June 26, 2020

COVID-19 Provider Relief Fund


KEY TAKEAWAYS

  • The CARES Act provided $100 billion to help America’s health care system respond to the coronavirus pandemic. Congress added another $75 billion in the Paycheck Protection Program and Health Care Enhancement Act.
  • HHS is distributing this money through the provider relief fund to hospitals and other health care providers.
  • Funds have been allocated to physicians and hospitals that take Medicare patients, certain Medicaid and Children’s Health Insurance Program providers, qualifying safety net hospitals, and rural health care providers. 

Hospitals throughout the country have been under financial strain due to the cost of providing treatment for coronavirus patients. At the same time, many health care providers have lost a significant amount of revenue because they have canceled or postponed non-emergency services in order to slow the spread of coronavirus. Hospitals also may have funding shortfalls because they have dedicated a lot of their resources to coronavirus response. The Coronavirus Aid, Relief, and Economic Security Act, which President Trump signed into law on March 27, provided $100 billion to the Department of Health and Human Services for a provider relief fund to support America’s health care system as it deals with the pandemic. On April 24, the Paycheck Protection Program and Health Care Enhancement Act added another $75 billion to the fund. So far, HHS has allocated more than $100 billion to providers.

How the relief fund works  

The CARES Act made funds available to reimburse health care providers for coronavirus related expenses, including: lost revenue; surge capacity; medical supplies and equipment, such as personal protective equipment and testing supplies; increased workforce and training; emergency operation centers; construction of temporary structures; and leasing of properties. In addition, HHS Secretary Alex Azar has said that a portion of the initial $100 billion Congress provided will be used to reimburse providers, generally at Medicare rates, for testing and treating uninsured patients for COVID-19.

Because of the capacity restraints the pandemic has placed on health care providers, patients may have to seek care out of their insurance network. To get relief funds, providers agree to not charge patients more out of pocket for their coronavirus treatment than their insurance provider agrees to pay in-network.

CARES Act Provider Relief Fund Distribution Timeline

Distribution Timeline

disbursement to providers

Distributions to health care providers from the fund are grants, not loans, and do not have to be paid back. On April 10, an initial $30 billion in grants was distributed to eligible hospitals, physician practices, and other providers in proportion to their Medicare fee-for-service billings in 2019. An additional $20 billion was allocated beginning April 24 to nearly 15,000 providers based on their share of net patient revenue. HHS worked with UnitedHealth to distribute these payments to providers. Providers were given a deadline of June 3 to submit revenue information and request funding from the second tranche of this general distribution.

After the general distribution, HHS allocated $12 billion to “high impact” providers based on the number of COVID-19 patients admitted to these hospitals. A hospital had to have at least 100 COVID-19 admissions to be eligible for this distribution. The department allocated another $10 billion to rural acute general hospitals, rural health clinics, critical access hospitals, and community health centers based in rural areas, based on the facility’s reported operating expenses. HHS also has allocated $4.9 billion to skilled nursing facilities and roughly $500 million to tribal hospitals, clinics, and urban health centers.

Safety net hospitals have been allocated $10.2 billion in relief funding. These hospitals provide care to a large number of Medicaid beneficiaries and uninsured patients. HHS recently announced a targeted allotment of approximately $15 billion to certain providers that participate in state Medicaid programs and the Children’s Health Insurance Program. To be eligible for this funding, providers must not have received payment from the initial $50 billion general distribution.

Issue Tags: COVID-19, Health Care