HHS rolls out $7.5B in COVID-19 relief funds to rural providers

rural Virginia
The Department of Health and Human Services has started distributing $7.5 billion in COVID-19 relief funding to rural providers passed under the American Rescue Plan Act. (Getty Images)

The Department of Health and Human Services (HHS) has started to roll out $7.5 billion in COVID-19 relief funds to providers and suppliers in rural areas after taking heat from lawmakers over the slow distribution of remaining funds.

HHS announced Tuesday the money appropriated under the American Rescue Plan Act will go to more than 40,000 rural providers.

“The infusion of these funds will be critical to ensuring rural communities maintain access to high-quality healthcare and addressing urgent needs like workforce recruitment and retention,” said HHS Secretary Xavier Becerra in a statement.

HHS said the average payment sent to rural providers will be approximately $170,700 as payments could range from $500 to $43 million.

The payments will be based on Medicare, Medicaid and Children’s Health Insurance Program (CHIP) claims for services to rural providers stretching from Jan. 1, 2019, through Sept. 30, 2020.

“This period was chosen as it represents the most recent comprehensive data available to HHS and takes into account both pre-pandemic and pandemic operations,” HHS said in a release on the funding distribution. “Every eligible provider that serves at least one rural Medicare, Medicaid or CHIP beneficiary will receive funding.”

RELATED: Urban Institute: COVID-19 relief fund likely to grow past $26.8B as money gets returned

The funding distribution comes as rural providers have faced major financial strain due to the pandemic, as such providers already operate on thin margins.

"Healthcare providers in rural communities have been hit hard by the COVID-19 pandemic, and they continue to experience significant financial hardships,” said Becerra.

The CARES Act passed last year included $178 billion in relief funding to all providers to help plug financial shortfalls caused by the pandemic.

But rural provider advocates criticized the initial tranches of funding that were distributed based on a provider’s Medicare claims, as rural facilities and doctors rely more on other government program funding sources like Medicaid.

HHS eventually devoted specific allocations to rural providers who rely more on Medicaid or CHIP.

HHS announced back in September another $25.5 billion in relief funding to providers, including bonus payments to those who serve a high number of Medicaid, CHIP and Medicare patients.

The announcement came roughly a week after Republican senators criticized the slow pace of the relief funding allocations.