HHS Doles Out $24.5B in Latest Provider Relief Fund Distribution

December 17, 2020 - HHS, through the Health Resources and Services Administration (HRSA), has completed review of Phase 3 Provider Relief Fund applications and will start distributing payments to over 70,000 providers.

According to the announcement yesterday, the federal department will distribute $24.5 billion to providers who applied and were accepted as part of the Phase 3 distribution. The funding is up from the $20 billion originally planned to go out to providers.

“HHS is providing more than $24 billion in new relief to more than 70,000 healthcare providers, meeting close to 90 percent of the losses they’ve reported from the COVID-19 pandemic in the first half of the year,” HHS Secretary Alex Azar said in the announcement. “With the Provider Relief Fund, we’ve been able to support providers hardest hit by COVID-19, including safety net hospitals, rural providers, and nursing homes, helping ensure they can continue serving their communities during and beyond the pandemic.”

The latest distribution adds to the $68 billion already given out to providers through general distributions from the Provider Relief Fund.

Some providers have also qualified for additional funds from the program, including $22 billion for hospitals in COVID-19 hot spots, $11 billion for rural providers, and over $7 billion for skilled nursing facilities.

In total, Congress allocated $175 billion to the Provider Relief Fund earlier this year through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent legislation.

The Phase 3 Provider Relief Fund distributions went to providers who have not already received a baseline payment of 2 percent of annual revenue from patient care and applied for relief payments.

HHS decided to up the distribution pool after providers applying for Phase 3 funding realized submissions for lost revenues and net changes in expenses would exceed the budget.

The department also found through the application process that providers disproportionately impacted by the pandemic applied and will receive another infusion of relief payments from the Provider Relief Fund.

“Nursing homes for example, will be receiving another $1.10 billion in Phase 3 funding. This builds on the half billon in incentive payments HHS recently announced and the over $15 billion in aggregate funding already distributed. Ambulance, or transportation services providers, will be receiving $1.48 billion in Phase 3 funding,” the department stated.

HHS intends for the financial relief to address personal protective equipment needs, expand capacity, and other challenges providers have faced during the pandemic.

But healthcare providers are saying that the relief payments may not be enough to save them from revenue losses during the ongoing COVID-19 pandemic.

Hospitals and health systems are projected to lose more than $320 billion in 2020 alone because of pandemic-related losses and expenses, the American Hospital Association (AHA) reports.

The projected losses put hospital survival at “serious risk,” the Association says, and serves as a reason why “more financial support is urgently needed to safeguard America’s hospitals and health systems.”

“America’s hospitals and health systems continue to face historic challenges, including unprecedented financial pressures. It is vitally important that hospitals and health systems receive further support and resources to ensure that they can deliver critical care for patients and communities,” the Association recently stated.

Other medical groups have stressed the uphill battle their providers are facing with COVID-19, especially as some areas face second and even third waves of the virus.

Congress is getting closer to finalizing a new COVID-19 legislative package that would allocate nearly $900 billion in relief to Americans, small businesses, and healthcare providers.

It is unknown how much the package would direct to healthcare providers, although reports have confirmed that it would include “large sums of funding” for vaccine distribution and healthcare.

The package also reportedly contains a second round of stimulus payments to individuals and a boost to unemployment benefits.