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AAMC Recommends Priorities for CARES Act Relief Fund

April 3, 2020

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Allyson Perleoni, Senior Legislative Analyst
Phoebe Ramsey, Sr. Regulatory Analyst, Quality & Payment Policy

AAMC President and CEO David J. Skorton, MD, sent a letter on April 1 to Department of Health and Human Services (HHS) Secretary Alex Azar recommending criteria to prioritize the disbursement of the $100 billion Provider Relief Fund to health care providers caring for COVID-19 patients, including teaching hospitals and physician practices.   The Fund was created by the recently passed  Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) to prevent, prepare for, and respond to the novel coronavirus [see Washington Highlights, March 27].

In determining the process, methodology, and funding levels for disbursement from the fund, the AAMC asked the HHS to give priority to the following criteria for which data is easily known:

In distributing funding for hospitals, prioritize funding levels for facilities that have enhanced capabilities, experience, and have taken steps to mount a response, as demonstrated through the following criteria:

  • Historical experience managing care for highly complex patients, as demonstrated by:
    • Case mix index (CMI).
    • Patient transfers received.
    • Number of Intensive Care Unit (ICU) beds.
  • Care for financially vulnerable patient populations, as demonstrated by Disproportionate Share Hospital (DSH) patient percentages, or a comparable measure.
  • Size, as demonstrated by number of beds.
  • Number and complexity of COVID-19 patients.

In addition, the AAMC recommended that providers in current “hot spots” be given particular support to offset the current expenses they are sustaining. Additionally, there should be robust support for providers that have met the above criteria in communities that have not yet experienced, but are preparing vigorously for, a pending surge in cases.

The letter notes that AAMC believes that using these criteria would allow HHS to disburse funds quickly to hospitals, recognizing that hospitals will ultimately need to demonstrate the necessity for these funds through some type of reconciliation process.

The letter also recommends that in distributing funding for physician practices, HHS should prioritize physician practice groups that do not qualify for small business loans made available by the CARES Act. The level of disbursement should be based on lost revenue as determined by the prior six-month period or a comparable month(s) from the prior year. Also, providers will be affected in different ways and at different times during this pandemic, so they should have the opportunity to apply for and receive funds multiple times for both retrospective and prospective needs.

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