Hospitals that treated COVID-19 patients through early June to receive $10 billion in CARES Act funding

Ingrid Stiver Senior Manager, Health Research Institute, PwC US July 23, 2020

Last week, HHS announced that it would distribute an additional $10 billion starting this week to more than 1,000 hospitals in areas hit hard by COVID-19, the second round of funding to hospitals in high-impact pandemic areas. Payments in the second round will be $50,000 per eligible inpatient COVID-19 admission for hospitals averaging one COVID-19 admission per day between Jan. 1 and June 10 or exceeding the average ratio of COVID-19 admissions per total beds.

This second round of payments takes into account the first round in May. In the first round, $12 billion was disbursed to 395 hospitals that cared for 100 or more COVID-19 inpatients between Jan. 1 and April 10.

The $22 billion to hospitals is part of the $175 billion Provider Relief Fund established by the Coronavirus Aid, Relief and Economic Security Act (CARES Act) in March with $100 billion in funding. An additional $75 billion was appropriated for the fund by the Paycheck Protection Program and Health Care Enhancement Act in April.

Of the $175 billion Provider Relief Fund, $50 billion was distributed starting in April to more than 300,000 providers who bill Medicare fee-for-service. Of this general distribution, $30 billion was sent to providers the week of April 10, and an additional $20 billion was distributed starting April 24. The payments were designed to cover at least 2% of a provider’s total gross patient revenue.

In addition to the $72 billion allocated to the general distribution and hospitals in high-impact areas, $15 billion was allocated to providers participating in Medicaid/CHIP programs that had not received a general distribution payment, $11 billion to rural healthcare providers, nearly $5 billion to skilled nursing facilities, $500 million to the Indian Health Service, and $13 billion to safety net hospitals.

HRI impact analysis

Nearly $117 billion of the $175 billion Provider Relief Fund has been committed already, with an unspecified amount of funds also available for providers who test or treat uninsured individuals for COVID-19. The $58 billion in remaining funding likely will be welcomed by providers in states like Arizona, Florida, Mississippi and Texas that have seen hospitalizations due to COVID-19 surge and, in some cases, nonurgent medical services go back on hold in recent weeks.

Hospitals in states hit hard early in the pandemic have received large chunks of the $22 billion of high-impact funding. HRI found that hospitals in Connecticut ($564 million), Michigan ($1.1 billion), New Jersey ($2.3 billion) and New York ($5.7 billion) are set to collectively receive nearly 50% of the high-impact funding allocated so far. Comparatively, hospitals in Arizona ($173 million), Florida ($573 million), Mississippi ($104 million) and Texas ($405 million) are set to collectively receive 6% of that funding.

HRI analyzed providers in those states to see how they compared when considering the two rounds of high-impact funding ($22 billion) and the first round of general distribution funding ($30 billion of the $50 billion total) from the Provider Relief Fund along with cumulative hospitalizations in those states as of July 21, according to the COVID Tracking Project.

Providers in Arizona, Florida and Mississippi were set to receive just over $125,000 per COVID-19 hospitalization-to-date on average, while providers in Connecticut were to receive $88,000, New York $84,000 and New Jersey $152,000 per COVID-19 hospitalization-to-date on average. (Note: A state-by-state allocation of the second round of general distribution funding of $20 billion was not available. Cumulative hospitalization data for Michigan and Texas were also not available.)

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Ingrid Stiver

Senior Manager, Health Research Institute, PwC US

Erin McCallister

Senior Manager, Health Research Institute, PwC US

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