Providers Still Want More Time to Spend COVID-19 Relief Funds

The American Hospital Association (AHA) is seeking more time for healthcare providers with unspent COVID-19 relief funds.

The deadline to use COVID-19 relief funds is approaching for many providers. According to HHS guidance, providers who received more than $10,000 in aggregate funds from the Provider Relief Fund (PRF) between April 10, 2020, and June 30, 2020, have until the end of the month to use the funds.

But HHS recently extended the deadline to use the funds for providers who received at least $10,000 in total after June 30, 2020. Providers now have until the end of the year if they received the funds between July 1, 2020, and December 31, 2020, while providers receiving funds between January 1, 2021, to June 20, 2021, have until June 30, 2022.*

*Editor's note: A previous version of this article misstated the deadline.

Additionally, providers who will receive funds later this year will have to spend the money by the end of 2022.

Healthcare industry groups applauded HHS for extending the deadlines for certain providers, but now AHA is asking for more flexibility when it comes to COVID-19 relief.

“[W]e urge you to revise your guidance to enable all recipients to retain access to these funds through the later of the end of the COVID-19 public health emergency (PHE) or June 30, 2022, which was the final date adopted in the Department of Health and Human Services’ (HHS) most recent guidance,” Richard J. Pollack, president and CEO of AHA, wrote in a June 22nd letter to HHS Secretary Xavier Becerra.

The letter said that “providing additional flexibility is necessary, fair and appropriate.”

“That is because the new guidance disadvantages certain providers without providing a clear policy rationale. Specifically, some providers will need to spend their funds well before others simply because they received a PRF payment earlier in the distribution process,” Pollack added.

The PRF has received $178 billion in allocations from pandemic-related legislation, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act. HHS has disbursed over $75 billion in general distributions, as well as billions more in targeted distributions to providers in high-impact areas, safety-net hospitals, and rural hospitals, among other provider types.

Providers can use the funds “to prevent, prepare for, and respond to coronavirus” by reimbursing providers for “expenses or lost revenues that are attributable to coronavirus,” AHA said. However, providers are still facing increased expenses and lost revenues because of the virus.

“Moreover, hospitals have worked very hard as partners with HHS and the government in providing vaccinations, particularly in vulnerable communities,” Pollack wrote. “Consequently, we strongly believe that they should be able to continue to use PRF money ‘to prevent, prepare for, and respond to coronavirus,’ as intended under the law, regardless of when they happened to receive a PRF payment.”

Several states have ended their states of emergency in light of rising vaccination rates and limited outbreaks of the virus. However, the national COVID-19 public health emergency (PHE) is ongoing. HHS Secretary Becerra has extended the national PHE through July 19, 2021. But industry experts expect Becerra to continue extending the national PHE through the end of the year.

“The PHE is very much ongoing. While new COVID-19 cases and hospitalizations have slowed since the peak this winter, they are still significant. In fact, caseloads and hospitalizations are once again increasing in certain areas of the country,” Pollack stated.

The rationale for using PRF payment date as a basis for spending deadlines is unfair, Pollack continued. For example, HHS disbursed $10 billion to rural facilities in early May 2020, as well as $1 billion to more rural facilities in mid-July 2020. Yet the first group has until the end of the month to spend the funds despite the ongoing pandemic, while the second group has until the end of the year.

“Thus, the exact same type of payment being made just one day sooner results in a provider having six months less to spend the funding,” Pollack wrote.

“The AHA stands ready to work with you on this issue and would welcome the opportunity to discuss this critical issue,” the letter concluded.