HHS Distributes $1.75B in Phase 4 COVID-19 Provider Relief Funds

Through the Health Resources and Services Administration (HRSA), HHS has released the fifth round of Phase 4 COVID-19 Provider Relief Funds, which includes $1.75 billion for healthcare providers that have been impacted by the COVID-19 pandemic.

Around 3,600 providers that experienced COVID-19-related revenue losses and expenses between July 1, 2020, and March 31, 2021, will receive funds from this round of payments.

California, Texas, and New York are set to receive the highest amount of funds for their healthcare providers, according to a state-by-state breakdown. Over 600 providers in California will gain nearly $300 million, 333 providers in Texas will collect $154 million, and 313 New York providers will receive $127 million.

HHS will distribute $49 million to 234 providers in Florida and $50 million to 156 providers in Illinois.

With this fifth batch of funding, HHS has delivered a total of $13.4 billion in Phase 4 Provider Relief Funds to more than 85,000 healthcare providers across the country. California has collected the most in Provider Relief Funds, with almost 12,000 providers receiving $1.7 billion in Phase 4 payments.

HHS announced the Phase 4 payments in September 2021, with plans to provide $17 billion in general distributions and $8.5 billion in American Rescue Plan payments for rural providers.

Phase 4 payments are equity-focused, prioritizing smaller providers that experienced significant revenue losses and offering bonus payments for providers that serve Medicaid, Children’s Health Insurance Program (CHIP), and Medicare beneficiaries, HHS said.

The department began distributing funds in December 2021, with around 69,000 providers receiving $9 billion. The second batch, distributed in January 2022, included $2 billion for approximately 7,600 providers, and the third round in February 2022 allocated $560 million to 4,100 providers.

Last month, HHS released another $413 million in Phase 4 payments to more than 3,600 providers.

According to HRSA, 92 percent of Phase 4 Provider Relief Fund applications have been processed. Healthcare providers can use any funds received during the first half of 2022 until June 30, 2023.

In addition, HHS has distributed nearly $7.5 billion in American Rescue Plan rural payments to more than 44,000 providers. The department has processed 97 percent of applications so far.

HRSA has stated that the remaining Phase 4 and American Rescue Plan payment determinations will occur periodically throughout May 2022.

The American Hospital Association (AHA) has been a fierce advocate for additional Provider Relief Funds as hospitals and health systems continue to face financial challenges related to the pandemic.

The trade organization wrote letters to Congress in March and April 2022, urging leaders to provide more COVID-19 financial relief to hospitals. AHA requested additional Provider Relief Funds to help address expenses and losses related to the Delta and Omicron surges, which led to increased case numbers, hospitalizations, and deaths.

AHA also noted that due to Congress failing to extend the moratorium on Medicare sequestration, hospitals will lose an estimated $3 billion by the end of 2022.