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HHS Announces $4 Billion in Provider Relief Fund Allocations

July 17, 2020

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Allyson Perleoni, Senior Legislative Analyst
Len Marquez, Senior Director, Government Relations

The Department of Health and Human Services (HHS) announced on July 10 distribution plans for the next round of funding from the Provider Relief Fund established in 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].

The $175 billion fund was established to support health care providers’ increased related expenses or lost revenue due to COVID-19 response efforts. HHS will distribute approximately $4 billion in additional funds to further target “safety net” hospitals. $3 billion of the funds will build upon the $10 billion safety net tranche of funding announced on June 10 [see Washington Highlights, June 12], which determined eligibility for funds using three factors: a Medicare Disproportionate Payment Percentage of 20.2% or greater, an average uncompensated care per bed of $25,000 or more, and a profitability of 3% or less as reported on the most recent Medicare cost report. The HHS announcement revises the profitability criteria to be more expansive, allowing hospitals to use two consecutive years of profitability margins from the last five years.

HHS will also distribute an additional $1 billion for specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas. Finally, HHS announced that they will open a portal to allow dentists to apply for resources from the Provider Relief Fund. Approximately $60 billion remains unallocated in the Provider Relief Fund.

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