Hospital lobby asks feds for more CARES funds, targeted distribution

Dive Brief:

  • The American Hospital Association is lobbying HHS to change the funding formula of the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, in order for its members to better cope with the financial fallout from the COVID-19 pandemic.
  • AHA has asked for a more expedited release of CARES funds, but also at more targeted members, such as hospitals with high numbers of Medicare Advantage and Medicaid patients and those in rural areas. It is also asking for more money to go to these particular facilities. They also asked for HHS to address hotspots where COVID-19 admissions are higher than average or there are a high proportion of residents under investigation for suspected coronavirus infections.​

  • CMS Administrator Seema Verma said during a press call Wednesday that the second round of funding will go out this week, and said it would not be as strict as the first round, addressing “providers across the board, whether they serve Medicare patients, Medicaid or private insurers, to make sure that all providers across the country are addressed,” Verma said.

Dive Insight:

The CARES Act allocated $100 billion to the nation’s hospitals for them to deal with all the economic stressors associated with the COVID-19 pandemic, including the cancellation of elective procedures, the need to purchase additional equipment and other issues.

However, only $30 billion has been disbursed as of last week, and hospitals are continuing to feel pain. In Thursday’s letter to HHS Secretary Alex Azar, AHA CEO Richard Pollack called the pandemic “the biggest financial crisis in history” for hospitals. And he also asked for fundamental changes in how the money is disbursed, with a second wave of funding set to be released this week.

Of particular concern is the fact that the initial $30 billion of CARES money was released to all providers that bill Medicare. 

“According to our estimates, hospitals received significantly less than their overall proportion of Medicare spending or overall health care spending resulting in payment from the emergency fund that represents a small fraction of what is needed,” Pollack wrote. “Hospitals continue to be in a crisis situation and time is of the essence.”

As a result, AHA has asked that the next wave of funds go to hospitals exclusively — not only inpatient facilities but long-term care and critical access hospitals, inpatient rehabilitation and psychiatric facilities. The funds should also be distributed “in an equitable manner, such as by bed size, total net patient revenue, or adjusted admissions.”

It also asked for additional funding to hospitals that have a high proportion of Medicaid patients because the first stage was based on which facilities received Medicare fee-for-service payments, short-changing those providers. The same issue occurred at hospitals with a high proportion of Medicare Advantage patients, according to Pollack’s letter. Rural hospitals are also at high risk of closing and need additional funding, he noted.

“The initial round of funding began to provide hospitals and health systems with some much-needed relief, but simply was not of the magnitude necessary,” Pollack’s letter concluded.

The American Medical Association, along with other physicians groups, wrote to congressional leaders Wednesday in regard to the funding. While calling the CARES Act as “a meaningful step in preserving the health care infrastructure during today’s crisis and beyond,” the letter urges leaders to “take additional steps to protect patient access to care by preserving the viability of physician practices as part of the nation’s essential health care system.”

The group asked lawmakers to consider supplemental measures addressing financial burdens healthcare providers are facing, such as adjusting Medicare and Medicaid payment provisions for providers unable to repay the accelerated payments.

Posted in Law