House Oversight Panel Investigates COVID-19 Relief Allocation

House Committee on Oversight and Accountability Chairman James Comer (R-KY) and Representative Nick Langworthy (R-NY) recently launched an investigation into how HHS allocated COVID-19 relief funds to hospitals. The lawmakers say the department funneled billions of taxpayer dollars to highly profitable hospitals while rural hospitals battled bankruptcy.

The Committee has requested all documents and communications related to HHS’ decision-making process regarding which hospitals and providers received COVID-19 relief funds, according to an April 11th letter to HHS Secretary Xavier Beccera.

“Instead of helping hospitals most in need, nearly $17 billion of COVID-19 relief funds went to hospitals with reported profits of more than $53 billion, while $35 billion went to hospitals that reported a loss of almost $130 billion,” the letter stated, citing research from the Wall Street Journal. “It is crucial that we understand how the Department of Health and Human Services (HHS) distributed these funds to hospitals that did not need it while hospitals in need received minimal benefit.”

Congress appropriated $178 billion in COVID-19 relief funds to providers through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection and Health Care Enhancement Act, and the Consolidated Appropriations Act of 2021.

Comer and Langworthy said in the letter that 1,257 “money-making” hospitals received $16.7 billion of those funds while reporting $53.6 billion in profits in aggregate. Meanwhile, 1,644 unprofitable hospitals received only $35 billion from this Provider Relief Fund (PRF), even though they reported a collective loss of $129.1 billion.

The lawmakers also called out hospitals that received substantial help from the PRF and still eliminated jobs despite reporting a profit in 2020 and 2021.

A 2021 Health Affairs study found that the primary distribution method for the PRF may have put some hospitals and communities at a disadvantage, with hospitals serving a very high share of Hispanic residents or those in a medically underserved area receiving decreased funding.

“Lacking a broader array of measures to guide allocation decisions, hospitals serving vulnerable populations might not have received support commensurate with need,” researchers from Harvard University stated in the study.

HHS used a revenue-based allocation model to distribute PRF funds at first and later switched to more targeted allocation methods. The revenue-based method, however, relied on Medicare administrative data to determine a hospital’s eligibility for PRF assistance.

Comer and Langworthy called for a list of all hospitals and other healthcare providers that received PRF funds and how much they received. They also requested HHS send over all documents and communications related to providers that received PRF funds and laid off staff during the pandemic, as well as how many claims related to medical debt they made against patients.

Additionally, HHS is to send the Committee any documents and communications it had with the White House regarding the PRF and related to the recoupment of PRF money from healthcare providers who were not qualified to receive the financial assistance.

The Committee on Oversight and Accountability has broad authority to investigate the matter of COVID-19 relief fund misallocation under House Rule X, the letter added.