HCA Healthcare is returning CARES Act funding.
HCA Healthcare will be returning all of the federal aid it received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, it has announced.
Over the course of the pandemic, HCA received approximately $1.6 billion from provider relief fund distributions and approximately $4.4 billion in Medicare accelerated payments.
In its announcement, HCA said it will work with the necessary agencies to return the funds.
The company says it is able to return all $6 billion of the government aid because it enacted "a conservative approach" to its financial and operational strategies at the onset of the COVID-19 pandemic.
WHAT'S THE IMPACT
HCA would have had to repay the $4.4 billion of Medicare accelerated payments eventually, but the financial assistance from the CARES Act was a grant that did not need to be repaid.
This news, along with HCA's preliminary third-quarter financial results, points to the company's financial recovery from the pandemic.
It anticipates total revenue for the third quarter of 2020 to be $13.3 billion, compared with $12.7 billion from the same time last year.
Despite seeing declines in admissions in the third quarter of this year, HCA expects to see a 15% increase in facility revenue per equivalent admission compared with last year. It attributes this to "increases in acuity for patients treated and favorable payer mix during the quarter," HCA said in its announcement.
HCA plans to release its complete financial and operating results report for the third quarter of 2020 later this month.
THE LARGER TREND
The Department of Health and Human Services has distributed approximately $175 billion in relief funding to providers to date.
HHS announced Oct. 8 an additional $20 billion in funding for providers that will equal 2% of annual revenue from patient care plus an add-on payment to account for revenue losses and expenses attributable to COVID-19.
The Centers for Medicare and Medicaid Services last week announced amended terms for payment issued under the Accelerated and Advance Payment Program. The repayment will now begin one year from the issuance date of each provider's or supplier's accelerated or advance payment.
Still, many health systems aren't in favorable financial standings. Statistics from Kaufman Hall indicate that the industry as a whole could lose up to $323 billion because of COVID-19-related losses. The same report found that U.S. hospitals are anticipating about $120 billion in losses from July to December.
ON THE RECORD
"We greatly appreciate the CARES Act funding and the policymakers who fought hard to ensure hospitals would have the essential resources during the pandemic," said Sam Hazen, CEO of HCA Healthcare. "As the initial immediacy of the emergency has passed, and with more information, and more experience managing our operations during the pandemic, we believe returning these taxpayer dollars is appropriate and the socially responsible thing to do. Our focus will remain on supporting our patients, employees and physicians and continuing the vital role we play in the communities we serve."
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