Urban Institute: Relief fund for COVID-19 providers set to exceed $ 26.8 billion as money is paid back


A new study estimates that there is $ 26.8 billion left in a pot of money meant to fill hospital revenue holes caused by the COVID-19 pandemic, and more money could be on the way.

The Urban Institute published an analysis on Tuesday estimate what’s left of a $ 178 billion fund passed by Congress last year under the CARES Act. The scan, commissioned by the Robert Wood Johnson Foundation, called on the Biden administration to better target vendors who still have problems fighting the virus.

Urban’s analysis of publicly available information found that $ 7.1 billion of the supplier relief fund had not been allocated this month. Another $ 19.7 billion was allocated to some vendors but was not sent.

The researchers also found $ 8 billion in grants returned by vendors because they had not been spent.

The analysis comes amid strong criticism from lawmakers and service providers that the Department of Health and Human Services (HHS) did not properly allocate relief funds at the start of the pandemic.

Last April, the HHS first sent out $ 30 based on health insurance claims received by a provider in order to quickly withdraw money. But some providers who relied more on Medicaid or other sources of revenue have been left behind.

RELATED: HRSA Opens Requests for $ 22.5 Billion in New Supplier Pandemic Relief Fund

The HHS attempted to remedy this by allocating $ 16 billion to safety net providers based on revenue received from Medicaid. But this targeted allocation also hurt these providers, as Medicaid tends to reimburse less than commercial and Medicare plans, and “providers receive little or no reimbursement for the treatment of uninsured patients,” according to the analysis.

HHS began making targeted distributions from then on to certain groups of providers, including rural clinics and skilled nursing homes.

The agency also had a large gap in allocations from October 2020 to September this year, when the HHS announced an additional $ 17 billion in funding. The announcement came after intense pressure from lawmakers concerned about the speed of distribution.

Questions continued to plague HHS over how funding is allocated.

Urban referred to a study by the Children’s and Medicaid Medicare Program Access and Payment (CHIP), which advises Congress on programs, which showed that many Medicaid providers and of CHIP “did not receive any grant from the fund”.

However, several large systems and hospital groups said the aid helped support finances when incomes fell sharply at the start of the pandemic when facilities were forced to close elective procedures to preserve the ability to fight the disease. COVID-19.

The relief fund may, however, get more money in the near future. Urban documented that in February 2021, there was $ 8 billion in returned funds.

Almost three-quarters of the returned funds were distributed in the first $ 30 billion funding round, for which hospitals did not have to apply and were not distributed based on their experience with COVID-19.

“Several large not-for-profit and for-profit health systems that received funds said they did not need the money because they had gained experience in managing operations and expenses. as the pandemic progressed, or as they recovered sooner than expected, ”says the analysis.

Also in June, vendors had to start returning all money they received before June 2020 to HHS.

“As of May 31, 2020, about a third of the Provider Relief Fund grants ($ 65 billion) had been released,” Urban said. “Given the untargeted allocation formula used to distribute Phase 1 grants, more vendors will likely have to repay some of their initial funding. “

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