HHS Distributes Another $20B in Provider Relief Funds

HHS recently announced new Phase 3 Provider Relief Funding for healthcare providers, including an expanded group of behavioral health providers.

According to the announcement, HHS will begin distributing $20 billion in Provider Relief Funding today to providers on the frontlines of the COVID-19 pandemic.

Addiction counseling centers, mental health counselors, psychiatrists, and other behavioral health providers identified by HHS’ Health Resources and Services Administration (HRSA) and the Substance Abuse and Mental Health Services Administration (SAMHSA) will be eligible for a slice of the funding.

“HHS has worked to ensure that all American healthcare providers receive support from the Provider Relief Fund in a fast and fair way, and this new round helps ensure that we are reaching America’s essential behavioral health providers and takes into account losses and expenses relating to coronavirus,” HHS Secretary Alex Azar said in the announcement.

Phase 3 Provider Relief Funding will also be available to providers who began practicing in 2020, including Medicare, Medicaid, CHIP, dentists, assisted living facilities, and behavioral health providers that start practicing between January 1, 2020, and March 31, 2020.

Healthcare providers who already received funding during Phases 1 and 2 are also invited to apply for additional Phase 3 funding, HHS stated.

Newly eligible behavioral health and new providers will receive a payment that equals 2 percent of patient care revenue, while providers who have already received Provider Relief Funding up to the threshold can earn an add-on payment.

The add-on payment will be available once HRSA doles out payments to eligible providers based on patient care revenue. For equitable distribution of the add-on payments, the agency will consider changes in operating revenues from patient care and operating expenses from patient care, including expenses incurred related to the virus. The agency will also take previous Provider Relief Fund distributions into account, HHS said.

Healthcare providers must apply to receive Phase 3 Provider Relief Funding and HHS is encouraging eligible providers to apply early.

“[D]o not wait until the last day or week of the application period,” the department stated in the announcement. “Applying early will help to expedite HHS’s review process and payment calculations, and ultimately accelerate the distribution of all payments.”

The application period opened earlier today and will run through November 6, 2020.

HHS also noted that all payment recipients will be required to attest to receiving a Phase 3 General Distribution payment and accept the associated Terms and Conditions, which in the past, have barred providers from balancing billing patients for coronavirus-related treatment, among other requirements.

HHS has already distributed over $100 billion in COVID-19 relief funding to healthcare providers through previous general and targeted distributions, the department stated in the announcement.

That leaves approximately $75 billion left in allocations to the Provider Relief Fund from the CARES Act and subsequent COVID-19 legislation, including the Phase 3 general distribution.

However, healthcare providers are saying that they need more emergency funding to support COVID-19 response and recovery efforts.

A recent analysis conducted on behalf of the American Hospital Association (AHA) predicted half of all US hospitals to operate in the red by the end of 2020 because of COVID-19.

“Heading into the COVID-19 crisis, the financial health of many hospitals and health systems were challenged, with many operating in the red … this pandemic is the greatest financial threat in history for hospitals and health systems and is a serious obstacle to keeping the doors open for many,” Rick Pollack, president and CEO of the hospital group, said in a statement at the time.

“While we appreciate the support from the Administration and Congress, we need further help to stay afloat to continue our mission of caring for patients and communities,” Pollack added.

In July, the AHA, alongside the American Medical Association and the American Nurses Association, called on Congress to allocate at least another $100 billion in COVID-19 relief funds to providers in the next legislative package.

Efforts to pass another COVID-19 relief package, however, have stalled.

The House of Representatives recently passed a $2.2 trillion stimulus, which would add $50 billion to the Provider Relief Fund and provide additional funding for the Paycheck Protection Program. But the House adjourned for October recess without making progress with the White House on the bill, according to national news sources.