HHS sending $1.4B from COVID-19 bailout funds to children’s hospitals

Dive Brief:

  • HHS is sending $1.4 billion to nearly 80 children’s hospitals nationwide, the agency said Friday. It’s coming out of the Coronavirus Aid, Relief and Economic Security Act and the Paycheck Protection Program and Health Care Enhancement Act, which together allocated $175 billion in relief funds to hospitals and other providers.
  • Certain free-standing children’s hospitals not affiliated with larger hospital systems will be eligible to receive 2.5% of their net revenue from patient care and will begin receiving funds next week that they don’t have to pay back, according to HHS.
  • Children’s hospitals have been uniquely impacted by the novel coronavirus that largely afflicts older adults and those with underlying conditions, according to HHS. This targeted round will “ensure children’s hospitals receive relief proportional to other hospitals across the nation,” the agency said.

Dive Insight:

The Children’s Hospital Association has lamented that its members have mostly been left out of disaster relief funding. The group declined to comment as it is still reviewing the allocations in Friday’s release.

Like other hospitals, children’s hospitals have faced lost revenues and increased expenses due to the pandemic, and some reports show they might be having a trickier time getting patients back in for care.

A Commonwealth Fund study found that while some specialties have returned or began exceeding baseline volume levels, pediatrics was still 26% below baseline volumes beginning the week of July 26. In April, when most states had stay-at-home orders in place, pediatric visits were 62% below baseline levels.

At the pandemic’s onset in the U.S., children’s hospitals suspended nonemergency surgeries, purchased additional personal protective equipment and provided backup capacity to local hospitals in the event of a local surge of COVID-19 cases, according to the release.

The $1.4 billion HHS is sending to children’s hospitals is urgently needed to help them offset revenue losses and to recognize “the contributions of children’s hospitals helping to meet the challenges of this pandemic,” HHS Secretary Alex Azar said in the statement.

HHS released a preliminary state-by-state breakdown of children’s hospitals receiving the distributions, which it said it will continue to update.

The agency has faced scrutiny over its allocation methods for the $175 billion pot of funding and tweaked its formulas several times.

Mega for-profit hospital chains reported that while volumes had plunged in their second quarters, profits did not, raising questions about whether the bailout funds were fairly distributed.

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