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HHS Announces Additional Provider Relief Fund Distributions

June 12, 2020

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Allyson Perleoni, Senior Legislative Analyst

The Department of Health and Human Services (HHS) announced on June 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-related expenses or lost revenue due to COVID-19 response efforts.

The funds, totaling approximately $35 billion, will be released in three distributions: $15 billion for Medicaid and Children’s Health Insurance Program (CHIP) providers, $10 billion for safety net hospitals, and $10 billion for “hot spot” areas with high numbers of COVID-19 admissions.

Medicaid and CHIP Providers

To distribute the approximately $15 billion to Medicaid and CHIP providers, HHS opened a portal on June 11 that allows eligible providers to submit their annual patient revenue data for consideration as a factor in determining their payment from the fund.

Distributions to each provider will be at least 2% of reported gross revenue, and to be eligible, providers must have either directly billed their state Medicaid programs or Medicaid managed care plans for “health care related services” between Jan. 2018 and May 31, 2020. Providers who received funding in the initial general distribution will not be eligible to receive funds from this allocation.

Safety Net Hospitals

HHS will distribute $10 billion to “safety net” hospitals who meet all three of the following criteria:

  • Medicare Disproportionate Payment Percentage of 20.2% or greater.
  • Average uncompensated care per bed of $25,000 or more.
  • Profitability of 3% or less (based on total margin), as reported to the Centers for Medicare & Medicaid Services in its most recently filed cost report.

Recipients will receive a minimum distribution of $5 million and a maximum distribution of $50 million.

Additional “Hot Spot” Funds

Hospitals in “hot spots” will receive $10 billion from HHS. Amounts received by each hospital will be based on the number of reported COVID-19 admissions from Jan. 1, 2020, to June 10, 2020.

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