AAMC to HHS: Hospitals need cash now to stave off more furloughs, expand capacity

A photo of the exterior of a hospital on a sunny day
Hospital and health system associations are imploring the U.S. Department of Health and Human Services to dole out direct assistance to hospitals facing immediate cash flow concerns. (Steve Design/Shutterstock)

Medical groups and providers are calling for cash from the massive stimulus package to be sent directly to hospitals and physicians. Now.

The $2 trillion economic stimulus package passed last week included $100 billion for providers to get through the COVID-19 outbreak.

But that funding can't come soon enough.

This week, several major hospital systems such as Tenet Healthcare and Trinity Health announced furloughs as finances have dwindled due to low patient volume and cancellation of elective procedures even as hospitals work to ramp up capacity to respond to the pandemic.

“We need to get dollars right down to the hospital as soon as possible,” said Jan Orlowski, chief healthcare officer for the American Association of Medical Colleges, on a call with reporters Friday.

RELATED: Trinity Health latest major hospital system to furlough workers due to COVID-19 cash crisis 

The association has spoken with the U.S. Department of Health and Human Services on the need to rapidly send out payments to financially strapped hospitals.

“We have given some thoughts on the dollars going to areas where there is increased complexity and increased vulnerable population and capacity for high-number of [intensive care unit] beds,” Orlowski said.

Providence Health, a 52-hospital system that stretches across seven states, has not had to furlough workers yet but told FierceHealthcare it is being hurt financially.

“We really are hopeful about the funding that is included in the [stimulus] not only for hospital systems but for independent physicians and medical groups, many of which rely on elective surgery practices,” said Ali Santore, group vice president of government and public affairs for Providence. “When revenue is down to zero due to cancellation of elective surgeries that is problematic to the medical community and their staff.”

She said that another concern is immediate cash flow for the system’s hospitals.

RELATED: Healthcare lost 43K jobs in March, latest Bureau of Labor statistics report shows

Providence is currently looking at getting access to accelerated Medicare payments. The Centers for Medicare & Medicaid Services announced earlier this week it will expand its accelerated and advance payment program for Medicare to all providers across the country.

The program provides expedited payments to providers and normally is deployed for natural disasters to boost cash flow.

But some groups are wondering whether that is quick enough to help hospitals that are trying to expand workforce to staff makeshift hospitals and expanded capacity.

“The issue when you expand beds is where does the workforce come from because we don’t clone workforce,” Orlowski said.

The American Medical Group Association, which represents medical groups and health systems, wrote to Trump administration leaders Wednesday asking for medical groups to get access to the Paycheck Protection Program, which provides up to $349 billion in forgivable loans to businesses throughout the COVID-19 emergency.

The program currently doesn’t allow providers with more than 500 employees to access the loans.

Providers need access to other financing tools while they wait for the money to be dispersed, the group added.

The paycheck program will “enable our members to survive and deliver care to their patients,” the letter to Treasury Secretary Steven Mnuchin and Small Business Administration head Jovita Carranza said. “Without these funds, layoffs will continue, some groups will cease operations and care will be compromised, all occurring during a public health emergency.”

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