HHS to distribute $9B in COVID-19 relief funds to smaller providers this week

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The Department of Health and Human Services announced the latest funding tranche from a $178 billion COVID-19 relief fund passed under the CARES Act. (Getty Images)

The Department of Health and Human Services (HHS) announced it has distributed $9 billion in relief payments to providers to plug financial shortfalls caused by the pandemic, with more money going towards smaller providers.

The money is part of a $178 billion Provider Relief Fund and comes as HHS was criticized earlier in the year for not distributing the money fast enough. The agency said payments will reach providers later this week.

“This vital funding will ensure critical healthcare services are delivered to communities across the country—including to those who are disproportionately impacted by the pandemic and medically underserved,” said HHS Secretary Xavier Becerra in a statement.

HHS announced the payment methodology in September in order to give providers more insight into how to qualify for the money.

“Approximately 75% of Phase 4 funding is being distributed based on expenses and decreased revenues from July 1, 2020, to March 31, 2021,” HHS said in a release.

The Health Resources and Services Administration (HRSA) is also reimbursing more losses from smaller providers that were hit especially hard by the financial crisis caused by the pandemic.

HRSA is doling out 25% of the funding as a bonus payment based on the amount and services provided to Medicare, Medicaid or patients with the Children’s Health Insurance Program.

“HRSA is using Medicare reimbursement rates in calculating these payments to mitigate disparities due to varying Medicaid reimbursement rates,” the agency said.

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HHS announced the application portal for the money back in September, and the $9 billion being distributed this week is part of a $25 billion pot, leaving $16.5 billion left to still give out.

HRSA will make the remaining payments next year.

“While we have made over a half a million relief payments to healthcare providers throughout this pandemic, we know that many continue to face COVID-19 related financial challenges,” said Diana Espinosa, HRSA’s acting administrator, in a statement.

The funding announcement comes less than a month after HHS announced $7.8 billion in relief dollars to rural providers passed as part of the American Rescue Plan Act earlier this year.

Lawmakers have also criticized the slow rollout of the remaining relief funds, especially as providers continue to grapple with surges caused by the virus.

The Trump administration was also criticized last year for doling out the first tranche of relief dollars based on Medicare claims, but advocacy groups criticized the lack of reimbursements to providers reliant on Medicaid. Future tranches of the relief fund made targeted distributions to providers in COVID-19 hot spots and those reliant on other forms of reimbursement.