Hospital CEOs blast distributing stimulus funds based on Medicare revenue

Hospital CEOs are blasting HHS' decision to distribute the first $30 billion in emergency funding based on Medicare fee-for-service revenue, according to Kaiser Health News.

HHS said April 10 it would allocate money to hospitals and providers based on their historical share of revenue from the Medicare program, rather than the burden caused by the coronavirus or number of uninsured patients treated. 

Kenneth Raske, CEO of the Greater New York Hospital Association, wrote in a memo to association members that the method is "woefully insufficient to address the financial challenges facing hospitals at this time, especially those located in 'hot spot' areas such as the New York City region."

Another CEO, Carlos Migoya of Jackson Health, said that the way the bailout money is being distributed "could jeopardize the very existence" of the hospital. Jackson Health is a safety-net hospital in Miami, one of the harder-hit cities in the U.S.

Bruce Siegel, MD, president and CEO of America's Essential Hospitals, said the basis of distributing the funding could be a disadvantage for hospitals most in need.

"The allocation formula for this tranche will leave many essential hospitals behind just when they need aid the most," Dr. Siegel said. "Our hospitals are struggling now to manage surging patient volume, staff and supply shortages, and other severe challenges as their limited cash reserves dwindle."

America's Essential Hospitals represent more than 300 safety-net hospitals in the U.S., which care for large numbers of uninsured and Medicaid patients. 

Dr. Siegel added that because they treat a large share of uninsured and Medicaid patients that a "distribution formula based on Medicare fee-for-service revenue misses the mark for many of our members and their patients."

An HHS spokesperson told Kaiser Health News the agency decided to use Medicare revenue as the basis of distribution because it "allowed us to make initial payments to providers as quickly as possible."

The $30 billion is part of $100 billion in emergency stimulus funding earmarked for hospitals from the Coronavirus Aid, Relief, and Economic Security Act.

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