the American Association of Colleges of Osteopathic Medicine

The following memorandum is a title-by-title summary and analysis of provisions in P.L. 117–2, The American Rescue Plan Act of 2021 (ARP), relevant to the American Association of Colleges of Osteopathic Medicine (AACOM) and the osteopathic medical education (OME) community, generally. This summary was prepared by Venable, LLP, on behalf of AACOM.

Title I—Committee on Agriculture, Nutrition, and Forestry

Rural Health Care

Section 1002 of the ARP provides $500 million to the Secretary of Agriculture to establish an emergency pilot program for rural development by August 8, 2021 (i.e., 150 days after the enactment of the ARP). The program will make grants to public bodies (such as a municipality, county, district, authority, or other political subdivision of a state), nonprofits with ties to local rural communities, and federally recognized Indian tribes in rural areas.

Grant recipients may use the funds to increase capacity for vaccine distribution; provide medical supplies to increase medical surge capacity; reimburse for revenue lost during the COVID-19 pandemic, including revenue lost prior to the grant award; increase telehealth capabilities, including underlying health care information systems; construct temporary or permanent structures to provide health care services, including vaccine administration or testing; support staffing needs for vaccine administration or testing; and engage in any other efforts to support rural development critical to address the COVID-19 pandemic, including nutritional assistance to vulnerable individuals.

Title II—Committee on Health, Education, Labor, and Pensions

Vaccines

Section 2301 provides $7.5 billion to the Secretary of Health and Human Services (HHS) for activities to plan, prepare for, distribute, administer, monitor, and track COVID-19 vaccines, especially in communities of color and hard-to-reach areas. Specifically, the HHS Secretary, acting through the Director of the Center for Disease Control and Prevention (CDC), may use these funds to conduct activities to (i) enhance, expand, and improve nationwide COVID-19 vaccine distribution and administration, including activities related to distribution of ancillary medical products and vaccine supplies, and (ii) provide technical assistance, guidance, and support to, and award grants or cooperative agreements to, state, local, tribal, and territorial health departments to improve vaccine distribution and administrative capabilities, including establishment, expansion, and staffing of vaccination centers, deployment of mobile vaccination units in underserved communities, and transportation of individuals to facilitate vaccinations of underserved populations.

The ARP also provides $1 billion for activities to strengthen vaccine confidence and provide vaccine education, $6.1 billion for expenses related to research, development, manufacturing, production, and purchase of vaccines, therapeutics, and ancillary medical products; and $500 million for the evaluation of performance, safety, and effectiveness of vaccines against emerging COVID-19 variants.

Testing

Section 2401 provides $47.8 billion to the HHS Secretary for activities to detect, diagnose, trace, and monitor COVID-19 infections and related strategies to mitigate the spread of COVID-19, including implementing a national strategy for testing, contact tracing, surveillance, and mitigation; providing technical assistance to state, local, and territorial health departments; and supporting the development, manufacturing, procurement, distribution, and administration of COVID-19 tests.

The ARP appropriates an additional $1.75 billion to strengthen and expand activities and workforce related to genomic sequencing, analytics, and disease surveillance, and $500 million for a disease warning system to forecast and track hotspots for COVID-19, its variants, and other emerging biological threats.

Health Workforce

Section 2501 provides $7.7 billion for the HHS Secretary to make grants to state, local, and territorial public health departments to bolster the public health workforce and COVID-19 response. Grant recipients may use the funds for costs, including wages and benefits, related to recruiting, hiring, and training health workforce and personal protective equipment (PPE), data technology, and other necessary supplies.

Community Health Centers and Health Disparities

Section 2601 appropriates $7.6 billion for awarding grants and cooperative agreements to community health centers under the Public Health Service Act (“PHSA”). Grant recipients may use the funds to improve vaccine administration; improve COVID-19 testing; purchase equipment and supplies for mobile testing or vaccinations, establish, expand, and sustain health care workforce; enhance health care services and infrastructure; and conduct community outreach and education activities related to COVID-19.

The ARP provides an additional $800 million for the National Health Service Corps. It also includes $330 million for payments to the Teaching Health Center Graduate Medical Education Program for establishing new graduate medical residency training programs, increasing the per resident amount, making payments to qualified teaching health centers, making payments to expand existing graduate medical residency training programs, and granting funds to teaching health centers for establishing new accredited or expanded primary care residency programs.

Mental Health

Subtitle H provides $3.9 billion in additional funding for numerous mental health programs funded in the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA), including to support state and local community mental health services; prevention and treatment of substance abuse programs; substance use disorder training for health care professionals, paraprofessionals, and public safety officers; and education and awareness campaigns for encouraging healthy work conditions and use of mental health and substance use disorder services by health care professionals.

Higher Education

Section 2003 provides $39.6 billion to fund the Higher Education Emergency Relief Fund (HEERF), which provides grants to colleges and universities and their students. Grant allocations are primarily determined by the relative share of Pell Grant students enrolled at the institutions, the same formula that was in the CRRSAA. Nonprofit grant recipients must use at least half of grant awards for emergency financial aid grants to students to help them with college costs and basic needs like food, housing, and healthcare. Nonprofit institutions may use the other half to defray lost revenue and increased costs from declining enrollment, online learning, closures of revenue-producing services and facilities, and COVID-19 testing, vaccination, PPE, and classroom retrofits. For-profit institutions must use 100 percent of funds for emergency financial aid grants to students.

Approximately $198 million of the HEERF funds are reserved for the Supplemental Aid to Institution of Higher Education (SAIHE) Program, which provides grants to public and private nonprofit institutions that the Secretary of Education determines, after allocating other funds under HEERF, to have the greatest unmet needs related to COVID-19, including institutions with large populations of graduate students and institutions that did not otherwise receive an allocation under CRRSSA. For-profit institutions are not eligible for funding through the SAIHE program.

Additionally, section 2013 of the ARP tightens the 90-10 Rule, which prohibits for-profit colleges from getting more than 10 percent of their total revenue from federal funding. When implemented, military and veterans’ education benefits, like the GI Bill and Department of Defense Tuition Assistance, will count toward the 10 percent threshold. Rulemaking on the new 90-10 Rule will commence no earlier than October 2021 and implementation and penalties will begin in January 2023.

Title III—Committee on Banking, Housing, and Urban Affairs

Defense Production Act

Section 3101 appropriates $10 billion for the enhanced use of the Defense Production Act. These funds will be used for the purchase, production (including construction, repair, and retrofitting of government-owned or private facilities), or distribution of medical supplies and equipment (including durable medical equipment) related to COVID-19, including in vitro diagnostic products for the detection or diagnosis of COVID-19; face masks and PPE, including face shields, nitrile gloves, N-95 respirators, and other equipment needed to respond to the COVID-19 pandemic; and drugs, devices, and biological products for treating COVID-19, and any materials, equipment, facilities, and technology to produce such drugs, devices, and products.

Title IV —Committee on Homeland Security and Governmental Affairs

Disaster Relief Fund

Section 4005 of the ARP provides $50 billion for the Disaster Relief Fund (DRF) at the Federal Emergency Management Agency (FEMA). The DRF assists states, Tribal Nations, and territories, as well as individuals and qualifying private nonprofit organizations. To be eligible, a nonprofit organization must (i) have an determination letter from the Internal Revenue Service (IRS) granting federal tax exemption under section 501(c), (d), or (e) of the Internal Revenue Code or documentation from a state substantiating that the organization is a nonprofit entity organized or doing business under state law, and (ii) own or operate an eligible facility that provides an eligible service, including education, utilities, emergency, medical, custodial care, and other essential social services. This funding can be used for PPE, vaccine distribution, sanitization of schools, and health care overtime costs.

Title V—Committee on Small Business and Entrepreneurship

Expanded PPP Eligibility

Section 5001 expands Paycheck Protection Program (PPP) eligibility to include most types of nonprofits, including 501(c)(5) organizations but not 501(c)(4) organizations, and appropriates $7 billion for this expansion. In the CARES Act, Congress had initially limited PPP loan eligibility to 501(c)(3) and 501(c)(19) organizations, and, in the CRRSAA, Congress expanded eligibility to 501(c)(6) organizations, subject to limitations on lobbying activities.

In addition to expanding eligibility to new types of nonprofit entities, the ARP also expands eligibility to community locations of larger nonprofit organizations. Section 501(c)(3), (c)(6), and (c)(19) entities may qualify if the nonprofit organization employs no more than 500 employees per physical location of the organization (as opposed to 500 total employees across the entire organization). Additional covered nonprofit entities are eligible as long as they have no more than 300 employees per physical location and meet limitations on lobbying similar to those for 501(c)(6) organizations.

Entities, including newly eligible nonprofit organizations, are eligible for second draw PPP loans if they otherwise meet the requirements for a second draw loan—the entity experiences at least a 25 percent reduction in gross receipts having received and expended a first draw PPP loan and has no more than 300 employees.

The funds appropriated may remain available until all funding has been expended.

Title VI - Committee on Environment and Public Works

Economic Adjustment Assistance

Section 6001 provides the Economic Development Administration with $3 billion to remain available until September 30, 2022 to prevent, prepare for, and respond to the coronavirus and for necessary expenses for responding to economic injury due to the pandemic. Grants may be made to economic development districts, Indian tribes, states, cities or other political subdivisions of a state, institutions of higher education or consortium thereof, and public or private nonprofit organizations acting in corporation with state or local officials. Grants may be used for development of public facilities, public services, business development, planning, technical assistance, training, and other assistance to rebuild local economies and hard-hit industries.

Title IX – Committee on Finance

Health Care Support

The Act includes numerous investments to reduce health disparities, including an option for states to provide one-year of postpartum Medicaid coverage, support for state home-and community-based Medicaid services, and resources for COVID-19 response in nursing homes. The ARP also increases rebates that pharmaceutical companies owe to Medicaid programs, provides $8.5 billion for rural providers, and provides additional funding to safety net hospitals.

Paid Sick Leave Credit

The ARP provides an extension and expansion of the paid sick and FMLA leave tax credits created in the Families First Coronavirus Response Act (FFCRA). It provides payroll tax credits for employers who voluntarily provide paid leave through the end of September 2021. It also expands eligibility to state and local governments that provide this benefit.

Tax-Free Student Loan Discharges

Section 9675 makes debt forgiveness for student loan borrowers tax-free through the end of 2025. Previously, student loan borrowers enrolled in a federal income-driven repayment plan could have any remaining student loan balances forgiven after making 20 or 25 years of repayment, depending on the repayment plan. However, any such debt relief would be subject to taxation, partially eroding the benefits to borrowers. Only a narrow band of borrowers—those enrolled in the Public Service Loan Forgiveness program or determined to be permanently disabled—could receive tax-free debt forgiveness. Now, all student loan debt discharges occurring before January 1, 2026, regardless of the borrower's repayment plan or whether the loan is federal or private, will not be considered taxable income.

Title XI—Committee on Indian Affairs

Indian Health Service

Section 11001 appropriates roughly $6 billion to the Secretary of Health and Human Services, of which $2 billion is allocated for lost reimbursements pursuant to the Indian Health Care Improvement Act; $1.5 billion is allocated for necessary expenses to detect, diagnose, trace and monitor COVID-19 infections and for supplies to carry out such activities; and $240 million for necessary expenses to expand and sustain a public health workforce.

Please contact AACOM Government Relations at aacomgr@aacom.org with questions or for further information.

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