"As you are aware, hospitals are in a crisis situation and time is of the essence," AHA president and CEO Richard Pollack wrote to Health and Human Services Secretary Alex Azar and Centers for Medicare and Medicaid Services Administrator Seema Verma. "Thus, we ask you distribute these funds directly to providers."
Pollack suggested using Medicare Administrative Contractors to process applications and to make payments either to individual hospitals or to a health system.
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HHS and CMS should direct the MACs to immediately distribute funds to every hospital in the U.S. at the rate of $25,000 per bed, or $30,000 per bed in "hot spots," Pollack recommended.
The MACs have the information necessary to calculate these per-hospital amounts, he said.
There are approximately 924,000 hospital beds in the U.S., working out to an estimated distribution of $23 billion. This doesn't include additional funding for hot spots that could be identified by the number of coronavirus deaths, the rate of increase in diagnoses or another method, Pollack said.
Funds distributed in this manner could be reconciled at a later date using hospital applications that delineate their exact need for funds, he said.
The AHA wants CMS to "directly and expediently distribute to rural and urban hospitals and health systems funds from the Public Health and Social Services Emergency Fund that were designated for providers in the Coronavirus Aid, Relief, and Economic Security Act," Pollack said.
WHY THIS MATTERS
President Trump signed the CURES Act into law on Friday, giving hospitals a much-needed $100 billion at a time when they are losing revenue. Hospitals are preparing for a surge of COVID-19 patients, while at the same time losing their money-making elective procedures.
Some hospital CEOs have wondered if the money will arrive in time for them to make payroll. At least one has said there must be an immediate influx of cash within two weeks or the hospital risks closure.
CEOs have also questioned how the funds may be used.
Pollack outlined eligible categories for funds, including:
- expenses related to surge capacity, such as the construction or retrofitting of infrastructure for triage treatment areas and command centers
- the acquisition of equipment and supplies, such as beds, ventilators, diagnostic-testing supplies, personal protective equipment, pharmaceuticals and safety equipment
- costs for setting up drive-through testing and additional screening for every patient at the entrances to hospitals and outpatient facilities
- the acquisition of additional technology such as telehealth equipment, command center technology and software
Hospitals are incurring expenses related to additional equipment and security, ensuring an adequate workforce, overtime and emergency pay, paid leave for quarantined or furloughed staff, hotel and housing costs for staff, additional administrative expenses, lost revenue due to the cancellation of elective procedures and other costs.
THE LARGER TREND
The CARES Act increased funding for the Public Health and Social Services Emergency Fund by $100 billion to reimburse eligible healthcare providers for healthcare-related expenses or lost revenues attributable to COVID-19.
All types of hospitals, including rural and urban short-term acute-care, long-term care and critical access hospitals, as well as inpatient rehabilitation and inpatient psychiatric facilities, are incurring expenses related to COVID-19 and must be eligible for funds, Pollack said.
The law specified that funding be distributed on a rolling basis through "the most efficient payment systems practicable to provide emergency payment" to eligible providers, he said.
ON THE RECORD
"We recognize that standing up a process for the MACs over time to directly distribute funds based on hospital applications is not an easy or quick task," Pollack said. "This methodology is permissible under the CARES Act, which gives HHS and CMS the authority to make payments from the fund on a 'prospective' and 'prepayment' basis. Depending on the time required to stand-up a MAC process, additional waves of funds may need to be distributed in this way – they could follow the original distribution formula stated above or have additional adjustments depending on need."
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