AHA Asks for an Immediate $25K Per Hospital Bed to Combat COVID-19

April 02, 2020 - COVID-19 is having a significant impact on hospital operations and ultimately bottom lines, but groups like the American Hospital Association (AHA) are trying to get financial support to hospitals as quickly as possible.

For more coronavirus updates, visit our resource page, updated twice daily by Xtelligent Healthcare Media.

In a Mar. 31 letter, the association representing nearly 5,000 hospitals, health systems, and other healthcare organizations called on HHS and CMS “to directly and expediently distribute to rural and urban hospitals and health systems funds from the Public Health and Social Services Emergency Fund that were designated for providers in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.”

Congress passed the CARES Act last week as part of a historic $2 trillion coronavirus stimulus package. The act includes $100 billion in grants for hospitals and health systems, which are struggling to make ends meet as the novel coronavirus spreads and revenue-driving procedures like elective surgeries are canceled.

The act also aims to help hospitals and other frontline providers by increasing Medicare rates for COVID-19 hospitalizations by 20 percent, suspending the 2 percent Medicare sequestration through the end of the year, delaying Medicaid Disproportionate Share Hospital payment (DSH) reductions, and allowing for upfront Medicare reimbursements.

READ MORE: How Much Will the COVID-19 Pandemic Cost Hospitals?

AHA is now focused on getting the billions of dollars earmarked for hospitals and health systems into the hands of the providers delivering care to those impacted by COVID-19.

“As you are aware, hospitals are in a crisis situation and time is of the essence. Thus, we ask you distribute these funds directly to providers,” Richard J. Pollack, AHA president and CEO, wrote in the letter.

The coronavirus stimulus package stated that the funding for hospitals and health systems would be distributed on a rolling basis through “the most efficient payment systems practicable to provide emergency payment.”

But AHA urged HHS and CMS to use Medicare Administrative Contractors (MACs) to distribute funds directly to providers, which has been done in the past during relatively similar situations.

“In past, relatively similar situations, Medicare Administrative Contractors (MACs) have been used to pay claims and distribute monies directly to providers for purposes other than Medicare payment (e.g., Section 1011). We believe that again using the MACs to process applications and make payments either to individual hospitals or to a health system for all of its hospitals is appropriate,” Pollack stated.

READ MORE: 80% of CFOs Expect Revenue, Profit Declines Due to COVID-19

And while the application process is in the works, HHS and CMS should direct MACs to immediately distribute funds to hospitals at a rate of $25,000 per bed and $30,000 per bed for hospitals in “hot spots,” Pollack added.

The association also urged the top health officials to make funding available to all types of hospitals, including inpatient rehabilitation and inpatient psychiatric facilities, which according to the AHA are also “incurring expenses related to COVID-19 as they work to treat patients and expand the capacity of the health care system.”

These funds should go to helping hospitals pay for activities related to surge capacity for COVID-19, as well as expenses related to ensuring an adequate workforce, lost revenue attributable to the virus, and other healthcare-related costs, such as managing and treating persons under investigation, hotel and housing costs for patients, interest charges on accelerated Medicare payments and loans, and mortuary services if needed.

The AHA supports the CARES Act, calling it “an important first step” in a statement after the Senate passed the stimulus package. However, the association still feels “more will need to be done to deal with the unprecedented challenge of this virus.”

In another attempt to ensure frontline providers receive the financial assistance they need to combat COVID-19, the AHA and two other industry groups also recently urged the Internal Revenue Service (IRS) for an automatic tax-filing extension for 501(c)(3) organizations – a type of non-profit exempted from federal income tax section 501(c)(3).

READ MORE: Hospitals to Lose $1K Per COVID-19 Case Despite Medicare Rate Bump

The Trump administration has already extended the federal income tax return filing due date for individuals and businesses from April 15 to July 15. The AHA, Association of American Medical Colleges, and Catholic Health Association of the United States believe tax-exempt hospitals should have similar relief.

“Hospitals and health systems are on the front lines in responding to and meeting the needs of communities as they confront the COVID-19 pandemic,” the groups wrote in the April 1 letter. “This unprecedented effort has disrupted normal clinical and management operations in unforeseen ways. At this time, all resources must be made available to meet the demands of the health and economic emergency we face.”

The groups also asked the IRS to not penalize hospitals that must delay community health needs assessments or implementation plans due to COVID-19.

Hospitals and health systems continue to face unprecedented challenges with combatting COVID-19. At the time of publication, data from Johns Hopkins University shows over 216,700 confirmed cases of the virus, making the US the top country by number of confirmed cases.

As the virus rapidly spreads throughout the US, providers are struggling to manage the influx of patients while keeping operations running. The stimulus package and other recent waivers are some of the first steps the administration is taking to help frontline providers. The administration has promised more to come for all those affected by the virus.