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Hospitals get additional $20 billion infusion of CARES Act funds

In total, $40-plus billion will be distributed to hospitals, pay for uninsured and target hot spots, rural providers and Indian Health Service.

Susan Morse, Managing Editor

The Department of Health and Human Services is giving hospitals another $20 billion in CARES Act funding and allocating the remaining $50 billion to pay for the claims of the uninsured and to target COVID-19 hot spots, rural hospitals and Indian Health Service facilities.

The first wave of the $20 billion for hospitals is expected to be delivered on Friday. This follows an initial distribution of $30 billion for hospitals and now totals half of the $100 billion earmarked for providers in the Coronavirus Aid, Relief and Economic Security Act.

Without naming a figure, HHS Secretary Alex Azar said Wednesday that some of the remaining $50 billion will be set aside to pay for the claims of the uninsured, going back to February 4.

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Another $10 billion will be for targeted relief for hot spots, such as New York City; $10 billion for rural hospitals; and $400 million for the Indian Health Service, especially for the Navajo Nation, which has suffered from a COVID-19 outbreak. Some providers will get further separate funding, according to Azar.

PROVIDER RELIEF FUND

The $20 billion of the Provider Relief Fund is allocated for general distribution to Medicare facilities and providers impacted by COVID-19, proportional to providers' share of 2018 net patient revenue.

The funding will be based on the providers' share of Medicare fee-for-service reimbursements, Azar said.

Payments will go out weekly, on a rolling basis, as information is validated, with the first wave to be delivered on Friday, April 24.

A portion of providers will automatically be sent an advance payment based on the revenue data they submit in Centers for Medicare and Medicaid Services cost reports. Providers without adequate cost report data on file will need to submit their revenue information to a portal opening this week.

Providers who receive their money automatically will still need to submit their revenue information so that it can be verified.

As part of this commitment, HHS is banning surprise medical bills for COVID-19 treatment. As a condition to receiving these funds, providers must agree not to seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient that are greater than the patient would have otherwise been required to pay if the care had been provided by an in-network provider, HHS said.

The $20 billion is in addition to the $30 billion previously distributed on April 10 and 17.

TARGETED ALLOCATIONS FOR HIGH-IMPACT AREAS

Another $10 billion will be allocated for a targeted distribution to hospitals in areas that have been particularly impacted by the COVID-19 outbreak. As an example, hospitals serving COVID-19 patients in New York, which has a high percentage of total confirmed COVID-19 cases, are expected to receive a large share of the funds.
 
Hospitals should apply for a portion of the funds by providing information via an authentication portal before midnight Pacific Time, Thursday, April 23. 

Among other data, hospitals will need to provide the total number of intensive care unit beds as of April 10 and the total number of admissions with a positive diagnosis for COVID-19, from January 1 to April 10.

The authentication and data-sharing process should take less than five minutes via a system that should be familiar to most hospitals, HHS said.

The Administration will use the data it receives to distribute the targeted funds to where the impact from COVID-19 is greatest. The distribution will take into consideration the challenges faced by facilities serving a significantly disproportionate number of low-income patients, as reflected by their Medicare Disproportionate Share Hospital adjustment.

ALLOCATION FOR TREATMENT OF THE UNINSURED

As announced in early April, a portion of the $100 billion will be used to reimburse healthcare providers for COVID-19-related treatment of the uninsured.

Every healthcare provider that has provided treatment for uninsured COVID-19 patients on or after February 4 can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding.

Steps will involve: enrolling as a provider participant, checking patient eligibility and benefits, submitting patient information, submitting claims, and receiving payment via direct deposit.

Providers can register for the program on April 27 and begin submitting claims in early May 2020.  

ALLOCATION FOR RURAL PROVIDERS

Another $10 billion will be allocated for rural health clinics and hospitals, most of which operate on especially thin margins and are far less likely to be profitable than their urban counterparts.
 
This money will be distributed as early as next week on the basis of operating expenses, using a methodology that distributes payments proportionately to each facility and clinic.

This method recognizes the precarious financial position of many rural hospitals, a significant number of which are unprofitable.

The rural allocation will go to an estimated 2,000 rural hospitals and 1,100 health clinics.

This money is on top of the $165 million for rural hospitals and telehealth centers that was announced by HHS's Health Resources and Services Administration earlier on Wednesday.

ALLOCATION FOR INDIAN HEALTH SERVICE

The Indian Health Service will receive $400 million. The money will be distributed as early as next week on the basis of operating expenses for facilities.

ADDITIONAL ALLOCATIONS

Some providers will receive further, separate funding, including skilled nursing facilities, dentists, and providers that solely take Medicaid.

WHY THIS MATTERS

In allocating the funds, the Administration is working to address both the economic harm across the entire healthcare system due to the stoppage of elective procedures and the economic impact on providers incurring additional expenses caring for COVID-19 patients, HHS said.

THE LARGER TREND

President Donald J. Trump signed the bipartisan CARES Act legislation to provide $100 billion to healthcare providers, including hospitals battling the coronavirus.

The Families First Coronavirus Response Act, as amended by the CARES Act, requires private insurers to waive an insurance plan member's cost-sharing payments for COVID-19 testing. The Administration also secured funding to cover COVID-19 testing for uninsured Americans.

In addition, insurers, including Humana, Cigna, UnitedHealth Group, and the Blue Cross Blue Shield system committed to waiving the cost-sharing payments for treatment related to COVID-19 for plan members.

ON THE RECORD

"The healthcare providers on the frontlines of the pandemic are heroic, and President Trump recognizes that every American healthcare provider has pitched in for this fight in some way," said HHS Secretary Alex Azar. "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. 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."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com