HHS allocates another $4B in COVID-19 relief funds to rural facilities, safety net hospitals

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The Department of Health and Human Services doled out an additional $4 billion to safety net hospitals and suburban providers. (iStock/Getty Images Plus/wildpixel)

The Department of Health and Human Services (HHS) is allocating approximately $3 billion to safety net hospitals and another $1 billion in COVID-19 relief funds to certain rural providers and others in small metropolitan areas.

The announcement Friday comes as the novel coronavirus is hitting record highs in several Sunbelt states. HHS hopes the latest allocation is more targeted to certain providers hit hard by the pandemic. The money comes from a $175 billion fund passed by Congress a few months ago.

“Close work with stakeholders informed how we targeted this new round of funds to hard-hit safety-net and rural providers,” said HHS Secretary Alex Azar in a statement Friday.

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June 9, the agency announced a plan to distribute $10 billion to safety net hospitals.

But HHS found that some acute care hospitals didn’t qualify for the funding, so it is expanding the threshold for payment qualification. An acute care hospital that has a profitability threshold of less than 3% over two or more of the last five cost reporting periods can now qualify for the safety net funding.

“HHS expects to distribute over $3 billion across 215 acute care facilities, bringing the total payments for safety-net hospitals from the Provider Relief Fund to $12.8 billion to 959 facilities,” a release said.

The agency also plans to expand the number of providers that can qualify for rural relief.

Back in May, HHS announced $10 billion in funding to almost 4,000 rural healthcare providers that include hospitals and clinics.

Now it has expanded its existing payment formula for that funding to include “special rural Medicare designation hospitals in urban areas as well as others who provide care in smaller, non-rural communities,” the agency said in a release.

The change means that some suburban hospitals not considered rural but serve rural populations can be included.

“They too, have suffered in this pandemic, which is why HHS is responding,” the agency said. “HHS estimates the funding announced today will provide relief of over $1 billion to 500 of these hospitals with payments ranging from $100,000 to $4,500,000 for rural designated providers and $100,000 to $2,000,000 for the other providers.”

HHS also will allow dentists eligible for funding via the Provider Relief Fund to apply. 

The announcement is the latest installment of funding. HHS has previously doled out funding in dedicated tranches to Medicaid and rural providers. 

So far, HHS has committed more than $115 billion in funds to providers out of the $175 billion that Congress approved, a senior HHS official said. The funding was approved to combat a massive financial crisis caused by lower patient volume and the cancellation of elective procedures.

Providers still have to attest that they want to receive the funds and agree to the terms and conditions. Of that $115 billion, providers have attested to $60 billion.

HHS has made a change to the terms and conditions for the funding to give providers more time to comply with the administrative requirements the terms carried with them, one official said.

The agency is also working on developing more funding to providers in COVID-19 hot spots. The agency sent out a survey mor than a month ago to get insights into COVID-19 cases. Since that survey there has been a steady climb in several sunbelt states such as Florida, Texas and Arizona.

HHS was also surprised at the low number of funding it has given out to cover uninsured claims for COVID-19 costs.

So far, the agency has given hospitals $340 million for uninsured claims.

“That is less than we had expected to distribute,” an official told reporters on a Friday call.

One theory is that HHS relies on providers to submit a claim for reimbursement for treating the uninsured.

“We are very actively trying to communicate to hospitals and clinicians to increase the awareness of this opportunity and make certain they know this reimbursement opportunity exists,” one official said.

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