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HHS to Release an Additional $4B in COVID-19 Funds

Updated: HHS plans to release an additional $10B in COVID-19 Funds to hospitals in “high-impact” areas. Learn more about how they plan to distribute these additional funds here.

Highlights

  • The U.S. Department of Health & Human Services (HHS) said it plans to funnel an additional $4 billion in COVID-19 aid to certain healthcare providers who may have been excluded from earlier, targeted distributions of funding meant to aid safety net and rural providers.
  • The announcement expands which facilities can qualify for targeted funding that was earmarked for safety net providers in funding allocated from the Coronavirus Aid, Relief, and Economic Security Act. After hearing from those in the field, a senior HHS official stated the department found out that some safety net providers were missed in an earlier distribution of funding. This is designed to correct that.
  • Plus, an additional $1 billion has been marked for providers with specialty rural designation or suburban facilities that may take care of a large rural population. It will also help hospitals in smaller metropolitan areas.

The nation is still struggling to contain the spread of the novel coronavirus and the federal health agency is making plans to dole out additional funding in an attempt to keep providers whole — or at least stem further losses.

HHS’ latest move is in addition to the previously promised $10 billion for safety net hospitals and $15 billion for those that primarily service Medicaid patients.

HHS estimates the funding announced will provide relief of over $1 billion to 500 of these hospitals with payments ranging from $100,000 to $4,500,000 for rural designated providers and $100,000 to $2,000,000 for the additional providers.

This targeted distribution will be made to certain acute care hospitals that meet the following criteria: (1) a profit margin threshold of less than or equal to 3% averaged consecutively over two or more of the last five cost reporting periods and (2) an annualized uncompensated care cost (UCC) of at least $25,000 per bed in the most recent cost report and (3) a Medicare Disproportionate Patient Percentage (DPP) of 20.2% or higher.

HHS revised the profitability threshold to be less than 3% “averaged consecutively over two or more of the last five cost reporting periods”. The agency expects this will aid 215 facilities.

HHS is also aiming to target an additional $1 billion in funding to rural providers that may not have fit the previous designation.

Payments for Rural Providers by State

Connecticut/Massachusetts
Total payment to safety-net hospitals: $45.9 million
Number of safety-net hospitals: 4
Total payment to small city and rural hospitals: $9 million
Number of small city and rural hospitals: 4

New Jersey 
Total payment to safety-net hospitals: $77.2 million
Number of safety-net hospitals: 4
Total payment to small city and rural hospitals:  $4.9 million
Number of small city and rural hospitals: 3

New York
Total payment to safety-net hospitals: $319.5 million
Number of safety-net hospitals: 13
Total payment to small city and rural hospitals: $18 million
Number of small city and rural hospitals: 8

Pennsylvania
Total payment to safety-net hospitals: $89.6 million
Number of safety-net hospitals: 5
Total payment to small city and rural hospitals: $46.9 million
Number of small city and rural hospitals: 21

These may include some suburban hospitals that are not considered rural but serve rural populations and operate with smaller profit margins and limited resources than larger hospitals HHS
For more information or questions, please contact a member of Withum’s Healthcare Services Group.

In total, $175 billion is earmarked for healthcare providers from Congressional relief packages. Of that, about $115 billion has been obligated to certain providers, a senior HHS official said Friday. However, not all providers have signed and attested to receiving those funds. They have 90 days to do so.

They could also decide to return the funds, which is what makes it difficult for the agency to say how much has gone out. However, $61 billion has been delivered and attested to, the official said.

There is no action required by the provider to apply for this distribution. As with other payments, providers will be required to attest to Terms and Conditions to keep the funds received.

Healthcare Services

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