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Biden to use $2 billion from Provider Relief Fund as besieged hospitals push for aid

The Department of Health and Human Services announced the latest funding as health care groups emphasized how the coronavirus had overwhelmed hospitals.

The Department of Health and Human Services will pull an additional $2 billion from the Provider Relief Fund on Tuesday to aid hospital and other medical service providers as they battle through the latest coronavirus surge.

The $2 billion will go out to more than 7,600 providers across the country after the agency released nearly $9 billion last month. More than 74,000 providers will have gained access to the latest round of funding, according to the Department of Health and Human Services.

“These funds serve as a lifeline for our nation’s health care providers, helping them to recruit and retain staff and deliver care to their communities,” Health and Human Services Secretary Xavier Becerra said in a statement. “And today’s announcement is just the latest example of our dedication to ensuring that providers have the resources they need to meet the evolving challenges presented by COVID-19.”

This latest round of cash will be delivered as hospital groups demand that Congress provide greater access to the fund and ask for billions of dollars in further support.

The omicron and delta waves of the coronavirus were major financial hardships and massive strains on their workforces, the groups said.

“We are now in need of additional immediate support from Congress and the administration in order to continue standing strong and to be able to provide timely access to life-saving health care to your constituents,” Stacey Hughes, the executive vice president of the American Hospital Association, wrote Thursday in a letter to congressional leaders. “The current surge has impacted hospitals in ways not seen previously.” 

The Provider Relief Fund, or PRF — which was established in the Coronavirus Aid, Relief and Economic Security Act in March 2020 — aims to help medical providers, such as hospitals, recoup expenses and lost revenue caused by the pandemic.

Congress allocated nearly $180 billion to the COVID-19 Provider Relief Fund and $8.5 billion more to a rural hospital fund.

The huge sums of cash have been a lifeline for hospitals and medical providers overwhelmed by Covid cases. Many states and hospital groups have paused elective operations as they make room for coronavirus patients. That has further limited hospitals’ ability to earn money — as costs for doctors, nurses and medical supplies surge.

The point was emphasized in the letter the American Hospital Association sent to congressional leaders last week demanding greater access to the funds.

The group said Congress needed to pressure the administration to distribute the remaining pot of money in the Provider Relief Fund immediately, extend the deadline to use it, expand the criteria to spend it, provide an additional $25 billion to health care providers who have lost revenue in the latest coronavirus waves and push cuts in Medicare payments to the end of the year.

The association intends to hold a call with reporters Tuesday to discuss the need for greater funding and the toll of the pandemic on hospitals and the medical workforce.

“While the PRF has been a lifeline for health care providers, no distributions from the PRF have been made or announced for expenses related to the delta or omicron variant surges, despite steep increases in cases, hospitalizations and deaths,” Hughes wrote. “The lack of PRF dollars to address issues wrought by the delta and omicron surges has left many hospitals facing overwhelming financial and operational challenges.”

Meanwhile, the fund is expected to face greater scrutiny from the federal government, as well.

Image: Medical workers treat a patient who is suffering from the effects of Covid-19 in the ICU at Hartford Hospital in Hartford, Conn., on Jan. 18, 2022.
Medical workers treat a patient who is suffering from the effects of Covid-19 in the ICU at Hartford Hospital in Hartford, Conn., on Jan. 18, 2022.Joseph Prezioso / AFP - Getty Images

The HHS Office of Inspector General announced last week that it would perform an audit of the fund, with a report expected next year. The office said it is examining whether providers who had accepted money from the fund had overcharged coronavirus patients considered outside the providers’ insurance networks.

When providers accepted the money, they agreed to terms that they could not charge Covid-19 patients “in excess of what the patients otherwise would have been required to pay if the care had been provided by in-network providers,” the announcement said.

“We will perform a nationwide audit to determine whether hospitals that received PRF payments and attested to the associated terms and conditions complied with the balance billing requirement for COVID-19 inpatients,” it added.

There are eight other ongoing audits and evaluations involving the Provider Relief Fund going back to 2020. Seven of them are expected to be finished this year.