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AHA seeks $25K per hospital bed from emergency COVID-19 fund

Dive Brief:

  • Providers are asking for the relief money allocated to them in the $2 trillion emergency COVID-19 legislation signed late last week to be distributed immediately as they scramble to find enough space and equipment to prepare for an influx of patients.
  • The American Hospital Association suggested using Medicare Administrative Contractors to give every hospital in the country $25,000 per bed, with those in hot spots receiving a rate of $30,000. That base amount would add up to about $23 billion of the $100 billion from the legislation, and further waves could be sent out in a similar manner, AHA said in a Tuesday letter to HHS officials.
  • Separately, AMGA, which represents medical groups, supported using periodic interim payments, which are allowed for in the Code of Federal Regulations, to account for lost Medicare Part A and Part B revenue while also acknowledging COVID-19’s impact on commercial revenue.

Dive Insight:

The unprecedented funding package for response to the novel coronavirus pandemic allocates infusions for several industries with the hope of keeping the U.S. economy running, including the $100 billion for the healthcare sector that hospitals said they desperately needed to make payroll and stay open.

But the law gave wide discretion to HHS for how that money would be divided and sent to providers, and it’s not clear how the department plans to move forward. 

“Our providers need access to these funds immediately,” AMGA said in its letter to HHS Secretary Alex Azar. “Time is a paramount factor, and any mechanism the department opts to use to distribute the funds must acknowledge this.”

Eric Jordahl, treasury and capital markets practice leader at Kaufman Hall, told Healthcare Dive it makes sense for hotspots to get funding they need to keep operating, but hospitals that haven’t yet been hard hit also need help as they keep staff on payroll and secure necessary equipment without also receiving the revenue they would normally be generating.

“They’re trying to do the responsible thing and be prepared to meet this crisis if it comes to their market,” he said.

Most health systems have stopped performing elective procedures, a big hit for their revenue, especially as its unknown how long the crisis will persist. And treatment of COVID-19 can be costly. The emergency funding legislation included a 20% bump in Medicare rates for diagnosis related groups commonly used for treating the disease, but even with that boost, hospitals stand to lose an average of about $1,200 per case, according to one analysis.

Meanwhile, they’re building out capacity for treatment and patient screening. Health systems gained new flexibilities for this earlier this week when CMS said facilities like hotels and dorm rooms can stand in as hospitals.

CMS has also expedited Medicare payments to providers as they respond to the pandemic. The actions stem from a national emergency President Donald Trump declared March 13.

AHA in its letter to Azar and CMS Administrator Seema Verma listed a number of categories it thinks should be eligible for funds under the law. They include expenses for surge capacity such as triage activities, equipment relocation, additional security and building up telehealth capacity. The hospital group also included workforce expenses like overtime pay, along with housing costs and paid leave for quarantined staff.

“While our members continue to do everything they can to address COVID-19 cases, quickly making these funds available would help them continue to put the health and safety of patients and personnel first, and in many cases, may actually ensure they are able to keep their doors open,” AHA wrote.

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