Covid Aid Is on the Way to Health Providers for Poor and Uninsured Americans

(Bloomberg Law) -- The Department of Health and Human Services is distributing about $25 billion in long-awaited relief to doctors and hospitals that primarily treat low-income and uninsured patients and have been reeling from the coronavirus crisis.

The hospitals and doctors that are mostly paid by Medicaid or the Children’s Health Insurance Program haven’t had a direct conduit for Covid-19 funding since Congress enacted a health provider relief package in April. That’s because Medicaid and CHIP are run by states with federal distributions of cash, and the mechanism for getting money through those programs is complicated.

But the delay has raised concerns that many small providers and even some hospitals serving Medicaid patients could fail after suffering dramatic revenue declines during the crisis.

The HHS plans to distribute about $15 billion to eligible providers that participate in state Medicaid and CHIP programs and that haven’t previously received aid, the agency said Tuesday.

Eligible providers include dentists enrolled in Medicaid, a senior HHS official said. It’s unlikely that any hospitals will be eligible for funds from that Medicaid pot of money.

Separately, another $10 billion in relief funds will be sent to safety-net hospitals that primarily serve uninsured and poorer patients. That distribution will occur this week.

It took time to get the funds to Medicaid providers because it was difficult to get lists of those providers from states, the senior HHS official said on a call with reporters. The HHS needed those lists to authenticate which facilities were eligible for the relief.

Each safety-net hospital will receive at least $5 million, with the ability to receive up to $50 million, the official said.

More May Be Needed

Hospital and nursing-home groups welcomed the announcement, but the American Hospital Association warned that the funding may not be enough.

“While we appreciate the emergency funds released by HHS to date, the AHA continues to urge the department to distribute substantial additional funds to hospitals and health systems in an expedited manner as the COVID-19 virus continues to spread, hospitalizations continue to occur, and many Americans continue to forgo care, including primary care and other specialty care visits,” the AHA said.

Previously, the Virginia secretary of health and human resources asked the HHS to dedicate $50 billion from the relief fund to Medicaid providers.

The money for Medicaid providers will provide the first opportunity for aid for assisted living facilities, which aren’t considered nursing homes because they don’t offer round-the-clock medical care. The industry has been clamoring for aid, noting that while they are regulated by states and outside federal funding channels, they still house a particularly vulnerable population to Covid-19. About 48% of assisted living and residential care communities are Medicaid-certified, which means they can apply for funding.

“We applaud the Administration for providing specific funding for long term care facilities and other providers who do the valiant work of serving Medicaid beneficiaries,” said Mark Parkinson, president of the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), which represents more than 14,000 nursing homes and long term care facilities.

Provider Relief Fund

Congress allocated $175 billion in relief funds for hospitals and providers, but the money so far has been directed primarily to providers heavily involved in the Medicare program.

The goal of the relief funds was to help providers facing increased costs from treating Covid-19 patients, and lost revenues attributable to the cessation of non-essential procedures and the reluctance of patients to go to doctors offices and hospitals.

Some Medicaid and CHIP doctors have received funding from the general Provider Relief Fund because they also treat Medicare patients.

The HHS made an initial distribution of $30 billion in mid-April to 320,000 Medicare providers, and followed that up with an additional $20 billion in distributions to Medicare providers later that month.

The agency has since made distributions of $10 billion to rural health-care providers, $12 billion to hospitals with large numbers of Covid-19 patients, and $5 billion to skilled nursing facilities.

But until today’s announcement, HHS hadn’t made any distributions specifically targeting providers who are heavily dependent on Medicaid revenues, many of whom operate on very thin margins, as the HHS acknowledged in its announcement.

Around 38% of all providers participating in the Medicaid and CHIP programs didn’t receive any funds from the early HHS distributions, according to the statement.

Those include pediatricians, obstetrician-gynecologists, dentists, opioid treatment and behavioral health providers, assisted living facilities, and other home and community-based services providers, the HHS said.

Nearly one million providers are eligible for this funding, it said.

—With assistance from Shira Stein and Tony Pugh

To contact the reporters on this story: Fawn Johnson in Washington at fjohnson@bloomberglaw.com; Christopher Brown in St. Louis at ChrisBrown@bloomberglaw.com

To contact the editors responsible for this story: Karen Ertel at kertel@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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