ON JUNE 9, 2020, HHS ANNOUNCED ADDITIONAL DISTRIBUTIONS FROM THE PROVIDER RELIEF FUND FOR MEDICAID PROVIDERS AND SAFETY NET HOSPITALS, AND A SECOND ROUND OF FUNDING FOR HOSPITALS IN HOTSPOT AREAS.
On June 9, 2020, the US Division of Well being and Human Companies (HHS) introduced extra distributions from the Supplier Reduction Fund for Medicaid suppliers and security internet hospitals, and a second spherical of funding for hospitals in hotspot areas. The Coronavirus Support, Reduction, and Financial Safety (CARES) Act (P.L. 116-136) established the Fund to offer $100 billion to assist healthcare suppliers affected by the Coronavirus (COVID-19) pandemic. The Paycheck Safety Program and Well being Care Enhancement Act (P.L. 116-139) offered a further $75 billion to the Fund. With this and former Fund distributions, HHS has dedicated roughly $112.four billion, leaving $62.6 billion uncommitted.
HHS expects to distribute roughly $15 billion to Medicaid suppliers that didn’t already obtain cost from the Fund’s earlier basic distributions.
HHS expects to distribute a further $10 billion in focused funding to security internet hospitals.
HHS introduced a further utility window, by way of June 15, 2020, for $10 billion to hospitals in hotspots.
The CARES Act and the next Paycheck Safety Program and Well being Care Enhancement Act allotted a complete of $175 billion for the Supplier Reduction Fund. Thus far, HHS has distributed, or dedicated to distribute, roughly $112.four billion in funds, together with $50 billion on the whole distribution for Medicare fee-for-service (FFS) suppliers, and focused distributions for hospitals in excessive COVID-19 influence areas (hotspots); rural suppliers; expert nursing amenities; and tribal hospitals, clinics and concrete well being facilities. The final distribution funds are based mostly on the lesser of two% of a Medicare FFS supplier’s 2018 (or most up-to-date full tax yr) internet affected person income or the supplier’s incurred losses for March and April 2020.
HHS has indicated an intention to focus on Medicaid suppliers for a number of months now. With its June 9 announcement, HHS established a cost course of for these suppliers just like that below the present basic distribution for Medicare FFS suppliers. HHS additionally acknowledged the necessity for extra assist for hospitals in high-impact or hotspot areas.
Medicaid Supplier Reduction Fund Distribution
HHS dedicated to distribute roughly $15 billion from the Supplier Reduction Fund to eligible Medicaid and Youngsters’s Well being Insurance coverage Program (CHIP) suppliers. Suppliers are eligible for this distribution if they didn’t beforehand obtain funds from the Fund’s $50 billion basic distribution and straight billed both their state Medicaid and CHIP applications or their Medicaid managed care plans for healthcare-related providers from January 1, 2018, to Could 31, 2020.
Suppliers searching for a portion of this distribution should submit annual affected person income data to a brand new Medicaid and CHIP Focused Distribution Supplier Reduction Fund Cost Portal. The applying kind requires considerably extra data from Medicaid suppliers than HHS required from Medicare fee-for-service (FFS) suppliers, together with calculating misplaced revenues on account of COVID-19, payer combine data, and another funding obtained by way of the Paycheck Safety Program. Suppliers have till July 20, 2020, to submit their utility. The cost will likely be at the least 2% of reported gross income, just like the method introduced within the second tranche of the Fund’s $50 billion basic distribution, however probably extra beneficiant, because it units 2% as the ground.
As with different distributions, suppliers should attest to phrases and situations in the event that they want to obtain and retain funds. Eligible recipients ought to overview these intently, in addition to the Fund’s ceaselessly requested questions, as they think about attestation. The phrases and situations and supplemental supplies comprise beneficial details about supplier eligibility, easy methods to apply, how funds can be utilized, reporting necessities, guidelines associated to govt compensation and restrictions on stability billing. Suppliers ought to preserve cautious document of their COVID-19 bills and income losses, and the way they use the funds. As with different tranches, the quantity a supplier receives might turn into public, in accordance with the phrases and situations. Stakeholders ought to view all supplies submitted to HHS by way of the portal as probably public-facing materials.
HHS has but to reply sure questions in regards to the timing and course of for this distribution. For instance, it’s unclear how simply suppliers will be capable to apply and the way rapidly the funds will likely be distributed. Some Medicare suppliers have skilled a major lag from the time of submission to receipt of cost.
As an added layer of complexity, HHS will search to make sure that suppliers don’t double dip into the Medicaid and Medicare distributions. It’s unsure how HHS will monitor the method, and the way this subject might complicate the distribution to Medicaid-based suppliers.
SAFETY NET HOSPITAL FUNDING
HHS additionally dedicated a focused distribution of $10 billion to “security internet” hospitals. Qualifying hospitals will need to have:
A Medicare disproportionate cost proportion of 20.2% or better;
Common uncompensated care per mattress of $25,000 or extra (for instance, a hospital with 100 beds would wish to offer $2.5 million in uncompensated care in a yr to fulfill this requirement); and
Profitability of three% or much less, as reported to the Facilities for Medicare and Medicaid Companies within the hospital’s most just lately filed value report.
The primary two standards used to find out eligibility for the security internet hospital focused funding are measures of how a lot care a hospital is offering to low-income Medicare, Medicaid, underinsured, and uninsured sufferers. Whereas a hospital’s DPP is comparatively steady year-to-year, the quantity of uncompensated care (UCC) can differ considerably, and likewise is topic to reporting variance. The third standards is probably going supposed to direct funding to these security internet hospitals which might be most susceptible financially. Nevertheless, just like the variation seen in uncompensated care, hospital profitability may also differ considerably from year-to-year. With such year-to-year variability in two of the three standards, the yr HHS makes use of to find out eligibility will dramatically have an effect on who receives funds from the security internet hospital focused funding. A McDermottPlus evaluation of the 2 most up-to-date years of Medicare value report and different information (2017 and 2018) point out that greater than 900 hospitals would meet the factors in one of many two most up-to-date value report years, lower than 50 p.c would meet the factors in each years. A proper listing of qualifying hospitals below the focused security internet hospital funding distribution just isn’t but obtainable, however HHS reported that 761 hospitals will obtain this funding.
Recipients will obtain a minimal distribution of $5 million and a most of $50 million. HHS states that the distribution quantity for an eligible security internet hospital is the proportion of the person facility rating (variety of facility beds multiplied by DPP) to the cumulative facility scores for all security internet hospitals, occasions the $10 billion security internet distribution.
HHS will allocate a further $10 billion to hospitals in areas extremely affected by the COVID-19 outbreak. HHS beforehand allotted $12 billion to those hospitals on Could 1, 2020. Hospitals obtained a communication from HHS on June 8, 2020, asking them to offer up to date COVID-19 information, which will likely be used to find out the hospitals’ eligibility for the funding. Hospitals have till 9 pm EDT on June 15, 2020, to submit their information.
The Medicaid focused distribution announcement comes on the heels of a bipartisan, bicameral congressional letter urging HHS to enhance the tempo of funding distributions to Medicaid suppliers. HHS has now dedicated to distributing roughly $65 billion to suppliers based mostly on earlier income: $50 billion on the whole distribution for Medicare FFS suppliers and $15 billion for Medicaid suppliers. Finally, nonetheless, this distribution is a restricted panacea for suppliers. The American Hospital Affiliation issued a report in Could 2020 anticipating a “complete monetary influence of $202.6 billion in losses ensuing from COVID-19 bills and misplaced income for hospitals and well being programs over the four-month interval from March 1, 2020 to June 30, 2020—or a mean of over $50 billion in losses a month.” If HHS’s goal is 2% of revenues for a yr, suppliers might want to proceed to advocate for additional help.
Stakeholders ought to think about inspecting the extra $100 billion allotted to the Fund by way of the Well being and Financial Restoration Omnibus Emergency Options (HEROES) Act, which handed the Home on Could 15, 2020. Whereas HEROES was assembled by Home Democrats and superior on celebration strains, with just one Republican voting in its favor, it stays the one main piece of laws for the subsequent restoration within the public area. Stakeholders ought to be aware not solely the general quantity of funding, but additionally the particular legislative situations and course of that Democrats proposed for distribution of the extra funds.
Transferring ahead, suppliers will likely be desperate to see how HHS will distribute the remaining $62.6 billion within the Supplier Reduction Fund. HHS has indicated that a few of this funding will likely be devoted to reimbursing remedy for uninsured people, however the division has not mentioned how a lot will likely be put aside for this goal. HHS has additionally mentioned that additional assist is required for dentists. Stakeholders ought to proceed to advocate their want for extra monetary reduction—now and sooner or later—with the Administration and Congress.