Questions Remain as Administration Distributes $30B of $100B from CARES Act Emergency Funds

The CARES Act created a Public Health and Social Services Emergency Fund of $100 billion to help health providers and responders, social services and state and local governments address the coronavirus. The Department of Health and Human Services (HHS) is responsible for distributing those funds.

Politico Pro reported that HHS is in the process of distributing the first $30 billion from this fund, focusing that tranche on Medicare providers. This has prompted pushback from Medicaid-funded essential hospitals, as well as the Medicaid and CHIP Payment and Access Commission (MACPAC – see their letter here). At the time of this writing, HHS has not publicly shared how it will distribute the remaining $70 billion. As mentioned in our feature article, ANCOR wrote to HHS to request that a portion of that funding be dedicated to Medicaid disability providers. This is part of a two-prong approach, as we are also advocating for Congress to replenish the Fund and include disability funding in future COVID-19 legislative packages.

Regarding the first $30 billion tranche, as reported by Politico Pro:

“The Trump administration is planning to dole out $30 billion to health care providers from a new bailout fund within days, as hospitals and doctors warn they desperately need the money to combat the coronavirus.

The funding, included in the recent $2.2 trillion rescue package, will be divvied up based on how much providers bill Medicare and come with ‘no strings attached,’ said CMS chief Seema Verma during tonight’s White House briefing.

‘The health care providers that are receiving those dollars can essentially spend that as they see fit,’ Verma said.

The massive bailout package approved by Congress last month included $100 billion for hospitals and providers to deal with a flood of coronavirus patients and lost revenue from the cancellation of elective procedures. It gave wide latitude to the Trump administration on how to spend the money, unleashing furious lobbying from hospital and provider groups in Washington.

The lion’s share of the initial $30 billion will go to hospitals, since they have more Medicare volume. Verma acknowledged that this process may overlook other providers but said it was necessary to get funding out as quickly as possible.

Health care providers, according to Verma, ‘said the most important thing is to get these dollars out as quickly as possible.’

The first funding round will be provided in direct grants to providers who qualify. Verma said CMS will follow up with another pot of money that will focus on providers who get little if any Medicare funding, such as nursing homes, pediatricians and children’s hospitals. The agency has also separately fast-tracked about $34 billion in loans to providers and hospitals to help offset lost business during the pandemic, Verma said.

The Trump administration has also said it would use the hospital bailout fund to cover the costs of treating uninsured coronavirus patients, but it has yet to detail those plans.”