Blog Post

COVID-19: Federal Funding Available for Providers in Emerging Hot Spots

Covid 19 Funding For Hot Spots Web

On June 26, in response to rapidly rising COVID-19 cases in and around Austin, Dallas, Houston, and San Antonio, Texas Governor Greg Abbott issued an executive order re-suspending elective hospital services in the counties where those cities are located. Similar measures could soon be necessary in other emerging hot-spot states such as Arizona and Florida.

Providers in these states may be less familiar with available federal funding related to the testing and treatment of COVID-19 patients than their counterparts in initial hot spots. Further, providers in Texas, Arizona, Florida, and other emerging hot-spot states are likely still reeling financially from their initial suspensions of elective services, and a spike in costly COVID-19 cases will not improve their net income. Accessing all available federal support will be critical to mitigating financial losses.

Potential Sources of Federal Support

The federal government will reimburse providers at Medicare levels for COVID-19 testing and treatment of uninsured patients. Congress set aside $2 billion to pay for COVID-19 testing for the uninsured, but as of June 8, only about $11 million of that had been distributed, according to Modern Healthcare—partly due to providers’ unfamiliarity with the funding opportunity.

Additionally, the federal government is using part of the $175 billion provider relief fund from the CARES Act to pay for the treatment of uninsured COVID-19 patients. Providers must access a portal to request this funding. Medicare-level reimbursement for inpatient services provided to uninsured COVID-19 patients will not include the 20% increase to the DRG weight that is being applied to Medicare beneficiaries receiving inpatient treatment for COVID-19.

Providers can also look to the federal government’s previous funding distributions to providers in COVID-19 “high impact” areas to prepare for future opportunities. The first distribution, on May 7 for $12 billion, was provided to hospitals with 100 or more COVID-19 admissions between January 1 and April 10. The second distribution, covering COVID-19 admissions though June 10, had a June 15 deadline to submit admissions data.

While it is too late for providers in emerging hot spots to access most of funding from these two distributions, there may be a third high-impact distribution—and potentially more distributions after that—benefitting the newly emerging hot spots, because approximately $75 billion of the provider relief fund still has not been earmarked for a specific distribution.

Next Steps

To ensure access to the federal funding outlined above, providers in newly emerging hot spots need to:

  • Register for the portal to receive reimbursement for COVID-19 testing and treatment of the uninsured.
  • Review the data submission requirements and other information about the first two high-impact distributions to be prepared to access a third distribution if it is announced.

ECG is continuing to monitor the spread of COVID-19 and the support available from the federal government, private insurers, and other sources for impacted providers. We are frequently publishing updates and advice, so continue to check our thought leadership page for additional information.