Providers Ask Congress for Financial Assistance to Combat COVID-19

Leading provider groups are calling on the federal government to protect them from financial losses stemming from the COVID-19 outbreak to ensure frontline providers have the supplies, infrastructure, and reimbursement necessary to treat the expected surge of patients.

In a March 17 letter to Congressional leaders, the American Hospital Association (AHA) urged the federal government to pass a payroll tax cut to deliver financial assistance to hospitals making infrastructure investments, as well as for the purchase of equipment and supplies needed to tackle the rising prevalence of COVID-19.

A payroll tax cut would not only fund key infrastructure investments, but also offset the costs of uncompensated care, bad debt, and charity care that are all expected to rise as more patients present with COVID-19, the group stated.

“If tax relief is provided, it is important to provide that assistance through payroll taxes, so as to ensure that all hospitals are able to benefit from that relief,” the group wrote in the letter obtained by RevCycleIntelligence. “Helping hospitals and health systems fund these investments is necessary to be successful in preparing for, responding to and controlling this infectious disease outbreak.”

Physician practices in the Medical Group Management Association (MGMA) also supported payroll tax relief. The cut would “support practice viability for the duration of the national emergency,” the association representing over 55,000 medical practice administrators, executives, and leaders said in a March 18 letter to Congressional leaders.

Yesterday, the Senate passed a COVID-19 relief package. The bill is considered “phase two” of Congress’ legislative efforts to help the US combat the novel coronavirus pandemic and bolster the falling economy, which has already entered into a recession according to Bank of America.

Over 222,600 individuals across the globe have been affected by the virus, including more than 9,400 Americans, according to the latest numbers from Johns Hopkins University at the time of publication.

The rapid spread of the novel coronavirus is wreaking havoc on the US economy as the outbreak forces cities and states to close restaurants, bars, gyms, and major cultural institutions. Other industries including travel and energy have also faced significant downturns as consumers stay inside to prevent the spread of COVID-19.

Payroll tax relief is one of the strategies the Trump administration is weighing to stimulate the falling economy. Earlier this month, the president proposed to eliminate payroll taxes that fund Social Security and Medicare through the end of the year. The move would prevent layoffs in key industries and help companies shoulder the financial burden of COVID-19.

Critics of the proposal, however, have argued that eliminating payroll taxes would only benefit the well-off, while sending money directly to individuals and families would provide relief to those who need it most.

An analysis released by the Institute on Taxation and Economic Policy (ITEP) on Tuesday found that eliminating payroll taxes would cost $843 billion and 65 percent of the benefits would go to the richest 20 percent of taxpayers. Meanwhile, sending checks to every household “would be a far more effective economic stimulus.”

But Congress should not leave hospitals and other provider organizations off of their list of industries needing financial assistance to make it through the pandemic, the AHA emphasized in its letter.

“We applaud Congress for the steps taken so far to address the threat to public health and individual financial security, but hospitals and health systems also need additional resources to combat the ongoing public health emergency,” the hospital group stated.

“Directly supporting hospitals and health systems not only will help us care for our patients but will provide a stimulus to communities in need of financial stability during this turbulent time.”

In addition to payroll tax relief, AHA also urged Congress to increase the availability of financing for hospital construction during the outbreak. Restoring the ability for governments and hospitals to advance refund tax-exempt municipal bonds would unleash billions of dollars to meeting urgent needs, the hospital group stressed.

Additionally, increasing access to capital for small borrowers by raising the bank-qualified borrowing limit to $30 million would also benefit small, non-profit hospitals.

Physician practices also asked Congress for additional relief in its “phase 3” spending relief package, which is slated to emerge any day now.

“There is an urgent need for the federal government to provide direct and increased payments to physicians and their practices, without budget neutral offsets, to allow them to maintain the financial viability of their practices,” MGMA said in its letter.

The COVID-19 pandemic is creating “financial uncertainty” for physician practices, the group stressed.

“[P]ractices are facing reduced revenue due to decreased in-person patient volume, which is replaced by virtual visits that are often uncompensated due to coverage limitations and/or complex and inconsistent payer billing requirements for such services,” the letter stated. “Expenses are increasing while revenue is decreasing, creating an unstable trajectory that must be addressed to ensure patient access to care.”

MGMA provided a list of recommendations to Congress, including increasing the $500 million for personal protective equipment that was provided in the Public Health and Social Services Emergency Fund by the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (HR 6074) two weeks ago.

The industry also advised Congress to direct national disaster relief funding to reimburse physicians at 110 percent of 2020 Medicare rates for uninsured patients with COVID-19. The group also advised Congress to:

• Encourage commercial payers to provide similar waivers and regulatory flexibility for delivering and paying for telemedicine
• Suspend Medicare sequestration cuts to physicians and hospitals
• Extend data submission deadlines for quality reporting under the Quality Payment Program
• Expand paid family, medical, and sick leave with federal funding
• Increase Medicaid payments to physicians to reimbursement rates no less than Medicare rates