AHA To HHS: Give All Hospitals More Time To Spend Relief Funds

Inside Health Policy

June 23, 2021 10:43 am

Read AHA Letter

The American Hospital Association flipped on Tuesday (June 23) from praising HHS’ revised provider relief guidance to saying the phased spending deadlines are unfair and HHS should give all hospitals more time to spend their relief funds — either until the end of the public health emergency or until June 30, 2022, the final spending deadline currently set for only new recipients in HHS’ latest guidance.

HHS’ phased provider relief spending deadline strikes a balance between providers who finally received their relief after waiting months to get it and those who received and immediately spent their relief. While hospitals and other providers support the new guidance broadly, AHA points out advocates had asked for all providers to receive an extension.

AHA, the Medical Group Management Association and lawmakers had earlier asked HHS to tie the spending deadline to the public health emergency, which the Biden administration has indicated could last the entirety of 2021. Nursing homes had asked HHS to extend the June 30 spending deadline to Dec. 30, 2022. Providers said the additional time was necessary as providers have on-going costs related to the pandemic.

HHS stopped short of a complete extension of the June 30 spending deadline in its guidance released June 11. The department instead created four provider relief payments periods, giving providers one year to spend all their relief.

This means the upcoming deadline of June 30 applies to distributions received from April 10, 2020 to June 30, 2020. The next deadline of Dec. 31 applies to monies received July 1, 2020 to Dec. 31, 2020, and next year’s June 30 spending deadline will be for the period Jan. 1 to June 30.

AHA initially cheered HHS’ new guidance like other advocates, but in its letter to HHS Tuesday (June 22) raises concerns that the phased spending deadline is unfair for rural hospitals and hospitals serving high numbers of Medicaid and uninsured patients.

“While we had previously requested an extension and appreciate HHS’ action, we believe that providing additional flexibility is necessary, fair and appropriate,” AHA says, arguing the new guidance disadvantages certain providers without giving a clear reason. “Specifically, some providers will need to spend their funds well before others simply because they received a [provider relief] payment earlier in the distribution process.”

The AHA letter points out what Inside Health Policy previously reported that HHS began distributing a large chunk of the $178 billion provider relief fund early on. The first general distribution was set at $46 billion, while $20 billion in targeted relief for hospitals in so-called hot spots, $13 billion for safety net hospitals and $11 billion for rural facilities were all announced and distributed before June 30, 2020.

The other general and targeted distributions, including the problematic second general distribution, went to providers no earlier than July 3, 2020, according to the Government Accountability Office. HHS is still distributing provider relief.

AHA also raises concerns that some providers won’t be able to use provider relief to address the added costs that will go along with the new Occupational Safety and Health Administration Emergency Temporary Standards, which require certain health care employers to implement a plan that addresses COVID-19 hazards in the workplace.

Some providers think the presence of a fourth payment period in the newly released HHS guidance means the next provider relief distribution will be announced in July.

The last distribution was announced in October, and there is an estimated $24 billion left in unallocated provider relief.

“I think the FAQs that were released this time, in my opinion, look a lot more complete,” Donna Martin, American Network of Community Options and Resources director of state partnerships & special projects, said. “It looks like they’ve got a year’s worth of kind of managing these portals, dealing with both the technical side and the understanding — making it understandable by people that received those funds.”

This is a significant step as previous guidance seemed to change daily and at one point, Congress had to step in to clarify how it wanted HHS to let providers calculate their lost revenue due to COVID-19.

While AHA says additional spending flexibility is needed, some providers are praising the new HHS guidance.

One of those is a Pennsylvania provider that will benefit from the guidance’s final spending deadline. SPIN Inc., which serves children and adults with intellectual and developmental disabilities, waited eight months — July 15, 2020, until March 8 — to receive its $1.47 million in provider relief. It will have until June 30, 2022, to spend all this relief.

In the meantime, SPIN furloughed or cut administrative staff while using state COVID-19 relief to give its low-paid, direct care staff hazard pay and overtime.

“SPIN is a provider in an historically underfunded system in which we have struggled to pay Direct Support Professionals the wages that they deserve,” Patti Parisi, SPIN, Inc. chief financial officer, said in an email. “Due to the COVID-19 pandemic, we are now experiencing an unprecedented level of employee vacancies.”

Parisi said SPIN needs additional COVID-19 relief so it can pay a family-sustaining wage to recruit and retain its direct care staff. It will also need better state reimbursement rates so it can sustain the higher, more competitive wages into the future and stabilize a fragile system.

Northern Nevada Emergency Physicians, which received $801,139 in total from initial provider relief distributions, according to HHS, welcomed the clarity offered by the new guidance. Karen Massey, the organization’s executive director, said every piece of guidance providers receive creates certainty and stability.

“Understanding the final disposition of [provider relief] and all these programs allows us to demonstrate the appropriate use of these funds for taxpayer transparency and remove any uncertainty about our ability to retain the funds,” Massey said in an email. “This allows medical practices to pivot to these new challenges with the financial certainty we need to serve our patients through hiring staff, investing in technology and maintain the new level of care required by COVID-19.”

Massey said in addition to helping providers pay for personal protective equipment, COVID-19-positive patients and testing supplies, provider relief offered financial stability when there was very little certainty in business operations.

“For most medical practices, there was this odd dichotomy of seeing substantially reduced volume, yet knowing that there was pent-up demand from the routine conditions we care for, and also new challenges of COVID-19,” Massey said.

Michael Strazzella, Buchanan, Ingersoll and Rooney federal government relations leader, said HHS might not have given providers everything they asked for, but the new timeline gives them the needed stability to rebuild and plan what their post-COVID-19 normal will look like.

“While the community was asking for the June 30 date to be moved, they [HHS] did address other pieces of it and there are other benchmarks to now be used,” Strazzella said. “In many ways, they have responded to the community’s concerns.” — Dorothy Mills-Gregg (dmillsgregg@iwpnews.com)