Health Law & Business News

New Covid Hospital Aid Targets Rural Areas, Vulnerable Groups (1)

July 10, 2020, 7:10 PMUpdated: July 10, 2020, 9:06 PM

Hospitals in rural areas or those that serve a large share of uninsured or poor patients will have access to some $4 billion in targeted aid to battle Covid-19, the HHS announced Friday.

The distributions are another step in federal officials’ attempts to get Congress-approved pandemic assistance to hospitals most in need. The tranche announced Friday will adjust criteria so that the money goes to hospitals that serve vulnerable populations—often poor, uninsured, and mostly minorities—either for free or on lower Medicaid rates.

Even in non-pandemic times, those hospitals operate on razor-thin margins. Some of these facilities were left out of earlier distributions because they have fewer patients in the Medicare system, which was the first method used to quickly distribute funds in the spring as instances of Covid-19 became more prevalent in the United States. Officials tapped Medicare first because it was the quickest way of getting money to providers.

The Department of Health and Human Services said it expects to distribute over $3 billion to 215 acute-care facilities, bringing the total payments for safety-net hospitals from the Provider Relief Fund to $12.8 billion for 959 facilities.

A senior official in the Department of Health and Human Services said during a press briefing that officials learned that under the original method of distributing funds that some acute care hospitals did not qualify for funding “even though they are viewed and serve as critical safety net facilities within their community.”

Qualifications for payments will be revised such that acute-care hospitals can get money if they have profitability threshold of less than 3% averaged consecutively over two or more of the last five cost reporting periods.

Rural Providers, Dentists

An additional $1 billion will be allotted to rural or semi-rural hospitals or health clinics with smaller profit margins and limited resources, including some suburban hospitals that aren’t considered rural but serve rural populations.

About 500 of these hospitals will each receive $100,000 to $4.5 million in aid, HHS said. Other facilities like heath clinics or health centers can expect payments ranging from $100,000 to $2 million.

Dentists will also be eligible for aid under this current distribution, the HHS said.

Rick Pollack, president and chief executive officer of the American Hospital Association, said hospitals with high Medicaid volume provide care to the most vulnerable patients and communities, many of which have suffered disproportionately from this virus.

“Even before the pandemic these hospitals operated under serious financial pressure, and these funds will help them continue to stay open and provide care to all who need it,” he said.

He also said the funds would help financially struggling rural hospitals continue to provide care for patients close to home.

At the same time, the hospital industry group urge the HHS to send remaining emergency funds as soon as possible to hospitals and health systems on the front lines of the Covid-19 pandemic.

The funding announced Friday adds to the $10 billion the HHS announced last month to safety net hospitals, the senior HHS official said.

The latest funding announcement means the department has committed more than $115 billion of the $175 billion Congress has provided in coronavirus relief money. About $61 billion has been delivered to medical providers that have agreed to the terms and conditions of the funding, the senior HHS official said.

Providers have up to 90 days to accept the terms and conditions of the funding.

(Updated with additional details throughout. )

To contact the reporters on this story: Fawn Johnson in Washington at fjohnson@bloomberglaw.com; Jeannie Baumann in Washington at jbaumann@bloomberglaw.com

To contact the editors responsible for this story: Karen Ertel at kertel@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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