The American Recovery and Reinvestment Act of 2009 (the "Act" or "ARRA") was passed by Congress on Feb. 13, 2009. Yesterday, Feb. 17, 2009, President Obama signed the Act into law. The ARRA includes a number of health care provisions, several of which are summarized in the link below. For a broader overview of the ARRA, please click here.

  • The ARRA provides a total of $2.5 billion for health resources services. Of this amount, $500 million is for grants to community health centers; $1.5 billion is for grants to community health centers to be used exclusively for construction, renovation, and equipment, and for the acquisition of health information technology systems; and $500 million is to address health professions workforce shortages by providing scholarships, loan repayments and grants to training programs.
  • The ARRA allocates a total of $10 billion for the National Institutes of Health ("NIH"). $1.3 billion of this amount is for the National Center for Research Resources to construct, renovate or repair existing non-Federal research facilities; $8.2 billion is to be used to support additional scientific research; and $500 million is to be used to fund high-priority NIH repair, construction and improvement projects.
  • The ARRA allocates $1.1 billion for comparative effectiveness research: $300 million for the Agency for Healthcare Research and Quality; $400 million for the NIH; and $400 million for the U.S. Department of Health and Human Services ("HHS"). The funds allocated to HHS must be used to accelerate the development and dissemination of research assessing the comparative effectiveness of health care treatments and strategies through efforts that (1) conduct, support or synthesize research that compares the clinical outcomes, effectiveness and appropriateness of items services, and procedures that are used to prevent, diagnose or treat diseases, disorders and other health conditions; and (2) encourage the development and use of clinical registries, clinical data networks and other forms of electronic health data that can be used to generate or obtain outcomes data. Under this provision, HHS also has the authority to make grants and contracts with, among others, private sector entities that have demonstrated experience with and capacity to achieve the goals of comparative effectiveness research. HHS must publish information on these grants and contracts and disseminate research findings from such grants and contracts to clinicians, patients and the general public, as appropriate. The Act also establishes a Federal Coordinating Council for Comparative Effectiveness Research to foster optimum coordination of comparative effectiveness and related health services research conducted or supported by relevant Federal departments and agencies, with the goal of reducing duplicative efforts and encouraging coordinated and complementary use of resources.
  • The ARRA includes $1 billion for a Prevention and Wellness Fund, administered by HHS, to carry out the immunization program and the evidence-based clinical and community-based prevention and wellness strategies authorized by the Public Health Services Act.
  • The ARRA includes $150 million for grants to assist states in acquiring and constructing state nursing homes and domiciliary facilities, and to remodel, modify or alter existing hospital, nursing home and domiciliary facilities in state homes.
  • The ARRA allocates $2 billion for the Office of the National Coordinator for Health Information Technology ("ONCHIT") to carry out health information technology activities addressed in the Health Information Technology for Economic and Clinical Health Act ("HITECH Act"), created by the ARRA. The HITECH Act is intended to assist in the development of a nationwide health information technology infrastructure that allows for the electronic use and exchange of information. The HITECH Act provides for the appointment of a Chief Privacy Officer, responsible for privacy, security and data stewardship of electronic health information, the establishment of a HIT Policy Committee to make policy recommendations relating to the implementation of a nationwide health information technology infrastructure, and a HIT Standards Committee to recommend standards, implementation specifications and certification criteria for the electronic exchange and use of health information. Under the HITECH Act, contracts or agreements with health care providers, health plans or health insurance issuers must include a requirement that as each provider, plan or issuer implements, acquires or upgrades health information technology systems, it shall utilize, where available, health information technology systems and approved products. The HITECH Act also authorizes various grants, including, among others, grants to states for the expansion of the electronic movement and use of health information, and grants to institutions of higher education to establish or expand medical health informatics education programs.
  • The HITECH Act includes several amendments to HIPAA's privacy and security provisions. For example, the Act extends certain HIPAA provisions and penalties to business associates of covered entities. The Act also includes various security breach notification requirements, such as a requirement that if the unsecured protected health information of more than 500 residents of a State or jurisdiction is, or is reasonably believed to have been, accessed, acquired or disclosed during a breach, the covered entity must provide notice of such breach to prominent media outlets serving the State or jurisdiction. Other provisions of the Act address the minimum necessary standard, accounting for disclosures, the sale of protected health information, marketing, fundraising, electronic health records, personal health records and HIPAA enforcement. (A Sonnenschein client alert will be published later this week further discussing the privacy provisions included in the ARRA.)
  • The ARRA delays for one year, until Dec. 31, 2011, implementation of the 3 percent tax withholding on government contractors (including Medicare providers).
  • The ARRA makes available a 65 percent COBRA premium subsidy that is available for nine months for workers who became (or become) unemployed between Sept. 1, 2008 and Dec. 31, 2009.
  • The ARRA provides $19 billion in incentives for the "meaningful use" of certified electronic health records ("EHR") technology, utilizing both bonuses and penalties. In the initial years of the program, physicians (excluding hospital-based professionals), hospitals (including Critical Access Hospitals) and staff-model Medicare Advantage HMOs are eligible for annual bonuses. However, in 2015 and subsequent years, providers who are not meaningful EHR users will begin receiving reduced Medicare payments, and this reduction will increase annually. The ARRA also includes incentive payments to Medicaid providers to encourage the adoption and use of certified EHR technology.
  • The ARRA prevents the Secretary of HHS from phasing out or eliminating the budget neutrality adjustment factor in the Medicare hospice wage index before Oct. 1, 2009. Rather, the Secretary must apply the final Medicare hospice wage index for fiscal year 2009 as if there had been no reduction in the budget neutrality adjustment factor. The ARRA also delays, by one year, the phase-out of capital indirect medical education ("IME") payments.
  • To protect and maintain State Medicaid programs during the nation's economic downturn, the ARRA provides for a temporary increase of 6.2 percent in the Federal Medicaid matching payments ("FMAP"), with additional increases for states with high unemployment rates.
  • The ARRA provides for a temporary increase in Medicaid disproportionate share ("DSH") allotments for fiscal years 2009 and 2010.
  • The ARRA does not include certain amendments proposed by Sen. Charles Grassley related to the amount of free or reduced-cost care that nonprofit hospitals provide. In particular, the amendments would have required (1) the IRS to study the amount of uncompensated care provided by for-profit hospitals and (2) the Centers for Medicare & Medicaid Services to coordinate with the IRS and MedPAC to develop a single, uniform definition of uncompensated care and charity care.

As illustrated above, the ARRA includes a number of significant health care provisions, many of which are broad and include ambiguities that will need to be resolved by HHS in the near term.