The Health and Human Services Department will make roughly $2 billion more in Provider Relief Funding payments this week, the government announced Tuesday.
But that’s not enough for the American Hospital Association, which is urging President Joe Biden’s administration to distribute another $6 billion and Congress to authorize $25 billion more.
According to the Health Resources and Services Administration, there is no money left over, however. The $6 billion remaining in the account is already set aside for purposes such as reconsiderations of previous grants and reimbursements to providers that treated uninsured patients, an agency spokesperson wrote in an email. The PRF dollars come from the $178 billion CARES Act that President Donald Trump enacted in 2020.
The latest grants round, known as Phase 4, focuses on reimbursing a higher percentage of losses for smaller providers and offering additional payments to Medicaid, Children’s Health Insurance Program and Medicare providers. HHS has allocated $17 billion to Phase 4.
HHS will send out $2 billion to 7,600 providers this week after distributing $9 billion in Phase 4 grants to more than 74,000 providers last month. HRSA has processed more than 80% of Phase 4 applications so far, the agency disclosed in a news release.
The administration will hopefully able to pick up the pace of releasing funds, said Brenna Jenny, a partner at Sidley Austin who served as HHS’s principal legal adviser on the Provider Relief Fund during the Trump administration. “Providers have understandably been frustrated that it took the Biden administration this long to resume distributing money they were just sitting on,” she said.
Although HRSA says all relief funds have been allocated, more transparency is needed, said Joanna Hiatt Kim, the AHA’s vice president of payment policy and analysis. HRSA also has not communicated how much is set aside for the uninsured fund, she said.
In addition, the hospital trade group wants HHS to give providers more time to spend their PRF grants and to allow them to use the money for additional purposes, such as security and training.
And the AHA is lobbying Congress for another $25 billion in Provider Relief Fund grants to compensate providers that continue to experience higher costs and lower revenue as the pandemic persists. The latest round is insufficient to address the recent COVID-19 surges, according to association.
“The lack of PRF dollars to address issues wrought by the delta and omicron surges has left many hospitals facing overwhelming financial and operational challenges,” the AHA wrote congressional leaders last week. “Compounding this issue has been uncertainty and confusion around the federal rules for previously allotted PRF funding that have hindered many providers from using the funds within the allotted time frames.”
Hospitals are badly struggling right now, said Bruce Flanz, president and CEO of MediSys Health Network, a not-for-profit health system in New York.
“As a safety net organization with no cash reserves, we are very dependent upon the government for financial support. We need federal funds like the provider relief monies that supported us earlier in the pandemic to pay for the increased workforce expenses, and to cover our lost revenue,” Flanz said during an AHA briefing with reporters Tuesday.
AHA is taking its case to congressional leaders and key committees, said Stacey Hughes, the association’s executive vice president for government relations and public policy.
“There’s a lot of members who are wanting to see where dollars are overall in the CARES effort before they commit new dollars but I certainly get a sense of a sense of urgency from Congress to look at the issues,” Hughes said during the press call.