Hospitals face payroll, supply chain problems as Congress hammers out stimulus package

Both the AH&LA and AAHOA released statements in support of the President’s call for bipartisan efforts to improve border security and ongoing job growth.
Hospital leaders say they need Congress to provide direct financial assistance to facilities that are straining to meet payroll as COVID-19 cases increase. (Getty Images/Bill Chizek)

Several hospitals said they may not make payroll in the next few weeks as Congress debates whether to give the industry a cash infusion to combat the growing number of COVID-19 cases.

On a call led by the American Hospital Association (AHA) Saturday, three hospitals said they are weeks away from running out of money and don’t have the cash to buy critical supplies such as personal protective equipment. The comments come as the AHA and several other groups want Congress to add $100 billion in direct assistance to hospitals in the economic stimulus package expected to be voted on next week.

“We are now at a negative cash position and using credit,” said J. Scott Graham, CEO of Three Rivers and North Valley hospitals in Washington state. “We will exhaust all avenues to make payroll in the next three to four weeks.”

Hospitals have been in a bind financially as they ramp up for treating more COVID-19 cases and shut down elective surgical procedures, which are the biggest moneymakers for hospitals.

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Another problem is that some hospitals are not going to be able to go to banks for a line of credit.

“We can’t borrow more money to get through this,” said LaRay Brown, president and CEO of safety net hospital One Brooklyn Health System in New York City.

But it remains unclear what type of assistance Congress will provide to hospitals.

Senate Republicans released a package that temporarily ends the sequester cuts to Medicare and boosts Medicare payments for COVID-19 cases, but it does not include the $100 billion the AHA, the American Medical Association and the American Nurses Association asked for earlier this month.

AHA officials were not concerned about the lack of direct funding for hospitals in the GOP proposal.

“That is just a first step,” said Tom Nickels, executive vice president of government relations and public policy for the AHA. “That document is not relevant right now because it has been massaged through negotiations.”

Senate Majority Leader Mitch McConnell said earlier this week that he hoped to finalize talks and vote on a final package on Monday.

Nickels said it remains unclear how much of the $100 billion would go toward helping hospitals meet payroll.

“We haven’t gotten to a point in the negotiations on what percentage goes to what, but that is an ongoing conversation,” he said on the call.

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