The announcement follows criticism of the Trump administration by bipartisan members of Congress, experts and hospitals themselves that, in deciding how to use $175 billion in coronavirus relief aid to health-care institutions, HHS has not focused help before now on the most vulnerable corners of the industry.
Across the country, hospitals and other parts of the health-care system have been badly bruised by increased costs to treat people with covid-19, the disease caused by the novel coronavirus, combined with sharp revenue losses as elective surgeries and other moneymaking services were suspended through much of this spring.
Earlier batches of money disbursed by HHS did not take into account hospitals’ financial condition. Analyses by health-policy specialists and journalists have found that, as a result, a lot of aid has gone to relatively wealthy health systems, while safety-net hospitals received comparatively little. The first $30 billion round of aid was distributed based on hospitals’ Medicare income, and hospitals in poor areas sometimes have a relatively small proportion of patients on Medicare.
Hospital trade groups had urged HHS, which has latitude in how to allot the money Congress provided this spring, to take the steps it did Tuesday.
In announcing the latest assistance, HHS Deputy Secretary Eric Hargan termed the pots of money essential, saying they focus on hospitals that “operate on thin [profit] margins and may be struggling more during this crisis.”
Hargan also nodded to the protests over racial injustice that have erupted around the United States following the killing of George Floyd in police custody. He noted that African Americans have been hospitalized for covid-19 at a rate 4.5 times higher than whites, while Hispanics and Native Americans have been hospitalized at 3.5 and 5 times higher, respectively.
“We put a focus on providers who disproportionally serve these populations,” Hargan said during a conference call with journalists.
Hargan and other senior HHS officials said safety-net hospitals that qualify for some of the $10 billion will receive $5 million to $50 million each. To qualify, a hospital must meet several financial criteria, including the amount of care it provides in a year to patients with no way to pay their bills. It must have a profit margin of no more than 3 percent, though the average hospital expected to take part is operating at a loss, a senior official said.
The larger pot — $15 billion — will be paid to hospitals and other providers that participate in Medicaid and the Children’s Health Insurance Program, a 1990s-era insurance program for children of the poor and the working class.
According to a senior administration official who briefed reporters on the condition of anonymity, the requirement to have not received relief money earlier this spring means that most of the nation’s community health centers will be unable to claim any of the $15 billion. Their exclusion on those grounds comes after a survey last month by the Kaiser Family Foundation, a health policy organization, found that nearly 2,000 such clinics had closed at least temporarily because of financial pressures from the pandemic.
HHS officials also said Tuesday they are preparing to deliver a separate $10 billion to hospitals and other providers of care located in coronavirus hot spots, following a similar amount in April.
Last week, the chairmen and ranking minority-party members of the House and Senate committees that oversee Medicaid sent a letter to HHS Secretary Alex Azar, warning that “the delay in disbursing funds . . . for Medicaid-dependent providers could result in long term financial hardship for providers who serve some of our most vulnerable populations.”
Asked Tuesday why HHS did not arrange for the new funds earlier, a senior HHS official said “the biggest challenge” was getting a list from each state of doctors, hospitals and others that participate in Medicaid.
Tom Nickels, the American Hospital Association’s vice president for government relations, said HHS’s new formula for handing out money to hospitals with large numbers of Medicaid and uninsured patients is reasonable.
America’s Essential Hospitals, a coalition of safety-net hospitals, had previously asked for $20 billion in aid. The trade group’s president, Bruce Siegel, said in a statement Tuesday that the $10 billion “will help ease the financial pain this public health emergency has inflicted on these caregivers,” though he again pressed Congress and the administration to provide more help.