HHS pays $12 billion to compensate 395 hospitals for ‘high impact’ from COVID-19, and more may come

• Nearly 400 hospitals and health systems have received $12 billion in COVID-19 “high impact” grants.
• A total of $2 billion was tied to Disproportionate Share Hospital or uncompensated care eligibility.
• More such funding is available, so hospitals should continue to submit relevant data.

The federal government has begun paying hospitals that have treated large numbers of COVID-19 patients and may distribute more grants if high case counts occur elsewhere.

The U.S. Department of Health and Human (HHS) has disbursed 336 grants totaling $12 billion to 395 hospitals and health systems that provided inpatient care for 100 or more COVID-19 patients through April 10, according to a new update to an HHS FAQ. Those payments, categorized as “high impact” distributions, include systems that operate more than one hospital.

“The distribution takes into consideration the challenges faced by facilities serving a significantly disproportionate number of low-income patients and that inpatient admissions are a primary driver of costs to hospitals related to COVID-19,” the FAQ states.

Edward-Elmhurst Health, a two-hospital health system in Illinois, has received high-impact-area funding. Out of about 700 beds combined, 40 to 45 were taken in recent weeks by COVID-19 patients at the system’s Naperville hospital, as were about 60 at a facility closer to Chicago, said Denise Chamberlain, CFO.

The COVID-19 cases have required very high nursing ratios and high volumes of supplies, like PPE, that have become more costly, she said.

A recent American Hospital Association report estimated that from March to June 2020, hospitals and health systems will collectively lose $36.6 billion from treating COVID-19 patients, even after including health plan payments.

Pennsylvania hospitals also have garnered some of the high-impact-area assistance, said Jolene Calla, vice president of healthcare finance and insurance for the Hospital and Healthsystem Association of Pennsylvania.

“We are trying to track every opportunity because our hospitals are really, really struggling right now,” Calla said in an interview. “What started out as a very good year became a very bad year very quickly when this all hit.”

The high-impact-area funding is part of the $100 billion in provider assistance included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It is one of several specialized tranches of provider funding that have followed two initial rounds of general assistance totaling $50 billion. Other tranches have included $10 billion for rural providers and $400 million for the Indian Health Service.

Payment details

Per HHS, details on the distribution of high-impact-area funds include:

• $10 billion allocated based on a fixed amount per COVID-19 inpatient admission
• $2 billion distributed based on each hospital’s portion of Medicare Disproportionate Share Hospital payments and Medicare uncompensated care payments
• Automatic payments sent through Optum Bank with “CARES Act HighImpactAreaPmt*HHS.GOV” in the payment description
• Payments sent to a provider organization’s central billing office
• Payments made to provider billing organizations based on tax identification number

A recent report from Moody’s Investors Service (subscription required) said $5 billion of the high-impact-area provider funding went to New York hospitals.

“We estimate most hospitals have received [total federal assistance of] around 6 to 9 days cash, although there is significant variability in funding levels, particularly among rural hospitals and hospitals in high-impact areas,” Moody’s reported.

More grants available

HHS said providers should continue to update their capacity data and COVID-19 census data “to ensure that HHS can make timely payments in the event that the provider becomes a high-impact provider,” the FAQ states.

Hospitals can provide updated information through their CDC National Healthcare Safety Network account.