HHS begins distributing targeted funding to hot spots and rural hospitals

The Department of Health and Human Services has begun distributing additional billions from the Coronavirus Aid, Relief and Economic Security Act to hospitals in COVID-19 hot spots and to rural providers.

Recognizing that inpatient admissions are a primary driver of costs to hospitals related to COVID-19, HHS is distributing $12 billion to 395 hospitals that provided inpatient care for 100 or more

COVID-19 patients through April 10. Of this, $2 billion will be distributed to these hospitals based on their Medicare and Medicaid disproportionate share and uncompensated care payments

The hospitals will begin receiving funds via direct deposit in these states the coming days.

Rural hospitals, many of which were operating on thin margins prior to COVID-19, will get $10 billion.

Hospitals and rural health clinics will each receive a minimum base payment plus a percent of their annual expenses. This expense-based method accounts for operating cost and lost revenue incurred by rural hospitals for both inpatient and outpatient services.

All clinical, non-hospital sites receive a minimum level of support of no less than $100,000, with additional payment based on operating expenses. Rural acute care general hospitals and critical access hospitals will receive a minimum level of support of no less than $1,000,000, with additional payment based on operating expenses.

Eligible providers in these states will begin receiving funds in the coming days via direct deposit.

WHY THIS MATTERS

These 395 hot spot hospitals accounted for 71% of COVID-19 inpatient admissions reported to HHS from nearly 6,000 hospitals around the country, HHS said.

The distribution uses a simple formula to determine what each hospital receives: Hospitals are paid a fixed amount per COVID-19 inpatient admission, with an additional amount taking into account their Medicare and Medicaid disproportionate share and uncompensated care payments.

The American Hospital Association said it was pleased by the distribution of additional funds to hospitals with high numbers of COVID-19 admissions and to rural areas, but it urged emergency funding to be sent as soon as possible to hospitals and health systems on the front lines.

The AHA and the American Nurses Association have asked Congress for more funding.    

Congress recently approved another $75 billion for hospitals to meet expenses and cover losses due to COVID-19.

THE LARGER TREND

In late April, HHS announced another $10 billion in funding for targeted relief for hot spots, such as New York City, and an additional $10 billion for rural hospitals.

Hospitals across the board received another $20 billion.

HHS  said it is working on additional targeted distributions to some providers including skilled nursing facilities, dentists, and providers that solely take Medicaid.

ON THE RECORD

"These new payments are being distributed to healthcare providers who have been hardest hit by the virus: $12 billion to facilities admitting large numbers of COVID-19 patients and $10 billion to providers in rural areas, who are already working on narrow margins," said HHS Secretary Alex Azar. "HHS has put these funds out as quickly as possible, after gathering data to ensure that they are going to the providers who need them the most. With another $75 billion recently appropriated by Congress, the Trump Administration will continue doing everything we can to support America's heroic healthcare providers on the frontlines of this war on the virus."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com