HHS starts doling out $12B in CARES funds to 395 hospitals in COVID-19 hot spots

By | May 3, 2020

Dive Brief:

  • HHS said Friday it will begin distributing funds from the Coronavirus Aid, Relief, and Economic Security Act for hospitals in COVID-19 hot spots as well as those in rural areas.
  • The department is sending $ 12 billion across 395 hospitals that provided inpatient treatment to 100 or more COVID-19 patients through April 10. The formula uses a fixed amount per admission plus additional funds based on Medicare and Medicaid disproportionate share and uncompensated care payments.
  • Another $ 10 billion is being directed toward nearly 8,000 rural hospitals, which will receive a minimum base payment and a percentage of their annual expenses. Providers will received the money “in the coming days via direct deposit,” according to HHS.

Dive Insight:

The $ 100 billion CARES Act funding Congress approved for hospitals in late March has been allocated in a variety of ways in an attempt to reach hospitals quickly and equitably as they hemorrhage money during the pandemic.

“HHS has put these funds out as quickly as possible, after gathering data to ensure that they are going to the providers who need them the most,” Secretary Alex Azar said in a statement.

Most facilities have halted revenue-driving elective procedures to free up resources for COVID-19 patients, all the while seeing increased expenses to stay stocked and staffed up for any patient surges. A few states have recently started resuming those services.

The first round of CARES funding — $ 30 billion — was distributed broadly based on Medicare fee-for-service reimbursement. The second wave included $ 20 billion to be sent based on 2018 net patient service revenue and earmarks a portion for treating uninsured COVID-19 patients. A portal for providers to apply for that reimbursement launched Monday.

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The nearly 400 hard-hit hospitals accounted for 71% of COVID-19 inpatient admission reported to HHS, the department said. The state with the most hospitals receiving this funding is New York at 90. New Jersey is next on the list at 53, followed by Illinois at 33 and Michigan at 30.

Hospitals in rural areas are at some of the highest risk of closing during the pandemic, and those geographies are facing increased rates of infection

Rural hospitals are often the closest point of care for millions of Americans living in isolated regions. Local health systems power economies, oftentimes as an area’s largest employer, and drive other businesses and jobs to those communities. 

But the smaller systems are budget-strapped, and many have been unable to keep up with technological trends, lacking capital to invest in updated, innovative technology, such as EHRs, telehealth and advanced imaging platforms.

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