Safety-Net Hospitals Appeal for More Targeted Covid-19 Funding

The nation’s struggling safety-net hospitals are cheering provider relief proposals in the recently passed House continuing resolution to fund the government. But they remain adamant that more direct funding is needed to successfully weather the pandemic.

Along with keeping the government operating through Dec. 11, H.R. 8337, would relax repayment terms for hospitals and other providers on Medicare advance payment loans. The bipartisan measure, which now awaits Senate action, would also delay a $4 billion cut in hospital uncompensated care payments.

Both provisions will benefit safety-net hospitals, which serve large numbers of uninsured and low-income Medicaid patients. But those facilities still need more because of their sicker, poorer, and costlier patient base and their mission to provide care regardless of a patient’s ability to pay, said Beth Feldpush, senior vice president of policy and advocacy at America’s Essential Hospitals, which represents nonprofit, safety-net facilities.

That’s after the Department of Health and Human Services steered $13 billion in CARES Act provider relief funds directly to safety-net hospitals.

“It has been very helpful,” Feldpush said of the targeted funding. “But it is not enough.”

Falling Through the Cracks

She said many of her organization’s 300-plus member hospitals have received no CARES Act funding at all. The group wants the HHS to once again target safety-net providers in future relief fund distributions.

“Our advocacy message right now to HHS is to ensure that when the department pushes out the next round of funding, that they really target those safety-net institutions that have fallen through the cracks thus far in receiving targeted funding,” she said.

Feldpush said some hospitals didn’t meet each of three different operational metrics necessary to qualify for the CARES Act safety-net funding. Others didn’t qualify because they weren’t located in a Covid-19 “hotspot” with high infection rates. Some missed out because their Covid case count didn’t peak until after a June 10 cutoff date to be eligible for the most recent round.

Many of these facilities are in Florida, Texas, Arizona, and other southern and Sun Belt states where Covid infection rates only began to spike in July, Feldpush said.

The Medicare Payment Advisory Commission recently found that for-profit hospitals have fared better than nonprofits during the pandemic because they’ve been able to cut more expenses to offset declines in revenue stemming from the moratorium on elective surgeries and non-emergency procedures.

The commission’s research showed that three large nonprofit hospital systems were only able to offset 1% of their 2020 second-quarter revenue losses—about $13 million—through cost reductions. But four large for-profit systems reduced expenses by $2.3 billion, which offset 65% of their lost second-quarter revenue.

Difficulty Cutting Costs

Nonprofit safety-net hospitals, have a much tougher time shedding costs, Feldpush said. Many have large teaching programs for residents, clinicians, nurses, and other health professionals. On average, these facilities train about four times as many physician residents as all other hospitals.

“You cut back on electives or other services, but you still have these overhead costs because of that teaching mission,” Feldpush said.

Patients at safety-net hospitals typically need more “wrap-around services,” like translators and social workers, due to socio-economic factors like poverty, homelessness, and food insecurity.

“Our hospitals need those staff, so they can’t be furloughed or laid off any more than a nurse could be,” Feldpush said “That intersection of who they care for and what services they provide really impacts their ability to cut costs.”

Safety-net hospitals also typically provide high-intensity services, like trauma care, burn treatment, and organ transplants, which means they must maintain capacity to care for patients with life-threatening illnesses unrelated to Covid-19.

“So you need standby capacity to make sure you have specialists there on call, 24 hours a day. If you run a trauma center, those are fixed costs,” she said.

In a statement Sept. 22, Bruce Siegel, president and CEO of America’s Essential Hospitals, urged Congress and the Trump administration to boost support for hospitals.

“While we appreciate the relief in the continuing resolution, we also call on Congress and the administration to provide more support for hospitals, especially as the nation faces a predicted increase in COVID-19 cases this fall and winter,” Siegel said.

“We must ensure essential hospitals on the front lines of the COVID-19 pandemic have the resources they need to respond effectively to this public health emergency,” he said.