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Hospitals await details as emergency fund allocations begin

Hospitals hit hardest by the pandemic are not being prioritized in first wave of money

The George Washington University Hospital emergency entrance in Washington is pictured on March 16. Some of the hospitals hit hardest by the coronavirus pandemic are not being prioritized in the first wave of money from the $100 billion hospital emergency fund.
The George Washington University Hospital emergency entrance in Washington is pictured on March 16. Some of the hospitals hit hardest by the coronavirus pandemic are not being prioritized in the first wave of money from the $100 billion hospital emergency fund. (Caroline Brehman/CQ Roll Call file photo)

The Trump administration is beginning to distribute money from a new $100 billion hospital emergency fund to respond to the COVID-19 pandemic. But the hardest-hit hospitals are not prioritized in the first wave of money, and parameters on who qualifies are still unclear.

Centers for Medicare and Medicaid Services Administrator Seema Verma announced Tuesday that the department would be advancing $30 billion of the funds to providers through direct deposit based on their Medicare revenues this week. She also noted that CMS had pushed out an additional $34 billion in loans in the past five days through Medicare’s advance payment program, while the Department of Health and Human Services announced $1.3 billion more in separate funding for community health centers.

But Verma did not offer a clear picture on who qualifies for the new grant money, a question provider groups have been asking since Congress passed the more than $2 trillion economic aid package last month. Interest groups have jockeyed for priority consideration as the health care system struggles with a sharp decline in revenue amid a surge in coronavirus cases.

Verma did indicate that a wide range of providers would be eligible, citing pediatricians, children’s hospitals and OB-GYNs in her remarks.

She also acknowledged that the first wave would fall short of what many vulnerable safety-net providers need, since the formula does not incorporate Medicaid or other funding streams. But Medicare offered the quickest path to distributing the much-needed funds.

“Those organizations will be addressed in the second tranche of funding, and we will have a priority for these organizations and these types of providers,” Verma said.

CMS referred questions on the next wave of funding to the Department of Health and Human Services, which did not immediately respond. Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer are pushing to include an additional $100 billion for hospitals and community health centers in an “interim” economic aid bill to replenish the Paycheck Protection Program for small businesses, which would preface a fourth round of coronavirus response legislation.

Many hospitals in underserved rural and urban areas were struggling to keep their doors open before the pandemic hit. Small and safety net hospitals are also facing a dire situation, even in areas without serious COVID-19 outbreaks. 

In a call with reporters last month, Kevin Donovan, president of the nonprofit two-hospital system LRGHealthcare in New Hampshire, said the company operates with around four or five days of cash on hand in a good week, when payroll isn’t due. Vendors are increasing prices and demanding cash upfront for supplies, he said, including personal protective equipment for staff treating infectious patients.

The latest economic aid package contained a 6 percent increase on the federal match for Medicaid funds, but the payments are being funneled through state governments.

America’s Essential Hospitals urged HHS to expedite the money. “It is especially concerning because their narrow margins and front-line role mean these hospitals are among those in greatest need of funding support during this public health emergency,” AEH president Bruce Seigel said in a statement.

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