The bipartisan debt ceiling deal has officially signaled the death knell for the Provider Relief Fund, with billions in funds that potentially could have assisted senior living and other long-term care providers unspent.
The Health Resources & Services Administration on Monday released a program update indicating that with the passage of the Fiscal Responsibility Act of 2023, no further payments will be made to aging services providers under the PRF or the American Rescue Plan Rural Distribution. This stoppage includes providers seeking redeterminations of PRF awards. Any funds providers pay back through the PRF also will be kept.
The debt ceiling deal keeps federal nondefense discretionary spending approximately flat in fiscal year 2024, increasing it by 1% for 2025, an amount that LeadingAge said is “sure to be insufficient” for program costs that rise with inflation.
Among the measures in the act is a clawback of $28 billion in unspent and uncommitted COVID-19-related funding. Although long-term care advocacy groups initially thought the remaining PRF funds would be spared, that is not the case.
Uncertainties remain about how much money is left in the PRF: LeadingAge places the figure at $10 billion, whereas Argentum placed it is closer to $3 billion.
Cut off after years of waiting
Calling the PRF and ARP dollars a “lifeline to providers,” LeadingAge Nicole Fallon noted in a blog that the money helped operators buy personal protective equipment and incentivized staff members to remain working in assisted living communities, continuing care retirement / life plan communities and nursing homes as well as delivering home- and community-based services.
“Regrettably, the funds appropriated for PRF were unable to complete their important purpose in helping healthcare providers weather the incomprehensive financial hurdles they encountered,” Fallon wrote. “Some providers have waited for years for decisions on their reconsideration requests where they were erroneously denied funds in Phases 3 and/or 4. Sadly, the lifeline for these providers won’t be coming.”
The effects of the debt ceiling deal on some PRF payments or outstanding reconsiderations is “deeply frustrating,” American Seniors Housing Association President and CEO David Schless told McKnight’s Senior Living.
“It is extremely unfair to punish the very people who have sacrificed to keep residents and employees safe during the pandemic,” Schless said, adding that payments should have been addressed a long time ago. “It is not clear what recourse, if any, is available to secure these funds, but we will pursue this on behalf of those ASHA members who are still waiting to have their case resolved or are awaiting payment.”
The pandemic had a devastating effect on the healthcare system, particularly the 31,400 assisted living communities that faced “unprecedented challenges” in the form of staffing shortages, increased costs and decreased revenue, according to Argentum.
“The loss of these payments will likely lead to some providers closing their doors or reducing the number of services they offer,” Argentum Senior Vice President of Public Affairs Maggie Elehwany told McKnight’s Senior Living. “This is a disservice to assisted living communities and the seniors they care for.”
Assisted living communities care for a vulnerable population, a spokeswoman for the National Center for Assisted Living told McKnight’s Senior Living, but many providers still are struggling to recover.
“We are pleased that a debt ceiling compromise was achieved, but it’s unfortunate that clawing back unspent COVID-19 relief funds for providers was part of the price,” the spokeswoman said. “We hope that Congress and the administration will prioritize and invest in our long-term care system moving forward.”
PRF intended to help providers respond to COVID-19
Although funding officially has ended, reporting requirements remain. Providers still can use PRF for expenses incurred to prevent, prepare for and respond to COVID-19 even beyond the end of the public health emergency on May 11.
Fallon said that expenses incurred post-PHE likely will be highly scrutinized. Although COVID-19 tests and supplies should continue to be covered, it remains unclear how staff bonuses or other incentives might be viewed. And providers with reports showing that they did not spend their entire allocation of PRF or ARP funds will be required to return any unused dollars to the HRSA.
The PRF was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help providers prevent, prepare for and respond to the pandemic. Since March 2020, Congress has allocated $178 billion to the fund.
Assisted living first was recognized during Phase 2 distributions, with Phase 3 distributions covering pandemic expenses from the first half of 2020. Phase 4 distributions were not released until September 2021, when $17 billion was allocated after congressional and healthcare industry pressure following COVID-19 case surges.
In addition to being left out of initial federal relief efforts, Elehwany said, state relief and resources for assisted living caregivers throughout the pandemic were “woefully inadequate.”
“While senior living providers incurred more than $30 billion in COVID-related losses, they received one-twelfth of the federal relief appropriated for skilled nursing facilities despite caring for roughly the same number of people,” Elehwany said. “The sustained losses and slow or nonexistent federal relief, coupled with increasing strain on the workforce, have left the majority of senior living providers operating at a financial loss, reducing new admissions and relying on overtime shifts and pricey agency hires to maintain operations.”
