The U.S. Department of Health and Human Services has doled out emergency funding to hospitals and health systems to help hospitals with support and resources during the COVID-19 pandemic, but the American Hospital Association considers those funds a first step – and today, the AHA sent a letter to HHS requesting more.
The additional funds that are required are "substantial," according to the AHA – about $50 billion in total – and should be distributed to hospitals and health systems in an expedited manner using a phased approach.
The AHA cites numerous state and local orders decreeing that many elective procedures remain cancelled, as well as many Americans' voluntary postponement of needed care. COVID-19 treatment has resulted in skyrocketing demand for medical equipment and supplies, which in turn have increased costs.
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WHAT'S THE IMPACT?
To quantify that, AHA estimated a four-month financial impact of more than $202 billion in losses for hospitals and health systems, averaging more than $50 billion per month. The organization said all hospitals need additional funds, but in particular the "hot spot" hospitals and those serving high numbers of Medicaid and uninsured patients.
The AHA also called for a process to reimburse eligible hospitals and health systems for healthcare-related expenses or lost revenues attributable to COVID-19 through a direct application process.
Acknowledging that establishing this process would be a difficult and time-consuming task, AHA urged the federal government to earmark an additional $10 billion in funds as soon as possible to hot-spot hospitals to offset testing- and diagnostic-related costs tied to COVID-19 cases. It also requested $10 billion be distributed to hospitals with a payer mix high in Medicaid and uninsured patients, who have "suffered disproportionately" from the pandemic.
"If an admissions-based payment is again used, consideration should be given not only to the most recently available data on the raw number of admissions, but also to the portion of a hospital's admissions accounted for by COVID-19," AHA President and CEO Richard Pollack wrote in the letter. "The Department also should include an additional disbursement of $2 billion based on a hospital's low-income and uninsured patient population, as it did previously."
The remaining $30 billion AHA is requesting should go to all other hospitals, the group said, and be distributed in an equitable manner that accounts for factors such as the number of beds. The AHA also requested that HHS then use the application process it created to distribute funds to hospitals and health systems based on their COVID-19-related costs and lost revenue.
Costs and lost revenue that should be eligible for relief funds include "expenses related to surge capacity, expenses related to ensuring an adequate workforce, and additional expenses, such as for managing and treating persons under investigation who may or may not turn out to be COVID-19 positive," according to the letter.
THE LARGER TREND
In mid-April, HHS' Centers for Medicare and Medicaid Services announced the release of $30 billion of $100 billion earmarked for hospitals in the Coronavirus Aid, Relief and Economic Security Act.
This money is separate from $34 billion in advance-payment loans to providers announced the week prior. CMS later increased the amount in the Accelerated and Advance Payment Program to $51 billion.
The CARES Act funds began their distribution to providers via direct deposit on April 10. All facilities and providers that received Medicare fee-for-service reimbursements in 2019 are eligible for the distribution.
ON THE RECORD
"Many hospitals are in dire circumstances as they face the biggest financial crisis in history," said Pollack. "While our members continue to do everything they can to address COVID-19 cases, quickly making substantial additional funds available would help them continue to put the health and safety of patients and personnel first, and in many cases, may actually ensure they are able to keep their doors open."