AHA Asks for Another $50B in Coronavirus Relief for Hospitals

June 08, 2020 - The American Hospital Association (AHA) is asking HHS to distribute another $50 billion in coronavirus relief funds as hospitals continue to feel the financial pressure of responding to COVID-19.

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“[W]e urge HHS to distribute additional funds to all hospitals, as well as to ‘hot spot’ hospitals and hospitals serving high numbers of Medicaid and uninsured patients. At the same time, it should work to create a process by which to then reimburse eligible hospitals and health systems for health care-related expenses or lost revenues attributable to COVID-19 through a direct application process,” Rick J. Pollack, president and CEO of the AHA, stated in a June 2nd letter to HHS Secretary Alex Azar.

Specifically, hospitals in COVID-19 hotspots and those that treat higher numbers of Medicaid and uninsured patients should each receive an additional $10 billion in coronavirus relief funds. The remaining $30 billion should be for general distribution to all hospitals, including rural and urban short-term acute care, long-term care, and critical access hospitals, the association recommended.

Congress has already earmarked $175 billion in coronavirus relief funds specifically for healthcare providers. That includes a $50 billion in general allocation payments to all providers impacted by COVID-19 and targeted allocations of $10 billion to hospitals in COVID-19 hotspots and $10 billion to rural providers.

Hospitals and other providers have already received tens of billions of dollars in the coronavirus relief funds, including an automatic distribution of $30 billion from the general allocation pool of payments. HHS released another $20 billion from the pool mid-April.

But hospital groups have criticized how the federal government has doled out payments to providers in dire need of financial support.

In order to get coronavirus relief funds to providers quickly, HHS based general distribution disbursements based on Medicare billings and net patient revenue from the recent past. This has led to hospitals with higher operating margins and private payer revenue to receive a larger portion of the funds, according to a recent report from Kaiser Family Foundation.

Hospital groups have spoken against the methodology, arguing that using Medicare and patient revenue as a basis for coronavirus relief distribution disadvantages certain hospitals, including those that treat a disproportionate number of Medicaid and uninsured individuals.

The groups have also repeatedly stressed to policymakers that, despite a multi-billion-dollar fund created for providers, more emergency payments are needed to sustain operations and clinical functions during and after the pandemic.

Future coronavirus relief funds should be distributed in an equitable manner, such as by the number of beds, the AHA stated in the letter. HHS employed a similar approach when it recently disbursed $4.9 billion in emergency payments to skilled nursing facilities impacted by COVID-19.

For hospitals in COVID-19 hotspots, HHS should also consider determining the amount of coronavirus relief payments based not only on the most recently available data on the raw number of admissions, but also the portion of a hospital’s COVID-19 admissions.

The AHA also suggested that HHS use the application process it created for disburse funds to hospitals and health systems based on their COVID-19-related expenses and lost revenue.

“We believe that processing applications and making payments either to individual hospitals or to a health system for all of its hospitals is appropriate. Health systems are often best suited to manage the monies and prioritize needs within their system,” the association explained.

Providing hospitals and health systems with those flexible emergency payments will ensure the organizations can keep their doors open, AHA stressed.

HHS recently provided another $250 million to aid health system responses to COVID-19. The funds were awarded through the department’s Office of the Assistant Secretary for Preparedness and Response to help fund workforce training, telemedicine and virtual care, supply procurement, and care coordination efforts related to COVID-19.

But whether more substantial funding will be given to hospitals in the future is still unclear. Both sides of Congress have debated additional coronavirus stimulus packages, but many of those efforts have recently stalled.