More on Reimbursement

70,000 providers to get $24.5 billion to cover lost revenue and expenses

Congress continues to debate a $900 billion relief bill that would include funds for vaccine distribution and testing and relief for hospitals.

Susan Morse, Managing Editor

The Department of Health and Human Services has announced the distribution of $24.5 billion to over 70,000 providers to cover the cost of lost revenue and net change in expenses caused by the coronavirus pandemic.

Payment distribution started Wednesday and will continue through January 2021.

Over 35,000 applicants will not receive an additional payment either because they experienced no change in revenues or net expenses attributable to COVID-19, or because they had already received funds that equal or exceed reimbursement of 88% of reported losses, HHS said.

HHS said it was pleased to find in its analysis that providers disproportionately impacted by this pandemic applied and would be receiving another infusion of financial relief.

Nursing homes, for example, will be receiving another $1.10 billion in Phase 3 funding. 

This builds on the half billion in incentive payments HHS recently announced and the more than $15 billion in aggregate funding already distributed. 

Ambulance or transportation services providers will be receiving $1.48 billion in Phase 3 funding.

As with other general distributions, applicants that had not already received a baseline payment of 2% percent of annual revenue from patient care are eligible, as well as previous relief fund applicants.


HHS said it recognizes this pandemic has upended the healthcare system and caused significant financial hardship.

Relief funds passed this spring allocated $175 for providers: $100 billion from the Coronavirus Aid, Relief and Economic Security Act and $75 billion from the Paycheck Protection Program and Healthcare Enhancement Act.

As the pandemic has dragged on and the latest surge has placed hospitals in hard-hit areas beyond capacity for ICU beds and staffing, the American Hospital Association has asked the federal government for more COVID-19 relief, not just in funding but in easing regulatory requirements and in giving more flexibility during the public health

The public health emergency is set to expire on January 20, 2021, the day President-elect Joe Biden takes office. 

This week, the AHA sent a letter to President-elect Joe Biden to again extend the public health emergency. In October, HHS Secretary Alex Azar extended the PHE by 90 days.

Meanwhile, Congress continues to debate another relief package, having failed to do so prior to the election. The latest is a $900 billion deal tied to a  government funding package that needs to pass by Friday night to prevent a government shutdown, according to The Hill. 

Senate Majority Leader Mitch McConnell said a rare weekend session was "highly likely," the report said.

The package would contain a direct payment to Americans, enhanced federal unemployment insurance, and roughly $300 billion in small business aid including paycheck protection program loans, money for COVID-19 vaccine distribution and testing and relief for hospitals, according to CNBC.


In October, HHS planned to release $20 billion to providers. The addition of another $4.5 billion in funding is being used to satisfy 88% of each applicant's reported lost revenues and net change in expenses caused by the coronavirus pandemic in the first half of 2020, HHS said. 

The money is being released after the Health Resources and Services Administration completed review of Phase 3 applications from the relief fund program. As HHS began analyzing applications, it realized the submissions for lost revenues and net changes in expenses would exceed the $20 billion budgeted for the Phase 3 allocation. 


"HHS is providing more than $24 billion in new relief to more than 70,000 healthcare providers, meeting close to 90% of the losses they've reported from the COVID-19 pandemic in the first half of the year," said HHS Secretary Alex Azar. "With the Provider Relief Fund, we've been able to support providers hardest hit by COVID-19, including safety net hospitals, rural providers, and nursing homes, helping ensure they can continue serving their communities during and beyond the pandemic."

Twitter: @SusanJMorse
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