HHS Unveils Plan to Divvy Up Rest of $100B Provider Relief Fund

HHS recently announced its plans for distributing the rest of the $100 billion provider relief fund from the Coronavirus Aid, Relief and Economic Security (CARES) Act, including $10 billion to hospitals in COVID-19 hotspots.

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The federal department has allocated for a “targeted distribution to hospitals in areas that have been particularly impacted by the COVID-19 outbreak,” HHS Secretary Alex Azar shared on Wednesday.

Hospitals serving infected patients in COVID-19 hotspots like New York will receive a larger share of the funds, Azar explained. Although, HHS will account for the challenges faced by hospitals serving a significantly disproportionate share of low-income patients, as reflected by their Medicare Disproportionate Share Hospital (DSH) Adjustment.

"Our goal in all of the decisions we're making is to get the money from the Provider Relief Fund out the door as quickly as possible while targeting it to those suffering the most from the pandemic,” Secretary Azar said in the announcement. “We will continue using every regulatory and payment flexibility we have to help providers continue doing their vital work until we've defeated this virus."

The announcement comes on the heels of criticism from industry leaders who argued that the first round of provider relief fund distribution did not provide enough support for hospitals hit hardest by the outbreak.

HHS doled out $30 billion from the provider relief fund to hospitals earlier this month. The payments were based on the hospital’s Medicare fee-for-service billings from 2019.

This methodology for distributing payments “tilted the playing field against” hospitals serving disproportionate shares of uninsured and Medicaid patients, America’s Essential Hospitals stated. Others like the American Hospital Association (AHA) also called on HHS for more targeted relief for hospitals in COVID-19 hotspots.

Secretary Azar explained that the first round of distribution aimed to get the dollars out as quickly as possible using available data sources. HHS has the same mentality with this round of funding, but it will dedicate about ten percent of the provider relief fund to hospitals based on their locations.

“We appreciate Health and Human Services (HHS) Secretary Azar’s commitment to distribute this funding quickly and to target providers suffering the most from this pandemic, and we look forward to details about how targeting will occur,” Bruce Siegel, MD, MPH, president and CEO of America’s Essential Hospitals stated on Wednesday.

However, Siegel did express concerns over the technical details of targeted distribution, which will require data from providers which is due to HHS via an authentication portal by the end of today.

“We call on the department to extend its data submission deadline until it has resolved these technical issues and clearly and publicly communicated how it will use this information,” Siegel stated.

The majority of the provider relief fund will still go to Medicare hospitals and providers, HHS added.

HHS announced plans to distribute another $20 billion to the hospitals and providers based on their 2018 net patient revenue, bringing the total amount for this group to $50 billion.

A large portion of the provider relief fund will also go toward the Trump administration’s plan for paying for the treatment of the uninsured population.

At the start of April, President Trump and Secretary Azar announced their intentions to use the provider relief fund to reimburse healthcare providers, at Medicare rates, for coronavirus-related treatments of uninsured patients. Providers getting the reimbursements would also not be able to balance bill patients for COVID-19 testing costs.

Reimbursements for uninsured COVID-19 care could total as much as $42 billion, or over 40 percent of the provider relief fund, according to a recent report from the Kaiser Family Foundation.

Industry leaders have contended that emergency funding earmarked for providers should not pay for coverage gaps. Rather, the Trump administration should open a special enrollment period for the Affordable Care Act’s marketplaces or create a separate fund to address the costs of uninsured patients.

“The emergency relief fund in the CARES Act was intended to provide hospitals with an infusion of emergency relief as providers incur substantial expenses and lost revenue in preparing and fighting this battle against COVID-19,” Rick Pollack, AHA’s president and CEO, said in response to the latest distribution announcement.

HHS did not disclose how much of the provider relief fund will go to reimbursements for uninsured COVID-19 care, but it did unveil the process for claiming the payments.

Every provider who has provided treatment for uninsured COVID-19 patients on or after Feb. 4, 2020, can request claims reimbursement through the program run by the Health Resources & Services Administration (HSRA), HHS stated. Providers can register on the agency’s website starting April 27 and can begin submitting claims in early May.

HHS also allocated $10 billion to rural providers, which will be distributed based on operating expenses, and $400 million to the Indian Health Service. Some providers will also receive further, separate funding, including skilled nursing facilities, dentists, and providers who solely take Medicaid, the department added.