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Senate Passes Paycheck Protection Program and Health Care Enhancement Act

On April 21, 2020, the Senate passed in a pro forma session an “interim” coronavirus relief bill, titled the “Paycheck Protection Program and Health Care Enhancement Act” (the Senate Bill). The Senate Bill would amend the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), enacted March 27, 2020, to (i) increase the amounts authorized for the Paycheck Protection Program (PPP) in accordance with Section 7(a) of the Small Business Act, the economic injury disaster loans, and emergency grants under the CARES Act, and (ii) authorize additional funding for hospital and provider recovery and coronavirus testing. Notwithstanding complaints that have been lodged by various constituencies about the structure, administration, and fairness of the PPP that was implemented by the CARES Act, the new legislation would not modify the PPP’s lending program, choosing instead to appropriate additional funding so that more small businesses are covered. The following is a summary of the key provisions of the Senate Bill.

Increased Funding for SBA PPP and Emergency Loans

The Senate Bill authorizes the following additional funding:

  • $310 billion for the PPP ($349 billion was authorized initially under the CARES Act)

  • $10 billion for Emergency Economic Injury Disaster Loans (EIDL) Grants ($10 billion was authorized initially under the CARES Act)

  • $50 billion for the Disaster Loan Program

Sixty billion dollars of the additional funding appropriated for the PPP is set aside for loans made by smaller insured depository institutions and credit unions.

Increased Emergency Funding for Hospitals and Other Providers

The Senate Bill appropriates an additional $75 billion ($100 billion was appropriated initially in the CARES Act) for the Public Health and Social Services Emergency Fund of the Department of Health and Human Services (the Relief Fund) for reimbursement to eligible health care providers for health care-related expenses or lost revenues that are attributable to the coronavirus. The Senate Bill does not change or further define the terms of the appropriation as provided initially in the CARES Act — specifically:

  • The definition of “eligible health care providers” is the same as in the CARES Act: public entities, Medicare- or Medicaid-enrolled suppliers and providers, and other for-profit and nonprofit entities that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.

  • These funds cannot be used to reimburse expenses or losses that have been or will be reimbursed from other sources.

  • The Act gives the Secretary of the Department of Health and Human Services broad discretion in reviewing applications from providers (on a rolling basis) to determine which providers will receive payments from the Relief Fund. In that regard, although much preliminary congressional discussion suggested that the Act would specifically focus on providing additional funding to hospitals, the language of the Act, like the original CARES Act language, does not establish priorities among different categories of eligible health care providers with respect to this portion of the Relief Fund appropriation.

Increased Funding for Coronavirus Testing

The Senate Bill also appropriates $25 billion to the Relief Fund for necessary expenses to research, develop, validate, manufacture, purchase, administer, and expand capacity for COVID-19 tests.

  • The funding can be used for tests for both active infections and prior exposure, as well as for the manufacturing, procurement, and distribution of tests, testing equipment, and testing supplies (including personal protective equipment needed for administering tests).

  • Unlike the $75 billion funding described above, this funding includes specific allocations to states and various governmental agencies (such as the Centers for Disease Control and Prevention, the National Institutes of Health, and the Food and Drug Administration, as well as tribal health organizations) to support activities necessary to accelerate the research, development, manufacturing, and production of COVID-19 tests.

A link to what we understand to be the final text of the Senate Bill is below. This text may change once the House takes the Senate Bill up later this week.

The House is expected to vote on the Senate Bill on Thursday. We anticipate that if it is approved by the House, it will be approved by the White House on an expedited basis. 

© 2020 Jones Walker LLP

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Curtis R. Hearn Securities Attorney Jones Walker Law Firm
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Curt Hearn is the practice group leader of the Corporate & Securities Practice Group. He handles mergers, acquisitions, and divestitures, as well as capital raising transactions for a variety of publicly traded and privately held companies. Mr. Hearn represents private equity and venture capital firms, and focuses his practice on companies in the energy, energy service, healthcare, transportation, logistics, and manufacturing sectors. 

Mr. Hearn has more than twenty years of experience representing large bank holding companies in Louisiana....

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William W. Horton Corporate and Healthcare Industry Attorney Jones Walker
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Bill Horton is a partner in the Corporate Practice Group and co-chairs the firm’s Healthcare Industry Team. He represents healthcare clients around the country on major transactions, compliance, and governance issues.


Bill maintains a national practice representing healthcare providers and other business enterprises in mergers, acquisitions, and joint ventures, securities and corporate finance law, regulatory compliance, and corporate governance matters. Prior to joining Jones Walker, Bill was a practice group leader at two other Birmingham-based law firms and served as general counsel of one of the nation’s largest publicly traded healthcare providers. He currently serves as head of the firm's Birmingham office.

Drawing on his substantial experience in private practice and as senior legal officer for a large public company, Bill has been involved in complex corporate finance and acquisition transactions in almost all sectors of the healthcare services industry. His background includes representation of issuers in securities offerings and periodic reporting, representation of borrowers in complex financing transactions, counseling healthcare providers on regulatory compliance, and representation of healthcare enterprises, financial services businesses, and other business clients in corporate governance matters, acquisition and divestiture transactions, joint ventures, venture investments, and other business transactions.

Bill has extensive experience in government and internal investigations. In addition, Bill is a certified mediator for the American Health Lawyers Association Dispute Resolution Service and regularly serves as a hearing officer for medical staff peer review hearings.

A nationally recognized speaker and author on healthcare, corporate and securities law, and professional responsibility topics, Bill also has held leadership positions for several years with the American Bar Association and the American Health Lawyers Association, serving in 2015 to 2016 as chair of the ABA Health Law Section. In 2016, he was honored by the AHLA Fraud and Abuse Practice Group with the Patricia Meador Leadership Award.  

In addition to his private practice, Bill serves as an adjunct professor at the University of Alabama School of Law and as a clinical associate professor at the School of Optometry at the University of Alabama at Birmingham. He also serves as a faculty panelist for George Washington University's Graduate Certificate in Healthcare Corporate Compliance Program, a position he has held since the program’s inception in 2005, and as Editor-in-Chief of two major healthcare law publications. He is the founding president of the National Board of Health Lawyers, a specialty certification organization.

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