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The American Hospital Association wants Congressional action to distribute the remaining provider relief funds and to take other measures to help alleviate the financial strain caused by COVID-19.
No provider relief funds from American Rescue Plan have been released to address the Delta and Omicron variants, despite steep increases in hospitalizations and deaths, AHA Executive Vice President Stacey Hughes said in a January 20 letter to House and Senate leaders.
“We ask that Congress urge the Administration to immediately distribute and account for the remaining funds in the PRF, including extending the deadline for spending funds and allowing the funds to be used for expenses associated with additional security measures and training to allow each of our nation’s hospitals to overcome its unique challenges,” Hughes said. “Additionally, we ask that Congress provide additional PRF dollars in the amount of $25 billion to healthcare providers who continue to have lost revenues and increased expenses due to the tremendous financial strain that the delta and omicron variant are causing.”
The Urban Institute estimated in October 2021 that $26.8 billion remained in provider relief funding.
The AHA and hospital leaders are holding a press call at 9 a.m. Tuesday, January 25, to discuss the surge in caseloads and hospitalizations spurred by the variants, and also workforce challenges the organization said has reached the level of a national emergency.
Scheduled to be on the call are AHA President and CEO Rick Pollack; Robyn Begley, senior vice president and chief nursing officer of the AHA; Wright Lassiter, president and CEO of the Henry Ford Health System, Detroit, who is the 2022 chair of the AHA Board of Trustees; Bruce Flanz, president and CEO, MediSys Health Network, Queens, New York; and Ruby Kirby, CEO, West Tennessee Healthcare Bolivar and Camden Hospitals.
WHY THIS MATTERS
Hughes said, “The pandemic has put severe financial pressure on hospitals, including, but not limited to: higher expenses for labor, drugs and supplies; the astronomical costs of preparing for a surge of COVID-19 patients; months of essential hospital revenue being erased due to the combination of a forced shutdown and slowdown of regular operations for non-emergent care; and the high cost of treating COVID-19 cases, which tend to be incredibly resource intensive.
“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. 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 timeframes.”
During the past two years, hospitals and health systems have relied upon provider relief fund dollars and the temporary elimination of Medicare sequester cuts and other provisions that the AHA wants to see continued.
“In addition to those continuing needs, we now need additional support to bolster our stressed and strained workforce,” Hughes said in the letter to Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy.
WHAT THE AHA WANTS
The AHA wants Medicare sequester relief to be extended until the end of the COVID-19 public health emergency or Dec. 31, 2022, whichever is later. In December, Congress postponed the imminent 2% Medicare cuts to hospitals and physicians until April 2022, and then lowered the cut to 1% for an additional three months.
The AHA wants Congress to suspend Accelerated and Advance repayments for six months and allow for recoupment after the repayment suspension at 25% of Medicare claims payments for the following 12 months. In March 2020, both the Centers for Medicare and Medicaid Services and Congress made changes to the existing Accelerated and Advance Payments Programs to provide additional benefits and flexibilities due to the COVID-19 pandemic. Subsequently, Congress amended the repayment terms for providers and suppliers.
“These payments have served as a critical lifeline to hospitals and health systems, providing crucial funding to support the front-line heroes treating patients, build new sites of care to minimize the spread of the virus, and purchase the ventilators, drugs and supplies to care for the critically ill,” Hughes said. “However, the requirement to repay these funds places hospitals and health systems back in financial jeopardy while they work to recover from this unprecedented pandemic.”
The AHA also wants Congress to ensure that hospitals participating in the 340B program who may have experienced changes to their disproportionate share hospital adjustment percentage in fiscal years 2020 or 2021 due to the COVID-19 pandemic, are able to retain their 340B eligibility. The COVID-19 pandemic has altered hospitals’ payer mix, which for some hospitals temporarily lowered their DSH percentage, the AHA said. This has threatened the ability of some hospitals to maintain their eligibility for the 340B Drug Pricing Program.
THE LARGER TREND
At the outset of the pandemic, Congress established a Provider Relief Fund to help healthcare providers mitigate their financial losses.
Provider relief funds of $178 billion have been allocated to all providers and an additional $8.5 billion has been targeted for rural providers. The funds were disbursed through several tranches and targeted payments with strict guardrails as to how and in what timeframe they could be used, Hughes said.
In May 2021, the AHA urged the Department of Health and Human Services to distribute remaining provider relief funds.
As of Jan. 13, 2022, the average number of daily COVID-19 hospital inpatients had increased 35% compared to the prior week, the AHA said. The average number of daily adult intensive care unit COVID-19 patients increased 21%.
To date, there have been more than 65 million cases of COVID-19 in the U.S. and more than 850,000 deaths, the AHA said.
Last week, Dr. Anthony Fauci, chief medical advisor to the president, said that Omicron is likely to peak in most states by mid-February.
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