KFF: Program to reimburse providers for treating uninsured COVID-19 patients has several limitations

A financial chart
A new analysis details several reasons so little money has been doled out to reimburse providers for treating uninsured COVID-19 patients. (Getty/Ca-ssis)

Little cash has been sent out to providers to reimburse them for treating uninsured COVID-19 patients.

A new analysis released Thursday by the Kaiser Family Foundation says there are several reasons, including the structure of a program created by the Department of Health and Human Services (HHS) to provide those reimbursements.

According to that report, HHS has only given out $881 million in payments as of Sept. 30 to compensate providers. An earlier estimate from the foundation found that the cost of treating uninsured COVID-19 hospitalized patients could be between nearly $14 billion and $41.8 billion.

But there are several reasons for the small amount of money for uninsured costs, they said.

One important factor is that HHS makes eligibility for reimbursement contingent on COVID-19 being the primary diagnosis for an uninsured patient. “In some cases, patients with COVID-19 are being treated for symptoms brought on by the virus may not have a primary diagnosis of COVID-19,” the analysis said. “Hospital groups have noted that this is particularly a problem for patients with sepsis caused by COVID-19. In those cases, coding protocols dictate that patients are coded with sepsis as their primary diagnosis and not COVID-19.”

RELATED: AHA: Hospitals could lose $20B a month for rest of 2020 due to COVID-19 impact

Another problem is the reimbursement program isn’t mandatory, and patients can’t easily discern which providers participate.

"While large hospitals are likely participating in the program, smaller providers may not be aware of this source of funding or they may face administrative barriers to submitting claims and getting reimbursed," KFF said.

The authors of the KFF report were also concerned that the reimbursement program, by design, is different from other policy approaches that instead promote access to affordable health coverage.

“Policy options that enable people to afford and enroll in comprehensive health insurance would help them access care for all their healthcare needs, including possible COVID-19 testing and treatment, although these policies would likely increase government spending,” they said.

The analysis gave some examples, including subsidizing COBRA to help people who have recently been laid off and increasing Medicaid coverage.

In addition, the program does not guarantee funding for the providers. It is contingent on how much money is in a $175 billion provider relief fund. The fund gave out money to all hospitals and providers as well as special allocations to rural health and safety-net facilities and money to hospitals in COVID-19 hot spots.

So far, HHS has doled out all but $31.1 billion of that money as of Oct. 1, KFF said.

“HHS has not indicated how much money—if any—is being set aside to cover the costs of treating uninsured COVID-19 patients and how it will weigh the needs of that program with the ongoing needs of providers,” the analysis said.

Congress could appoint more relief funding to providers, which several hospital groups have asked for. But talks on a new COVID-19 relief package have stalled and appear doubtful before the Nov. 3 presidential election.

KFF also warned that the amount of uninsured claims could spread as COVID-19 cases start to rise in dozens of states amid warnings a second surge could occur this fall.

The economy also continues to shed jobs, which could increase the need for uninsured claims.

A separate analysis from the Commonwealth Fund found more than 14 million people were in danger of losing their employer-sponsored insurance since the pandemic’s start in March.