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COVID-19 Provider Relief Funding and Future Allocation Considerations

Summary

The Coronavirus Aid, Relief, and Economic Security (CARES) Act appropriated $100 billion for the Public Health and Social Services Emergency Fund—known as the Provider Relief Fund (PRF)—and subsequent legislation appropriated an additional $75 billion through the Paycheck Protection Program and Health Care Enhancement Act.

The purpose of the PRF is to support hospitals and other healthcare providers in the national response to the COVID-19 pandemic. As of August 24, 2020, over $120 billion of these funds have been allocated and nearly $75 billion in provider payments have been made.

The purpose of this analysis was to learn more about the PRF payments to acute care hospitals. Understanding the distribution of relief funding to date can help inform future funding allocations to providers most in need, including acute care hospitals in areas with the highest COVID-19 case rates and safety-net providers.

Approach and Key Findings

Avalere examined PRF payments to acute care hospitals to learn more about receipt of funding by hospital characteristics (e.g., ownership and bed size) and by characteristics of counties in which hospitals are located (e.g., COVID-19 impact and socioeconomic factors).

Avalere identified 1,605 hospitals (49% of acute care hospitals) receiving provider relief payments. The mean payment to acute care hospitals receiving PRF payments was $15.3 million and the median was $6.7 million. PRF payment amount per hospital bed, rather than total payment amount, was examined to account for differences in hospital size.

The findings highlight areas where greater financial assistance may be important to support acute care hospitals experiencing or at risk for experiencing significant COVID-19 impact. For example, close to one-third of hospitals receiving a PRF payment and located in counties with the highest COVID-19 cases per population received among the lowest PRF payments per bed. The findings also indicate that a higher proportion of hospitals serving larger non-Hispanic Black and Hispanic populations received among the lowest PRF payments relative to hospitals located in areas serving smaller non-White populations (Table 1).

Table 1. PRF Payments to Acute Care Hospitals by Hospital and Population Characteristics
Characteristic n
(row)
<$25,000
per bed
n=376
$25,000–$49,999
per bed
n=412
$50,00–$99,999
per bed
n=362
>$100,000
per bed
n=455
Profit Status
Not-for-profit 998 19% 28% 22% 30%
Proprietary 338 42% 26% 20% 12%
Public 269 15% 15% 26% 45%
Beds
<100 beds 585 18% 15% 24% 42%
100–499 beds 879 11% 34% 28% 27%
>500 beds 141 23% 26% 23% 28%
Medicaid Ratio
<15% 427 26% 28% 26% 21%
15%–24% 621 21% 28% 23% 28%
>25% 557 24% 21% 20% 35%
Census Division
East North Central 292 29% 31% 21% 18%
East South Central 134 17% 31% 28% 24%
Middle Atlantic 189 16% 10% 31% 43%
Mountain 102 29% 26% 12% 32%
New England 81 12% 31% 21% 36%
Pacific 152 21% 30% 24% 26%
South Atlantic 157 24% 16% 32% 28%
West North Central 246 17% 34% 17% 32%
West South Central 252 34% 22% 19% 25%
COVID Cases (per 100,000 population)
<500 248 15% 15% 31% 39%
500–999 390 20% 32% 23% 26%
1000–1499 299 25% 36% 18% 20%
1500–1999 282 26% 25% 24% 24%
>2000 386 29% 19% 19% 33%
COVID Mortality (per 100,000 population)
0 455 17% 11% 28% 43%
<25 397 30% 41% 17% 13%
25–74 482 26% 31% 24% 20%
>75 271 20% 18% 20% 42%
Race
Non-Hispanic Black
<5% 582 19% 21% 24% 36%
5%–14% 530 26% 29% 23% 22%
>14% 493 26% 27% 21% 26%
Hispanic
<5% 535 20% 21% 27% 32%
5%–14% 525 22% 32% 21% 25%
>14% 545 28% 24% 20% 28%

Implications for Acute Care Hospitals and Future Provider Relief Funding

The findings largely confirm the receipt of PRF payments as intended. However, the results also highlight the importance of continued support for acute care hospitals and safety-net providers serving communities with high COVID-19 impact as well as for communities at risk for COVID-19 impact as providers prepare for future COVID-19 surges. Future funding allocation may consider prioritizing the following criteria based on the findings presented in this analysis to ensure access to care and treatment for COVID-19.

Continued Focus on High Impact Areas

Many acute care hospitals located in areas with significant COVID-19 impact may not be receiving resources that could help meet community need. While acute care hospitals receiving PRF payments in early surge areas received among the highest levels of funding per bed, hospitals in more recent surge areas received lower levels of payment, highlighting potential lags in distribution of funds to impacted areas, the need to monitor high impact criteria, and the need to facilitate distribution of resources in anticipation of surges.

Continued Focus on At-Risk Communities

PRF allocations to date have included a focus on Medicaid population and safety-net providers. However, as the pandemic has continued, the disproportionate impact of COVID-19 on vulnerable populations has become more evident. The CDC has reported that COVID-19 infection rates are 2.8 times higher in Hispanic and Latino populations and 2.6 time higher for Black and African-American people. Similarly, the CDC has reported increased rates of hospitalization among Hispanic and Latino (4.6 times higher) and Black or African-American people (4.7 time higher). Considering more targeted funding to acute care hospitals treating at-risk populations identified by demographic and socioeconomic factors may help ensure that resources and treatment are available to communities at risk of COVID-19 case surges.

Methodology

The primary data source for this analysis was the Department of Health and Human Services PRF data set. Records for payments to acute care hospitals were identified based on keyword analysis of the provider name (e.g., hospital, medical center, health system). Records were merged to short-term acute care hospitals in the 50 states and DC from the FY 2020 Final Rule Impact File by name and city using text matching algorithms in SAS followed by manual review. Through this process, Avalere was able to identify PRF payments to 1,605 acute care hospitals.

Hospital characteristics—including bed size, ownership status, geographic location, teaching hospital status, and Medicaid ratio—were obtained from the Provider Specific File and the Impact File. County-level demographic and socioeconomic characteristics were added to the analytic file from the County Health Rankings data from Robert Wood Johnson Foundation. Data on county-level COVID-19 cases and deaths were obtained from the Centers for Disease Control and Prevention.

Funding for this research was provided by Gilead Sciences. Avalere retained full editorial control.

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