American Recovery & Reinvestment Act of 2009

1. American Recovery & Reinvestment Act of 2009

2. American Recovery &Reinvestment Act of 2009 (ARRA) $787 billion in total spending Billions

3. Medicaid Funding (FMAP) • Medicaid and Medicare Regulations • COBRA • Health Information Technology • Community Health Centers • Broadband Technology • Workforce • Health and Wellness Items of Major Significance to Hospitals

4. ARRA increases federal Medicaid spending by a total of $86.6 billion nationwide through a 6.2% temporary increase to the base federal Medical Assistance percentage (FMAP) rate for all states for nine quarters (beginning 10-1-08 and ending 12-31-10). • Estimated that Pennsylvania will receive $4.07 billion over the nine quarters. For Pennsylvania, this is estimated to be: • For state fiscal year 2009: $1.200 billion • For state fiscal year 2010: $1.907 billion • For state fiscal year 2011: $963 million ARRA—Medicaid Funding

5. Extends moratoria on Medicaid regulations through June 30, 2009, for targeted case management, school-based administration and transportation services, and provider taxes. • The latter regulation would have reduced the threshold from 6% to 5.5% and tightened the hold-harmless tests—would have impacted the nursing home tax and the proposed tax on hospitals in Philadelphia. • Adds a moratorium on the Medicaid regulation for hospital outpatient services. • Would have reduced the upper payment limit for outpatient services through June 30, 2009. ARRA-Medicaid Regulations

6. Provides that the Secretary of Health and Human Services (HHS) should not promulgate regulations concerning Medicaid intergovernmental transfers, rehabilitative services, and graduate medical education. • Blocks a federal fiscal year 2009 Medicare payment reduction to teaching hospitals related to capital payments for indirect medical education (IME). ARRA-Medicaid/Medicare Regulations

7. Provides federal subsidies for COBRA • premiums for workers with annual • incomes below $125,000 (single) or • $250,000 (couples) at 65% of the premium for nine months. • The U.S. Treasury Department will administer this program. • HAP will be sending out more detail on these provisions to assist hospitals in understanding the implications for hospitals as large employers, and in assisting uninsured persons in accessing health care coverage. ARRA—COBRA

8. Provides $17.2 billion funding for HIT incentive payments under the Medicare and Medicaid programs, including temporary Medicare incentive payments beginning during federal fiscal year 2011 for hospitals that demonstrate “meaningful use of electronic health records.” • Meaningful users of HIT are hospitals using certified electronic health records systems that include patient demographic and clinical health information and have the capacity to: • Provide clinical decision support. • Exchange/integrate electronic health information from other services. • Non-hospital-based physicians are also eligible for Medicare • HIT incentive payments. ARRA—Health Information Technology

9. Provides Medicare and Medicaid payments for HIT for critical access hospitals, FQHCs, rural health clinics, and children’s hospitals. • Phases-in Medicare payment penalties beginning in federal fiscal year 2015 for physicians and hospitals that are not meaningful electronic health record users. • HAP will be: • Providing a more detailed summary of ARRA’s HIT provisions, as well as the hospital-specific estimates on the impact of the HIT Medicare incentives. • Working with state officials and others to evaluate other HIT funding opportunities afforded under the ARRA, including incentives for Medicaid providers, and state loans or grants to promote HIT. ARRA—Health Information Technology

10. Potential ARRA Medicare HIT Incentive Payments, FFY 2011-2014

11. Includes $500 million for community health centers authorized under section 330 of the Public Health Service Act to provide care to uninsured and underserved rural and urban populations. • There is an additional $1.5 billion allocated to help community health centers renovate and modernize their facilities and equipment, including HIT. • The HHS Secretary is to provide a plan no later than 90 days from enactment of ARRA that includes what community health center activities will be supported and the timeline for HSS implementation. ARRA—Community Health Centers

12. There is an appropriation of $4.7 billion, to be administered by the Commerce Department, for grants to states and other entities to increase broadband access and usage in unserved and underserved areas. • An additional $2.5 billion is authorized for loans under the Rural Electrification Act of 1936, as administered by the Agriculture Department. ARRA—Broadband Technology

13. Provides $500 million to support the National Health Service Corps, including training of primary care physicians and nurses, and to repay loans. • HHS has 90 days within which to announce its plan and timeline for providing additional funds for scholarships, loan repayment, and grants to training programs. ARRA—Workforce

14. $10 billion to conduct biomedical research in areas such • as cancer, Alzheimer’s disease, heart disease, and stem cells, • and to improve National Institutes of Health (NIH) facilities. • $1.1 billion to the Agency for Healthcare Research and Quality, NIH, and HHS to evaluate the relative effectiveness of different health care services and treatment options. • $1 billion for a new prevention and wellness fund to fight preventable diseases and conditions with evidence-based strategies, including: • $300 million allocated to the CDC for immunization programs • $650 million for evidence-based clinical and community-based prevention and wellness strategies that deliver specific, measurable health outcomes that address chronic disease • $50 million for states to assist in reduction of health care-associated infections. ARRA—Health and Wellness