Billions of dollars remain in the provider relief fund. Hospital execs are left in the lurch waiting for relief.

Hospital Administration

The federal government amassed a staggering $178 billion in funds last year that were intended to prop up the nation’s healthcare providers amid the swell of COVID-19 cases. Yet, more than a year later, billions of dollars are still sitting in the provider relief fund, triggering anxiety among those left waiting for financial relief.  

Industry experts are frustrated over the lack of information on how, and when, those remaining funds will be made available. The American Hospital Association is calling on HHS to expedite delivery of the remaining funds, according to a letter the powerful lobby sent to HHS Secretary Xavier Becerra this week.  

“We can’t even get information about a next step,” Mara McDermott, vice president of McDermott+Consulting, said. She has been closely tracking the issue as she advises her provider clients.   

Initially the relief money went out fast and furious, appearing one day in bank accounts of providers across the country early into the pandemic. 

But the brunt of the crisis hit many providers the hardest in the fall and winter, as cases and hospitalizations peaked in January, putting enormous strain on healthcare facilities months after receiving the initial tranches of federal aid. 

Yet, some providers still have yet to see relief funds for this period in which they were hardest hit. Some have faced significant losses, and it’s unclear whether government funds are coming to help.

Currently, there’s nowhere to apply for additional funds and efforts to obtain information have been difficult to come by, compliance experts said.  

However, the agency tasked with overseeing the fund, the Health Resources and Services Administration, said relief is on the way.   

“HRSA is working as quickly as possible to distribute these funds and will soon provide updates and guidance for providers,” a spokesperson said.

What’s left?

There is about $24 billion remaining in unallocated funds as of May 5, according to HRSA. Plus, there’s an additional $8.5 billion that was allocated specifically for rural providers by the American Rescue Plan.  

In that bill, there are directives for HHS on how to disburse those funds.

The American Rescue Plan stipulates that HHS disburse another distribution of funds that takes into account the last two quarters of 2020 and the first quarter of 2021. 

Still, providers have been left in a wait and see mode, said Tim Fry, an associate with McGuireWoods who is an expert in healthcare compliance. Many want to know whether they can expect more funds to show up.

That’s exactly what Dave Schreiner wants to know. He runs Katherine Shaw Bethea Hospital in Dixon, Illinois, which sits two hours west of Chicago.

“My greatest frustration is just the unknown. There seems to be a vacuum of information out there about how much is there, when would you expect it, how do you apply for it. It’s just crickets,” Schreiner said.

Schreiner, who has worked at the 80-bed hospital since the 1980s, is craving some predictability. Each day his executive team reviews the hospital’s cash report and has to make operational decisions based on that information. 

He’s anxious that a decision they make now to change any services or operations may be unnecessary if they find out in short order they’re eligible for more help. 

Pandemic’s squeeze

As the pandemic started to strangle the economy last spring, Congress signed the largest rescue package in U.S. history, $2 trillion in relief intended to fortify industries and households from the downturn in the economy spurred by the global pandemic.     

The first rescue package, known as the Coronavirus Aid, Relief, and Economic Security Act, earmarked $100 billion for providers. In sum, additional packages brought the provider relief fund to a total of $186.5 billion.   

How those funds were initially doled out sparked criticism. There was concern that hospitals with significant scale and already hefty cash reserves were capturing a large share of rescue funds. HHS later attempted to correct the imbalance as the first tranches of money were to the advantage of systems that did not have large shares of Medicaid patients, or patients with low incomes.   

Some of those large health systems with already healthy balance sheets went on to return all or some of the money they received. In one example, for-profit giant HCA returned all of the $6 billion in relief funds it received. 

But not all hospitals were as fortunate.  

Smaller, independent hospitals like Schreiner used up those funds as soon as they received them, he said. 

The most important lingering questions experts have is when can providers expect to apply for new money and how long will it take to receive the actual funds after applying. 

“Should all this money just be like sitting in a bank account in the federal government?” McDermott said. “Sitting on it seems to me to defeat the congressional purpose.”

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