GAO Pushes HHS to Reveal Plans for Unused Provider Relief Funds

July 22, 2021 - The Government Accountability Office (GAO) is recommending that HHS communicate information of the department’s plans for unused Provider Relief Fund money.

A report released publicly on July 19th found that about a quarter of Provider Relief Fund appropriations from coronavirus-related legislation remained unobligated as of May 31, 2021. That equates to approximately $43.7 billion of $178 billion, GAO reported.

The Health Resources and Services Administration (HRSA), an agency within HHS, has not provided time frames for distributing this balance despite HHS submitting spend plans to Congress per federal law, according to the report.

“Of the unobligated funds, according to HHS’s October 2020 spend plan, HRSA reserved a portion of the provider relief funds to respond to needs not identified in the spend plan, and in May 2021 HHS officials told us that the reserved funds were approximately $24 billion,” the report stated.

“HHS has not specified time frames for obligating these reserved funds or for the other $29.1 billion in unobligated provider relief funds. In addition, ARPA [American Rescue Plan Act] appropriated an additional $8.5 billion for rural providers, and as of May 31, 2021, all these funds remained unobligated.”

Additionally, GAO found that about 66 percent ($40.2 billion of $61.4 billion) of funds that HHS reported for testing activities remained unobligated.

In light of the unused money, GAO has advised HHS “[t]o communicate information about and facilitate oversight of the agency's use of COVID-19 relief funds.” This includes projected time frames for the planning spending of COVID-19 relief funds for providers as part of the spend plans HHS already submits to Congress.

HHS partially agreed with GAO’s recommendation. The federal department told GAO that it would “aim to incorporate some time frames on planned spending where such information may be available, such as time frames for select grants to states.”

“However, HHS officials stated that they would not be able to provide specific time frames for all relief funds since the evolving environment requires the department to remain flexible in responding to incoming requests for response activities. For example, HHS cited field management activities that can change quickly depending on the incoming response requests,” the report continued.

GAO said that providing projected time frames would not create barriers to the HHS’ flexibility considering the department’s spend plans are updated every 60 days.

“Offering projected time frames to spending would give Congress useful information to help ensure relief funds are spent in an expedient and timely manner, as well as help inform future funding decisions,” GAO stated.

Healthcare providers have been waiting on HHS to release unused Provider Relief Funds and other COVID-19 appropriations for healthcare facilities and providers. Providers continue to feel financial pressure from the ongoing COVID-19 pandemic despite significant gains in vaccinations.

However, the Biden-Harris administration has indicated that it plans to use unused COVID-19 relief funds to support a $1.2 trillion infrastructure package—a move hospital groups are opposing.

“We understand that addressing core infrastructure needs can allow us to continue to serve our communities and our patients,” six groups, including the American Hospital Association (AHA) and American Medical Association (AMA), wrote in a letter to top lawmakers last week.

“However, we are opposed to the use of an extension of mandatory Medicare sequestration as a pay-for in any infrastructure package. Additionally, we do not believe that Medicare funds should be used to pay for non-health care programs.”