As HHS releases another $2B in COVID relief payments, hospitals call for Congress to cover delta, omicron expenses

The Department of Health and Human Services said it is releasing more than $2 billion in Provider Relief Fund payments this week to 7,600 provider organizations facing financial shortcomings due to the COVID-19 pandemic.

The money follows a December distribution of nearly $9 billion, with both falling under $17 billion fourth phase of the Health Resources and Services Administration’s (HRSA’s) relief program.

In total, the federal government has distributed Phase 4 payments to over 74,000 providers across the U.S. and its territories since December, according to the agencies. These relief payments are also accompanied by $7.5 billion HRSA funds distributed to more than 43,000 rural providers since December as part of the American Rescue Plan.

“Provider Relief Fund payments have served as a lifeline for our nation’s heroic health care providers throughout the pandemic, helping them to continue to recruit and retain staff and deliver care to their communities,” HHS Secretary Xavier Becerra said in a statement. “This funding is just the latest example of the Biden-Harris administration’s dedication to ensuring that providers continue to have the resources they need to meet the evolving challenges presented by COVID-19 and keep providing critical services to the American people.”

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With today’s announcement, approximately $6 billion in PRF Phase 4 General Distribution payments remain to be allocated for COVID-19-impacted providers. HHS said that roughly 18% of Phase 4 applications still need to be processed.  

HHS opened applications for both the PRF and American Rescue Plan funds back in September.

PRF Phase 4 would focus on recouping changes in operating revenues and expenses with bonus payments based on the amount and type of Medicare, Medicaid and Children’s Health Insurance Program (CHIP) services provided from July 1, 2020 to March 31, 2021, according to the agency. Of note, smaller providers would be reimbursed for a high percentage of the changes in their operations.

ARPA funds, meanwhile, aimed to compensate providers based on the amount and type of Medicare, Medicaid and CHIP services they provided to rural patients between Jan. 1, 2019, and Sept. 30, 2020.

The latest wave of PRF distributions land as hospital organizations are ramping up their calls for federal financial relief.

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In a press call Tuesday morning, American Hospital Association (AHA) leadership and the heads of three member health systems underscored the strain new waves of COVID-19 and the ongoing labor shortage have had on their balance sheets.

Echoing comments made in a letter sent to Congress sent last week, AHA President and CEO Rick Pollack said that hospitals need the Biden administration to “immediately” wrap up distributions of the Phase 4 relief funds. Further, he called for Congress to allocate an additional $25 billion to the $178 billion Provider Relief Fund established back in 2020, which to date has only comped providers for pandemic costs incurred through March 2021.

“While this fund has been a lifeline for some healthcare providers, no distributions have been made or announced for expenses related to the delta or omicron surges … despite decreases in deaths, hospitalizations and cases,” Pollack said during the press call.