02/16/2023

OBM guidance on HB45 funds poses significant state, federal restrictions

This week, LeadingAge Ohio met with the Office of Budget & Management (OBM) to learn about their proposed guidance for the distribution and use of the American Rescue Plan Act (ARPA) state and local funds appropriated in HB45 which are to be awarded to nursing facilities, assisted living, hospices and home and community based services. According to OBM, the guidance for ARPA state and local funds is narrow and only allows subrecipients (i.e., providers), to use the funds in specified ways. Furthermore, HB45 language specified that the funds were to be used for “workforce relief payments,” which restricts fund usage further. Finally, the funds will go out via grantmaking, which requires OBM to provide oversight, including audits. The information was shared via a draft guidance document for HB 45 Nursing Facility workforce relief, which also includes frequently asked questions.

Adult day services, which were appropriated $8 million in ARPA funding, are not subject to the same restrictions since those funds were via a different ARPA funding pool designated for home- and community-based services.

According to OBM, they were able to identify just two categories of approved funding uses that would fit the criteria of “workforce relief payments.” These are:

• Premium pay for essential workers, and
• Worker pay that would address the economic impact of COVID mitigation. Examples of this would be pay for workers who are on a COVID unit, or if an organization can directly attribute a portion of a person’s salary to time spent addressing the COVID pandemic.

Additionally, all funds must be paid for expenses incurred during the Public Health Emergency (PHE), further limiting the window of time that providers have to expend funds. The PHE is set to end on May 11 of this year. While premium pay is explicitly permitted to be issued retrospectively (i.e., for time already worked), OBM interprets the second category as limited to prospective expenses only.

Premium pay has very clear guidance and criteria, including that it should primarily be focused on low-income workers, defined as those at or below their state or county’s average annual wage for all occupations, as defined by the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics, whichever is higher, on an annual basis; or those that are not exempt from the Fair Labor Standards Act overtime provisions. OBM shared in guidance that Ohio’s average annual wage is $53,170 annually and 150% of that wage is $79,755, but that workers who meet neither of these categories may receive premium pay if the organization provides written justification with their reporting.

The U.S. Treasury Final Rule for premium pay includes the following guidelines:

• Premium pay may be awarded to eligible workers up to $13.00 per hour.
• Premium pay must be in addition to wages or remuneration (i.e., compensation) the eligible worker otherwise receives.
• Premium pay may not exceed $25,000 for any single worker during the program.
• Premium pay may be awarded in installments or lump sums (e.g., monthly, quarterly, etc.) and may be awarded to hourly, part-time, or salaried or non-hourly workers.
• Premium pay must be paid in addition to wages already received and may be paid retrospectively. However, a subrecipient may not use funds to reimburse itself for premium pay or hazard pay already received by the worker, and premium pay may not be paid to volunteers.

In addition to the restriction outlined above the following guidelines were also outlined by OBM:

• Payments may not cover costs already reimbursed by another source such as Medicaid managed care organization contracts or general Medicaid rates. The funds can not be spent on other needs that do not meet the criteria of premium pay. Premium pay must be entirely additive to a worker’s regular rate of wages and other remuneration and may not be used to reduce or substitute for a worker’s normal earnings. Funds may not be used to reimburse premium pay or hazard pay already provided to an employee prior to this award. Premium pay is limited to $13.00 per hour in addition to wages or remuneration the worker otherwise receives and in an aggregate amount not to exceed $25,000 per eligible worker.

Finally, not-for-profit organizations that are awarded $750,000 or greater via the grants will be required to engage an auditor independently, per federal rules. OBM has identified 69 organizations statewide that fall into this category, and LeadingAge Ohio will reach out to each of its members individually that may anticipate this audit requirement.

The guidance document is a stark contrast to the intent of the legislature to provide immediate assistance to a sector still reeling from the impacts of COVID, wage inflation and rising non-wage costs. LeadingAge Ohio is working on an immediate legislative strategy that will loosen restrictions on the funding, allowing providers to more flexibly use funds for non-workforce COVID-related expenses. The ARPA guidance is far more restrictive than originally anticipated, either by associations or by the legislature, and we will work to remove any state-imposed barriers to funding.

Meanwhile, OBM is working to stand-up the grants portal, planning a training webinar for providers as early as next week that will cover application process, reporting requirements and other guidance for use of the funds. The application process is anticipated to be relatively simple, with the provider submitting identifiers including Medicare ID, NPI, TIN and answering a small number of questions projecting how funds will be used. Providers will be receive funds via EFT within 15 days of the application’s approval. Furthermore, as in the past, LeadingAge Ohio will be working to support members in troubleshooting applications issues.

Questions regarding this development may be directed to Susan Wallace at swallace@leadingageohio.org.