major stimulus package, including loans and support to major industries (e.g. airlines and small businesses) and direct payments to individuals and families. Became law March 27, 2020.


  • Bill sponsor: Sen. Mitch McConnell (R-KY)
  • Introduced: March 23, 2020
  • Signed into law: March 27, 2020


  • Direct payments to individuals: $1,200 per adult, with an additional $500 per child
  • Hospital investments
    • $100 billion for hospitals
    • $1 billion to Indian Health Service
    • $16 billion for building a stockpile of medical equipment
    • Increases reimbursements by 20% for treating Medicare patients with coronavirus
  • $350 billion in loans for small businesses
    • Loans to small businesses would be forgiven if payrolls are maintained
  • Unemployment benefits increased $600/week for four months
  • $150 billion for state and local funds, including $8 billion for tribal governments


Institutes of Higher Education

Institutional Refund and Federal Student Loan Flexibility

  • For students who dropped out of school as a result of COVID -19, the student is not required to return Pell grants or federal student loans to the Secretary
  • Waives the requirement that institutions calculate the amount of grant or loan assistance that the institution must return to the Secretary in the case of students who dropped out of school as a result of COVID-19

Satisfactory Progress

  • For students who dropped out of school as a result of COVID-19, the student’s grades do not affect a student’s federal academic requirements to continue to receive Pell Grants or student loans

Student Aid

Temporary Relief for Federal Student Loan Borrowers

  • Requires the Secretary to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans
  • This provides relief for over 95 percent of student loan borrowers

Technical Amendments

  • Makes technical edits to the FUTURE Act to improve implementation and aid student loan borrowers
  • Excludes loans borrowed from counting towards annual or cumulative limits if a borrower is unable to complete the term due to a qualifying emergency

Supplemental Appropriations

Education Stabilization Fund

  • Flexible funding that will get out the door quickly and go directly to states, local school districts, and institutions of higher education (IHEs) to help schools, students, teachers, and families with immediate needs related to coronavirus, including
    • $14.25 billion in funding to IHEs to directly support students facing urgent needs related to coronavirus, and to support institutions as they cope with the immediate effects of coronavirus and school closures
      • This provides targeted formula funding to IHEs, as well as funding for minority serving institutions and HBCUs
    • $3 billion in state flexibility funding to be allocated by states based on the needs of their elementary and secondary schools and their IHEs
      • Includes a special priority for schools who are not receiving at least $500,000 from the $14.25 billion higher education fund

Health Care

Medical Product Supplies

Requiring the strategic national stockpile to include certain types of medical supplies

  • Clarifies that the Strategic National Stockpile can stockpile medical supplies, such as the swabs necessary for diagnostic testing for COVID-19

Treatment of respiratory protective devices as covered countermeasures

  • Provides permanent liability protection for manufacturers of personal respiratory protective equipment, such as masks and respirators, in the event of a public health emergency, to incentivize production and distribution

Discontinuance or interruption in the production of medical devices

  • Clarifies that during a public health emergency, a medical device manufacturer is required to submit information about a device shortage or device component shortage upon request of the FDA

Public Health and Social Services Emergency Fund: $127 billion

  • Reimbursement to Hospitals & Healthcare Providers: $100 billion to ensure healthcare providers continue to receive the support they need for COVID-19 related expenses and lost revenue

Strategic National Stockpile: $16 billion to procure personal protective equipment, ventilators, and other medical supplies for federal and state response efforts

  • When combined with the first supplemental, the Committee has provided approximately $17 billion for the Stockpile
  • Vaccine, Therapeutics, Diagnostics, and other Medical or Preparedness Needs: $11 billion
  • Includes at least $3.5 billion to advance construction, manufacturing, and purchase of vaccines and therapeutic delivery to the American people
  • This is in addition to the billions already provided for these activities in the first supplemental
  • Hospital Preparedness: Not less than $250 million to improve the capacity of healthcare facilities to respond to medical events
  • HRSA: $275 million to expand services and capacity for rural hospitals, telehealth, poison control centers, and the Ryan White HIV/AIDS program
    • Language is also included to allow Community Health Centers to use FY2020 funding to maintain or increase staffing and capacity to address the coronavirus
  • $4 million for HHS Office of Inspector General for oversight activities

Access to Health Care for COVID-19 Patients

Supplemental awards for health centers

  • $1.32 billion in supplemental funding to community health centers on the front lines of testing and treating patients for COVID-19

Rural health care services outreach, rural health network development, and small health care provider quality improvement grant programs

  • Reauthorizes HRSA grant programs to strengthen rural community health by focusing on quality improvement, increasing health care access, coordination of care, and integration of services

United States Public Health Service Modernization

  • Establishes a Ready Reserve Corp to ensure we have enough trained doctors and nurses to respond to COVID-19 and other public health emergencies

Limitation on liability for volunteer health care professionals during COVID-19 emergency response

  • Makes clear that doctors who provide volunteer medical services during the public health emergency related to COVID-19 have liability protections

Flexibility for members of National Health Service Corps during emergency period

  • Allows the Secretary of HHS to reassign members of the NHSC to sites close to the one to which they were originally assigned, with the member’s agreement, in order to respond to the COVID-19 public health emergency

Allowing Federally Qualified Health Centers (FQHCs) and Rural Health Clinics to Furnish Telehealth in Medicare

  • This section would allow, during the COVID-19 emergency period, FQHCs and Rural Health Clinics to serve as a distant site for telehealth consultations
  • A distant site is where the practitioner is located during the time of the telehealth service
  • This section would allow FQHCs and RHCs to furnish telehealth services to beneficiaries in their home
  • Medicare would reimburse for these telehealth services based on payment rates similar to the national average payment rates for comparable telehealth services under the Medicare Physician Fee Schedule
  • It would also exclude the costs associated with these services from both the FQHC prospective payment system and the RHC all-inclusive rate calculation.

Health Care Workforce

Reauthorization of health professions workforce programs through FY 2025, including:

  • $23.7 million for Centers of Excellence (decrease from $50 million)
  • $51.5 million for Scholarships (increase from $50 million)
  • $1.2 million for Loan Repayments and Fellowships (decrease from $5 million)
  • $15,000 for educational assistance in health professionals from disadvantaged backgrounds (decrease from $60 million)
  • $41.25 million for AHECs (decrease from $125 million)

Extends mandatory funding for CHCs, the NHSC, and THCGME Program at current levels through November 30, 2020

  • THCGME Program - $126.5 million total for FY20 and $21,141,096 for October 1, 2020-November 30, 2020

Education and training relating to geriatrics

  • Reauthorizes and updates Title VII of the Public Health Service Act (PHSA), which pertains to programs to support clinician training and faculty development, including the training of practitioners in family medicine, general internal medicine, geriatrics, pediatrics, and other medical specialties

Workforce Response Activities

  • Allows Governors to utilize reserved workforce funds on rapid response activities in response to COVID-19

Physician Practice

Increasing Provider Funding through Immediate Medicare Sequester Relief

  • This section would provide prompt economic assistance to health care providers on the front lines fighting the COVID-19 virus, helping them to furnish needed care to affected patients
  • Specifically, this section would temporarily lift the Medicare sequester, which reduces payments to providers by 2 percent, from May 1 through December 31, 2020, boosting payments for hospital, physician, nursing home, home health, and other care
  • The Medicare sequester would be extended by one-year beyond current law to provide immediate relief without worsening Medicare’s long-term financial outlook

Clarification Regarding Uninsured Individuals

  • Clarifies a section of the Families First Coronavirus Response Act of 2020 (PL 116-127) by ensuring that uninsured individuals can receive a COVID-19 test and related service with no cost-sharing in any state Medicaid program that elects to offer such enrollment

Clarification Regarding Coverage of Tests

  • Clarifies a section of the Families First Coronavirus Response Act of 2020 (PL 116-127) by ensuring that beneficiaries can receive all tests for COVID-19 in Medicare Part B with no cost-sharing

Coronavirus Relief Funds

Coronavirus Relief Fund

  • Provides $150 billion to States, Territories, and Tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID- 19 in the face of revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations

Supplemental Appropriations

  • Centers for Disease Control (CDC) and Prevention: $4.3 billion
  • National Institutes of Health (NIH): $94.5 million for vaccine, therapeutic, and diagnostic research
    • Increases our understanding of COVID-19, including underlying risks to cardiovascular and pulmonary conditions
    • When combined with the first supplemental, the Congress has provided $1.78 billion for NIH research
  • Substance Abuse and Mental Health Services Administration: $425 million to address mental health and substance use disorders as a result of the coronavirus pandemic


Emergency paid sick leave limitation

  • Creates a limitation stating an employer shall not be required to pay more than $511 per day and $5,110 in the aggregate for sick leave or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee under this section