Rural Healthcare Providers Get $7.5B in COVID-19 Relief Funds

The Bident Administration has announced $7.5 billion in COVID-19 relief funds from the American Rescue Plan for rural healthcare providers who treat Medicaid, Children’s Health Insurance Program (CHIP), and Medicare beneficiaries.

According to the announcement, the funding will go to over 40,000 rural providers across the country, as well as the US’ six territories. The average payment amount is about $170,700, but some rural providers will get as much as $43 million.

“[Healthcare] providers in rural communities have been hit hard by the COVID-19 pandemic, and they continue to experience significant financial hardships,” HHS Secretary Xavier Becerra, said in the announcement. “The infusion of these funds will be critical to ensuring rural communities maintain access to high-quality health care and addressing urgent needs like workforce recruitment and retention.”

Lawmakers earmarked COVID-19 relief funds for rural healthcare providers as part of the American Rescue Plan to provide “much-needed relief” to these providers who have historically operated under thin margins. Nearly half (47 percent) of rural providers were operating in the red prior to the COVID-19 pandemic, research cited by HHS showed.

The COVID-19 pandemic has exacerbated financial challenges, particularly for rural healthcare providers, the federal department continued. A study published by the Center for Healthcare Quality and Payment Reform (CHQPR) earlier this year found that 800 rural hospitals, or 40 percent of all rural hospitals in the US, are at high risk or immediate risk of closing. That is 300 more hospitals compared to the pre-pandemic era.

Rural healthcare providers applied for COVID-19 relief funds from the American Rescue Plan from late September to Nov. 3, 2021. HHS, through the Health Resources and Services Administration (HRSA), received more than 55,000 applications.

HHS said the funding is based on Medicaid, CHIP, and Medicare claims for services between Jan. 1, 2019, through Sept. 30, 2020, since this period “represents the most comprehensive data available to HHS and takes into account both pre-pandemic and pandemic operations.” The department also used Medicare reimbursement rates to calculate funding awards regardless of a patient’s insurance type.

“This funding will help health care providers keep their doors open, address workforce challenges, and make up for the lost revenues and increased expenses caused by the pandemic,” HHS stated in the announcement. “Specifically, providers can use these funds for salaries, recruitment, or retention; supplies such as N95 or surgical masks; equipment like ventilators or improved filtration systems; capital investments; information technology; and other expenses related to prevent, prepare for, or respond to COVID-19.”

In addition to COVID-19 relief funds, the Biden Administration also announced healthcare workforce awards for rural and underserved communities. The Administration has awarded $1.5 billion, including $1 billion in supplemental American Rescue Plan funding and other mandatory and annual appropriations, to loan repayment and scholarship programs. It is the largest field strength in history for these type of awards, HHS stated.

The awards will go to National Health Service Corps (NHSC) members. Specifically, the American Rescue Plan supplemental funding was given to nearly 1,200 scholarships in the NHSC. The awards allowed NHSC to nearly double the number of Nurse Corps scholarship awards to 544.

Rural providers are still eligible for additional funding through the Provider Relief Fund’s fourth general distribution. HHS has allocated $17 billion to the distribution, which providers had applied for when requesting American Rescue Plan rural payments.

HHS said it will announce Provider Relief Fund payments in the coming weeks, as well as continue to process applications for American Rescue Plan rural payments.