An additional $8.5 billion, from the American Rescue Plan law adopted this year, is going to be sent to providers in rural areas with patients who are covered by Medicaid, Medicare and a children’s public health insurance program.
HHS officials said they are holding back an additional several billion dollars to have it available for helping to cover coronavirus treatment, testing and vaccinations for people who are uninsured.
Friday’s announcement marks the first time any of the federal money intended to help the health-care system stave off financial hardship because of the pandemic has been handed out since President Biden took office.
A wide swath of the health-care industry has been voicing escalating complaints in recent months that the money was sitting unused, especially as the highly contagious delta variant fills hospitals in some parts of the nation with patients sick with covid-19, the illness caused by the virus.
Previous money, given out in three phases, was available only for financial burdens incurred in the pandemic’s first months, through June 2020, although the vast majority of infections occurred since then. The newly released money can be applied to expenses from July 2020 through March of this year.
Health-care providers and practitioners will be able to apply for some of the new round starting late this month, HHS said. And those that receive aid will have until the end of next year to spend it.
The administration said it also is willing to review the amounts of money hospitals, nursing homes and others received in the most recent previous phase, which began during the final months President Donald Trump was in office. HHS on Friday issued more details about how that last money was allotted so providers can decide whether to request an adjustment.
Recent reports by the Government Accountability Office found that nearly $44 billion of the provider funds were sitting unused — and urged HHS to explain to Congress when it planned to spend it. Of that amount, $24.5 billion had never been allotted for a specific purpose, while the rest was available for a variety of reasons, including because some large health-care system gave back money, saying it did not need it.
Major health-care constituencies, which had been pressing the Biden administration to stop sitting on the money, reacted Friday with qualified praise.
Calling the provider fund “a lifeline” that has helped hospitals and health systems stay open during the pandemic, Rick Pollack, the American Hospital Association’s president, said in a statement Friday that the organization “appreciates the administration for announcing plans to get additional critical relief funding for providers out the door.”
But Pollack and other health-care industry leaders pointed out that the time frame for which money can be applied — through early this spring — stops before the number of coronavirus infections began its sharp climb of recent months.
“[T]his announcement doesn’t account for the spring and summer surges across the country due to the delta variant,” Pollack said.
One industry official, speaking on the condition of anonymity to avoid appearing ungrateful, noted that the $17 billion is less money than was distributed in the earlier phases and “will be used in the blink of an eye.” For expenses and lost revenue after March, the official said, “we’ll have to go back to Congress.”
Mark Parkinson, president of the American Health Care Association, the main trade group for nursing homes and assisted-living facilities, said in a statement that the money is “long overdue but greatly appreciated.”
Katie Smith Sloan, president of LeadingAge, a coalition of services for older Americans, said in a statement that the organization has for months been appealing to the White House, HHS and members of Congress to try to apply pressure to have remaining funds released.
“We are thrilled that they are opening up” applications for a new round, Smith Sloan said.
The Wall Street Journal first reported on the release of the money.