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COVID-19 Relief Funding for Healthcare Providers

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Summary

Avalere analysis of the distribution of provider relief funds indicates geographical concentration related to the number of reported COVID-19 cases.
Please note: This is an archived post. Some of the information and data discussed in this article may be out of date. It is preserved here for historical reference but should not be used as the basis for business decisions. Please see our main Insights section for more recent posts.

The Coronavirus Aid, Relief, and Economic Security Act and the Paycheck Protection Program and Health Care Enhancement Act established a combined $175 billion Provider Relief Fund for hospitals and other healthcare providers to support the national response to the COVID-19 pandemic.

A portion of the relief fund—$50 billion—was intended for general distribution to Medicare providers. By mid-April, the Department of Health & Human Services (HHS) had distributed an initial $30 billion in immediate funding to providers based on their share of total Medicare fee-for-service (FFS) reimbursement in 2019. HHS has decided to distribute the remaining $20 billion in a manner that augments the initial allocation with the goal of the total $50 billion of general distribution funds being allocated proportionally to providers’ share of total net patient revenue in 2018. HHS began the second distribution on April 24 and reported data on the providers who have signed an attestation confirming receipt of the payments and agreed to the certain terms and conditions as of May 4, 2020.

In addition to the general funds, the Provider Relief Fund provides targeted funding for specific purposes and/or certain provider types. So far, $12 billion for COVID-19 high impact areas were distributed to 395 hospitals that provided inpatient care for 100 or more COVID-19 patients through April 10, 2020. An additional $10 billion was distributed to rural healthcare providers, including rural acute care general hospitals, critical access hospitals, rural health clinics, and community health centers located in rural areas.


Avalere’s analysis of the combined $72 billion in provider relief funding distribution as compared to the number of reported COVID-19 cases indicates that states with the highest number of cases have received the largest cumulative funding based on both general and targeted allocation. While not surprising, the areas receiving the most funding are known COVID-19 hotspots such as New York and New Jersey, which mainly benefited from the high-impact area targeted allocation as well as general funds distribution based on their providers’ share of total net patient revenue in 2018.

Methodology

Avalere analyzed public data and information released by HHS and the Centers for Disease Control and Prevention COVID Data Tracker. Avalere excluded funding received by Pacific Island sovereign states of the Federated States of Micronesia, the Republic of the Marshall Islands, and Palau, known as the Freely Associated States.

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