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AAMC Recommends Criteria for Provider Fund

June 5, 2020

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CONTACTS
Allyson Perleoni, Senior Legislative Analyst

AAMC President and CEO David J. Skorton, MD, sent a letter on June 3 to Department of Health and Human Services (HHS) Secretary Alex Azar recommending criteria to prioritize additional disbursements of the Provider Relief Fund to health care providers caring for COVID-19 patients, including teaching hospitals and faculty physician practices.

The fund was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) and expanded in the Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139) [see Washington Highlights, March 27, April 24].

About $100 billion remains in the $175 billion Provider Relief Fund after several rounds of disbursement, including general distributions to hospitals and physicians practices, a “high-impact” distribution to hospitals treating large numbers of COVID-19 patients, and separate distributions to: rural providers, the Indian Health Service, and skilled nursing facilities [see Washington Highlights, April 24].  HHS has indicated that additional distributions for dentists and safety-net providers would be forthcoming, but it has not established a timeline.

In its letter to HHS, the AAMC recommended that HHS distribute the remaining funds according to the following principles:

  • Ensure that safety-net providers caring for vulnerable populations receive sufficient funding.
  • Distribute another targeted tranche of funding for providers in
    “high impact” areas, including both hospitals and physician practices, treating disproportionate numbers of COVID-19 patients.
  • Utilize the intensive care unit (ICU) bed data collected previously as a proxy to provide additional funding for hospitals with a higher share of ICU beds and consequently higher acuity patients.
  • Sufficiently recognize and reimburse the significant lost revenue incurred by teaching hospitals and faculty physicians.
  • Recognize the unique contributions and costs of faculty practice plans, including that not only do they have faculty physicians on the front lines but also residents and other learners.

The AAMC urged HHS to consider the unique needs of faculty practice plans that “provide critical services for their local communities” and “treat a disproportionate share of patients for whom social determinants of health, such as housing, nutrition, and transportation, contribute significantly to additional health challenges, adding greater complexity to their care and further adding to the challenge of treating COVID-19 patients.”

The AAMC noted that faculty physician practices have experienced tremendous losses that will never be recovered as they redeploy staff to treat COVID-19 patients, cancel or delay nonurgent elective surgeries, invest in telehealth, and incur costs associated with responding to COVID-19. The letter recommended that HHS should have the plans verify their status as a faculty physician practice and then distribute an allocation of funds to them.

The letter also recommended that HHS quickly disburse future allocations from the fund, citing that previous distributions have been delayed to a number of AAMC members. Additionally, the AAMC recommended that HHS continue disbursement of funds directly to providers and work to ensure clarity about the amounts providers are supposed to receive as well as consistency in Frequently Asked Questions and Terms and Conditions documents.

Senate Finance Committee Chairman Charles Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) and House Energy and Commerce Committee Chairman Frank Pallone (D-N.J.) and Ranking Member Greg Walden (R-Ore.) sent a letter on June 3 to Secretary Azar voicing concern about the delay in distribution of the remaining resources from the Provider Relief Fund to Medicaid providers. The letter requests that HHS answer a number of questions on its plan to distribute to Medicaid providers by June 10.

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