Safety net hospitals to Congress: Give us more targeted funding, changes to DSH and 340B to combat COVID-19

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.
Safety-net hospitals are pressing Congress to adopt a series of Medicaid policy changes in addition to more funding. Image: Getty Images/Bill Chizek

A group representing safety net hospitals made a list of requests to Congress to shore up their shaky finances to combat COVID-19.

America’s Essential Hospitals, which represents safety-net hospitals that primarily rely on Medicaid and disproportionate share payments, sent a letter on Monday to congressional leaders debating the next step in economic stimulus. In addition to more funding, the group pressed for regulatory changes and help for the controversial 340B drug discount program.

The group criticized the method that Health and Human Services used to disperse $30 billion in funding to providers because the agency allocated it based on Medicare funding.

The process “clearly disadvantages essential hospitals and other providers with below-average Medicare volumes and disproportionately high Medicaid and low-income volumes,” the letter said. “In fact, some of the hospitals caring for the largest influx of COVID-19 patients in hotspots will get minimal funding in the first tranche of emergency fund payments.”

The money is part of a $100 billion fund that was passed as part of Congress’ last economic stimulus bill a few weeks ago.

AEH calls for more emergency funding for hospitals. Democratic congressional leadership has also called for more money, pushing for an additional $250 billion but they are in a standoff with Republicans.

Any new distribution of funding should use a combination of metrics including the percentage of hospital patients on charity care and the uncompensated care burden, AEH said.

HHS told FierceHealthcare that it relied on Medicare spending for the $30 billion in order to get the money faster to providers rather than go through an application process. The agency said that more targeted funding is coming.

But the group called for Congress to make a series of other regulatory and policy changes, including:

  • Temporarily increasing the Medicaid disproportionate share hospital payment allotments to each state by 3%. The DSH payments are made to hospitals to cover charity care.
  • Blocking a proposed rule from CMS that would enable the agency to better monitor and enforce requirements on state Medicaid spending. AEH opposes the rule as it would undermine state flexibility and could lead to spending cutbacks.
  • Allowing hospitals to maintain eligibility in the 340B drug discount program, which requires drug companies to give discounts on products to safety-net hospitals in exchange for participation in Medicaid.
  • Enabling access to 340B drugs for patients that are treated through telehealth. Congress can clarify the 340B are available to covered entities regardless of the patient’s physical location. CMS has cut payments to the program by nearly 30%, which has been overturned in court, as drug companies argue that the program has gotten too large but providers say is necessary to continue access to drugs with spiraling high prices.
  • Holding teaching hospitals harmless for any temporary increase in beds via excluding those beds from affecting a hospital's indirect medical education payments.
  • Letting public hospitals take advantage of a payroll tax credit for employers to offset paid and family medical leave to employees.

Several hospital groups have also pressed Congress to re-up hospital funding.

“America’s hospitals and health systems urgently need an additional infusion of resources to support the nurses, doctors, and staff on the front lines of the battle against COVID-19,” said Rick Pollack, president and CEO of the American Hospital Association, in a statement late Monday.

The Federation of American Hospitals also said in a statement that the $100 billion fund is "unfortunately nowhere near enough."

Hospitals are not the only ones pressing for more funding as Congress debates its next steps to combat COVID-19.

The American College of Physicians sent a letter Monday to congressional leaders that calls for more funding that is prioritized to support physician practices in the greatest need. The group also pressed for loan forgiveness and tuition relief for medical students as well as a new program to give interest-free loans and other mechanisms specifically for practices.

Suggested Articles

Major health groups raised alarm following the announcement by President Donald Trump that the U.S. is terminating its relationship with WHO.

The COVID-19 pandemic is proving to be a “great equalizer” for behavioral health. And that's a trend an expert at Teladoc expects so see continue.

A greater number of health systems may fall short of agreements tied to their borrowing compared to prior years, according to a new report.