May 1, 2020
Late this afternoon, the U.S. Department of Health and Human Services (HHS) announced details regarding targeted payments for providers in rural areas and hospitals treating higher numbers of COVID-19 patients. These payments are part of the second tranche from the Provider Relief Fund.
According to the HHS press release, 33 hospitals in high-impact areas of Illinois will receive $694,340,792, and 228 rural providers in Illinois will receive a total of $352,227,994.
HHS says $12 billion will be allocated to 395 hospitals who provided inpatient care for 100 or more COVID-19 patients through April 10. Two billion of this amount will be distributed to these hospitals, based on their Medicare and Medicaid disproportionate share and uncompensated care payments. The distribution uses the following formula to determine what each hospital receives: a fixed amount per COVID-19 inpatient admission, with an additional amount taking into account a hospital's Medicare and Medicaid disproportionate share and uncompensated care payments.
A total of $10 billion will be allocated to rural hospitals, Critical Access Hospitals (CAHs), Community Health Centers (CHCs) located in rural areas, and Rural Health Clinics (RHCs). Allocations will be a minimum of $1 million to each hospitals and $100,000 to each clinic. These providers may qualify for additional funds, based upon the relative proportion of operating expenses they represent across the entirety of rural healthcare. HHS notes that many rural hospitals operating on thin margins prior to COVID-19 were particularly devastated by the pandemic.
- Hospitals and RHCs will each receive a minimum base payment plus a percent of their annual expenses. This expense-based method accounts for operating cost and lost revenue incurred by rural hospitals for both inpatient and outpatient services.
- Rural acute care general hospitals and CAHs will receive a minimum level of support of no less than $1,000,000 with additional payment based on operating expenses.
- The base payment will account for RHCs with no reported Medicare claims, such as pediatric RHCs, and CHCs lacking expense data, by ensuring that all clinical, non-hospital sites receive a minimum level of support no less than $100,000 with additional payment based on operating expenses.
HHS says that eligible providers will begin receiving funds in the coming days via direct deposit, based on the physical address of the facilities as reported to the Centers for Medicare & Medicaid Services and the Health Resources and Services Administration, regardless of their affiliation with organizations based in urban areas.