Congress has allocated $175 billion to help providers respond to the COVID-19 crisis, but HHS has been hit with multiple complaints about distribution as that money goes out the door.
The COVID-19 pandemic created massive upheaval for the nation’s healthcare system still evident six months after the U.S. declared it a national public health crisis.
The virus continues to surge, reaching new heights with more than 4 million confirmed cases and more than 143,000 deaths. No other country has experienced more deaths or cases than the U.S., data with Johns Hopkins Coronavirus Research Center show.
Parts of the country are facing the prospect of another lockdown as cases overwhelm healthcare facilities.
Forced into quickly responding to the pandemic, health systems have taken substantial financial hits. While the impact has been far from even, one estimate from the American Hospital Association estimates the nation’s health systems’ financial losses in the first four months of the outbreak reached nearly $203 billion.
To help staunch the free fall, Congress earmarked $175 billion in two pieces of legislation in an attempt to keep providers afloat as the virus wreaked havoc on the economy. The majority of that was from the Coronavirus Aid, Relief, and Economic Security Act passed in late March.
Yet, about 65% of the money has yet to go out to providers, with just $61 billion delivered and attested to by providers by mid-July, a senior HHS official told Healthcare Dive.
Still, with no end in sight for the pandemic, at least on U.S. shores, providers are ramping up lobbying in an effort to secure more funding as case counts soar. AHA is asking for another $100 billion in the next round of congressional relief now under discussion.
Many healthcare providers stopped profitable elective procedures as stay-at-home orders blanketed parts of the country to contain the spread of the disease. This also allowed providers to conserve much needed resources such as personal protective equipment that proved hard to procure amid the crisis.
But revenue quickly plummeted as providers delayed care in preparing for a surge of COVID-19 patients.
“The funding hospitals and health systems have received to date, while helpful, is just a small fraction of what we estimate they will lose this year,” Lisa Kidder Hrobsky, group vice president of federal relations for AHA, told Healthcare Dive in a statement.
Where did the money go?
So far, HHS has outlined a spending plan for $125 billion of the $175 billion in provider relief funds.
The program has been met with an array of criticism, including whether the distribution of funds went to those most in need and whether the fine print has deterred providers from taking a piece of the massive financial package.
In response to those critiques, HHS has sent out additional federal funding in more targeted waves since April.
The first tranche of money — $30 billion in April — was designed to get out the door quickly, as providers were struggling. From there, HHS has attempted to pinpoint the money to certain providers and geographic areas to appease the needs of various providers.
To even out distribution, HHS began sending targeted funding, such as to hospitals overrun with COVID-19 patients, mainly in New York and other hard hit areas. The agency also funneled money to rural providers and skilled-nursing facilities, among others.
After HHS was met with the argument that wealthier hospitals, or those that had larger shares of privately-insured patients, received more funding, it allocated money for those taking care of the neediest.
At the same time, as the agency doles out the rest of the $175 billion, it has promised to reimburse providers for uninsured COVID-19 patients. That has raised questions about whether HHS will have enough for uninsured care and additional tranches.
However, a senior HHS official said it has only paid out $340 million to providers for uninsured COVID-19 patients, less than what they had expected. So low, that HHS has been trying to encourage providers to apply for such funding.
Timeline of HHS funding
- AprilHHS released $30 billion from the first tranche of money based on a provider’s 2018 Medicare fee-for-service revenue. By the end of April, an additional $20 billion from general distribution was released, for a total of $50 billion.
- MayMore than $26 billion was sent to rural, skilled-nursing facilities and those hit hard by the virus.
- JuneHHS released an additional $25 billion earmarked for safety-net providers and those that cater to large populations of Medicaid patients.
- JulyHHS said it would release another $4 billion for safety-net providers and certain specialty rural providers missed in earlier rounds, along with another $10 billion for those in hot spots.
Fears eased over fine print
Some providers declined or returned funding they had received, worried about the fine print or the terms and conditions, like how to appropriately spend the money.
However, HHS has relaxed some of those conditions, easing the fears of some.
For a lot of providers, it was a sigh of relief, causing many to say, “‘Great, we can feel comfortable participating in this program’,” Tim Fry, an attorney with McGuireWoods, told Healthcare Dive.
In particular, HHS recently said that if at the end of this pandemic, providers didn’t use all of the funding for lost revenue or healthcare related expenses, there will be a process to return the money. Initially, providers expressed concern that it was an all-or-nothing program.
Plus, HHS provided clarity on how the money can be used, stipulating that the funds go to healthcare-related expenses or lost revenue attributable to the coronavirus. HHS has provided more guidance and examples of appropriate uses, a relief to many, Fry said.
Earlier, health systems were overwhelmed by the administrative burden and fearful over how to appropriately spend the money without running afoul of new rules.
“We are not infinitely flexible around those requirements, but when we hear from providers of issues that they’re having — and we think we can be reasonably [accommodating], we try to be,” a senior HHS official said.