Earlier this year, the Wolf Administration outlined how the $225 million American Rescue Plan Act 2 of 2022 (Act 2 of 2022) would be appropriated for the state of Pennsylvania, and payment notifications were sent to facilities in mid-March. As the PA Department of Human Services Acting Secretary Meg Snead stated,
“This funding will allow health care centers and individuals to start to rebuild from the ongoing financial effects of the pandemic and recruit and retain staff who are vital to keeping our communities healthy and safe.”
Given that the reporting deadline for this funding approaches next month, below is a summary of Act 2 of 2022.
Purpose and Criteria of Funding
$210 million of this funding was provided to eligible hospitals and behavioral health providers to support healthcare workforce needs. Eligible hospitals and behavioral health providers consist of the following: acute care hospitals, critical access hospitals, children’s hospitals, high-Medical Assistance (MA) hospitals, and behavioral health providers based on license bed capacity.
The funding can only be used on recruitment, including sign-on bonuses and retention payments to qualified staff. The funding must be used within 90 calendar days from receipt of funds if it is being used for retention payments or 180 calendar days from receipt of funds if being used for recruitment payments. Funding may not be used for reimbursement payments made prior to January 26, 2022.
The eligible hospitals and behavioral health providers are responsible for determining which qualified staff will receive payment and how much of the funding will be allocated to each qualified staff. It is also worth noting that providers will need to report to the Department of Human Services (DHS) the criteria used for determining these payments.
These funds are not to be used to cover administrative expenses, such as payment processing fees, or to replace existing staff wages, unqualified staff such as behavioral health executives, hospital executives, contracted staff, administrators and administrative support staff, or physicians. Please note that regular payroll taxes must be paid on these payments.
If an entity used the funding for staff retention payments, a report must be submitted to DHS by September 30, 2022. If an entity used the funding for staff recruitment payments, a report must be submitted to DHS by December 31, 2022. Template reports can be found on the DHS website.
The determination of whether or not this constitutes federal funding depends on whether the entity who received the funds has a subrecipient or contractor relationship with DHS. If the entity has a subrecipient relationship, the payments would be classified as federal funds. If the entity expended more than $750,000 of total federal funding within the given year, a single audit would be required, and this particular funding would fall under CFDA 21.027 American Rescue Plan Act. If the entity has a contractor relationship with DHS, then these funds would not be classified as federal funding and would not trigger the need for a single audit.
If you have questions about the information outlined above, McKonly & Asbury’s experienced professionals are here to help. Learn more about McKonly & Asbury’s Healthcare Practice by visiting our website or by contacting the Healthcare Practice Director, Janice Snyder, Partner.