FAH: Hospital closures loom if feds don't distribute more cash to fight COVID-19

hospital money
The Federation of American Hospitals says hospitals are at high risk of closure due to the high cost of COVID-19. (Getty/PraewBlackWhile)

Hospital finances are on life support as the COVID-19 pandemic continues.

And without a quick windfall from the feds, many could shutter permanently, according to a new report.

The brief (PDF) from the Federation of American Hospitals (FAH) outlines the many ways they’re taking a hit, and the group is urging federal officials to step in quickly or risk closures, especially for rural facilities.


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Hospitals are facing a one-two punch of financial struggles, according to the report. A rise in patients seeking care for COVID-19 in tandem brings a rise in uncompensated care, while the number of other procedures has plummeted.

“These extraordinary pressures are putting hospitals, particularly in rural areas, at increased risk of closure,” FAH said. “Absent swift federal intervention, many of these hospitals may never reopen and communities may lose access to vital services.”

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FAH’s pleas for cash come as controversy is brewing on just how the Trump administration is distributing currently available funding.

Congress’ stimulus packages have earmarked billions for hospitals, but the Department of Health and Human Services (HHS) is distributing those funds based on providers’ historical piece of Medicare payments and not their need amid the pandemic.

This has led to, as New York Gov. Andrew Cuomo tweeted over the weekend, hospitals in hard-hit New York receiving just $12,000 per COVID-19 case while other states, such as Montana, are receiving as much as $300,000 per case.

Health systems and state leaders have decried HHS’ approach to distributing the initial $30 billion in funding. An HHS spokesperson defended the methodology in a statement to FierceHealthcare, saying using Medicare data allowed the agency to get the money to providers more quickly.

The spokesperson said that HHS will dispense further monies in the near future to the areas hit hardest by COVID-19.