April 29, 2020

In the deadly days of World War II, when the Russians were on the brink of defeat at the hands of multiple German army groups spread along a thousand-mile front, factories beyond the Urals managed to mass produce tanks in sufficient numbers to eventually beat back the German advance.  The T-34 main battle tank was an inexpensive, no-nonsense weapon that turned the tide of war.  The Russians’ ability to churn out so many of these bare-bones combat vehicles remains a miracle of modern military history.

Round and Round

Sometimes, the urgency of a situation demands immediacy over complexity.  In the midst of a massive threat you may not have time to carefully craft a perfect solution.  You just want to throw as many resources at the threat as quickly as you can.  That appears to have been the federal government’s strategy relative to a $30 billion fund that was rushed to healthcare providers and facilities throughout the country, beginning April 10.  This money represented a first round of stimulus money meant to help support the healthcare industry in response to the coronavirus (COVID) outbreak.

The rub is that this money was seemingly thrown at the industry in a shotgun approach that many believe was poorly targeted.  It was based on a formula tied to the entity’s historical Medicare payments.  But what about those providers and hospitals that had a low Medicare population, such as children’s hospitals?  We were told that we could expect the second round of stimulus funds to address such inequities.  In other words, the second round was to be designed with a bit more selectivity, complexity and focus.  According to one news outlet, “the next wave of funding is intended to help providers who missed out on the first round.”  But is that really the case?

In answer to that question, Health and Human Services (HHS) released its plans for the second phase of funding, which we are told is to be generally distributed along the following lines:

• $20 billion to providers based on 2018 patient revenue
• $10 billion for hard-hit areas
• $10 billion for rural providers
• $400 million for the Indian Health Service

In the following sections, we will dive a little deeper on each element of the second round of funding, beginning with the $20 billion block of funds.

Strings and Things

According to HealthcareFinance, the $20 billion in payments will go out on a weekly, rolling basis.  The first installments were delivered on Friday, April 24. A portion of providers will automatically be sent an advance payment based on the revenue data they submitted in CMS cost reports. Providers without adequate cost report data on file will need to submit their revenue information to the “general distribution portal.”  Even those providers who receive their money automatically will need to submit their revenue information for verification purposes. Those who don’t have up-to-date information on file can provide updates using the same general distribution portal.  The following website provides information about, and a link to, the portal: https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/index.html.

One of the conditions of receiving these funds is an agreement by the provider to not engage in “balance billing” of presumptive or actual COVID patients. In other words, providers must agree not to seek collection of out-of-pocket payments from such patients that are greater than the patients would have otherwise been required to pay if the care had been provided by an in-network provider.  To find and sign off on these terms and conditions, providers will simply need to go to the link listed immediately above.

Targeted Facilities

Beyond the $20 billion discussed above, the second wave of stimulus money will include an additional $10 billion to hospitals with large numbers of COVID patients, with a whopping $4.4 billion of that money going to hospitals in New York alone—the state with the highest number of COVID patients in the U.S.

Hospitals have to provide information to the administration using a website that launched April 23. (Refer to the above-listed link for more details.)  The information required includes sharing the number of patients admitted with either a confirmed or suspected case of COVID.  In determining payment levels, HHS will look at which hospitals have the highest number of cases, “weighting more heavily toward providers with a significant number of low-income patients,” according to Business Insider.

Then there is an additional $10 billion that is being set aside for rural healthcare facilities.  These funds will be funneled to some 2,000 rural hospitals, including approximately 1,100 rural health clinics and 1,300 freestanding clinics affiliated with these hospitals.  Payments are expected to go out as early as this week.  They will be distributed on the basis of the facility’s operating expenses.

Finally, the second round includes an additional $400 million to the Indian Health Service.  As with the rural hospitals, the emergency relief funds will be allocated based on operating expenses.  Payment amounts have been particularly designed to provide targeted support of telehealth services. These payments are expected to begin rolling out in the next few days.

Imperfect but Impactful

While these emergency relief funds to providers and hospitals may not have been perfectly tailored to address the wide-ranging needs as some reckon them, many remain thankful that Washington was at least willing to infuse billions, waive rules and act quickly to address the most debilitating health/financial crisis we’ve ever witnessed.  Government solutions are not perfect, but they will hopefully prove sufficient to stave off massive bankruptcies in the healthcare sector, even as providers and facilities struggle to save lives.

MiraMed Global Services is also here to provide support in this time of need.  We offer a wide array of specialized services from remote staffing to data capture, auditing and analytics. Please reach out to us at info@miramedgs.com to see how we can assist your organization during this critical time.