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HHS reveals plans to pay hospitals, cover uninsured in pandemic

HHS Secretary Alex Azar said more than $40 billion will be split into four pools

People pick up free pet food during the Humane Rescue Alliance's Pet Pantry distribution at the Frederick Douglass Community Center in Southeast Washington on April 14, 2020.
People pick up free pet food during the Humane Rescue Alliance's Pet Pantry distribution at the Frederick Douglass Community Center in Southeast Washington on April 14, 2020. (Tom Williams/CQ Roll Call)

The Trump administration announced Wednesday how some of the $100 billion from a COVID-19 response law enacted last month would be allocated to cover the uninsured and how much of the rest of the money will be distributed.

HHS Secretary Alex Azar said more than $40 billion will be split into four pools: a general allocation, a targeted allocation for hot spots, a rural allocation and a tribal allocation.

An unspecified amount of additional funds will go to cover the uninsured and to other providers. Azar declined to provide a breakdown of those funds but said the total amount to be distributed, including the four other pools, will be almost $50 billion.

“Congress has entrusted us with an immense amount of money to send to providers, and we will be clear and careful about how we’re doing that,” said Azar in a call with reporters Wednesday, adding that terms will be in place to prevent fraud.

The funding will be on top of $30 billion in COVID-19 response funding sent out last week to facilities and providers. Last week’s allocation was distributed based only on Medicare fee-for-service revenue, which raised concerns from hospitals and other providers that treat a lot of Medicaid and uninsured patients but not many Medicare patients.

The general allocation in the new round will be $20 billion, given out to providers based on their 2018 revenues. Providers will upload information to a portal launching this week, and payments will go out weekly on a rolling basis. The first wave will go out Friday.

The second part, the targeted allocation for hot-spot areas hit hard by the pandemic, will be $10 billion. Providers will have until Thursday midnight Pacific Daylight Time to submit four pieces of information to a portal.

HHS will need the tax identification number, provider identifier, the total number of ICU beds, and the number of admissions with a positive diagnosis from COVID-19 from Jan. 1 to April 10. HHS may also weigh if it is a disproportionate share, or DSH, hospital that serves a disproportionate number of low-income or uninsured patients, or if disproportionately serves minority communities. HHS has not yet formalized the formula it will be using, but Azar said it will be disclosed soon.

“There should be plenty of money there for an additional second hot spot traunch if needed,” said Azar.

[No change in Social Security, Medicare finances, for now]

The rural allocation will be $10 billion, distributed as early as next week, for the country’s nearly 2,000 rural hospitals and clinics.

There will also be a $400 million allocation to the Indian Health Service, to address issues such as the outbreak in the Navajo nation, Azar said.

Azar said some providers will receive further separate funding, which would include skilled nursing facilities, nurses, and any providers that solely take Medicaid.

Coverage for uninsured

HHS did not provide a number for how much money would be allocated for COVID-related treatment for the uninsured from the third coronavirus-related law (PL 116-136) Congress cleared this year.

But Tom Engels, administrator for the Health Resources and Services Administration, said $1 billion from the second COVID-19 law (PL 116-127) would be used for testing for the uninsured.

Providers who have provided testing or treatment on or after Feb. 4 can request claims reimbursement through the program. Medically durable equipment, non-emergent patient transfer, and, later, any FDA- approved drugs for inpatient treatment will be covered.

“When an FDA-approved vaccine becomes available, it will also be covered,” said Engels. “Services not covered by traditional Medicare will not be covered by this program.” That means that, for instance, outpatient drugs that would normally be covered by the Medicare Part D prescription drug program will not be covered.

Hospitals and other providers could not bill a patient that is presumed to have COVID-19 for amounts that an insurer did not pay. 

Providers may begin submitting claims in early May, and payments are expected in mid-May, he said.

A senior administration official clarified that individuals with a short-term limited health plan would not be eligible for the uninsured benefit — even if it offers few benefits for patients — because that plan would qualify as coverage.

Providers that participate in the uninsured program agree to be reimbursed at the Medicare rate, and cannot bill the patient as being out of network.

A couple of providers have returned funds from the first round because they did not agree to those terms, according to HHS.

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