Shore Medical Center, other community hospitals left out of COVID-19 aid

Shore Medical Center, a nonprofit community hospital in Somers Point, N.J., says it is being left out of the federal aid allocated to hospitals to cover expenses or lost revenues from the COVID-19 pandemic. And Shore Medical Center says it is not alone. 

"There are a lot of hospitals that fall in a similar niche as us, where we don't qualify for most of the aid," explained Rob Wood, director of finance for Shore Medical Center.

In response to the COVID-19 pandemic, Congress allocated $175 billion in provider relief aid to hospitals across the U.S. HHS announced plans to distribute the funds in several ways, including $50 billion in general distribution based on Medicare claims or net patient revenue; $12 billion to 396 providers in areas that treated a high number of COVID-19 patients; $10 billion to rural providers and $10 billion to safety-net providers. 

Despite allocating the funds in several ways, Mr. Wood said many hospitals, including Shore Medical Center, are being left out of the distribution due to ineligibility.

For example, Mr. Wood said the medical center doesn't quite match HHS' definition of a rural hospital, it isn't classified as a safety-net provider, and it didn't meet HHS' minimum threshold of treating 100 COVID-19 patients prior to April 10 to qualify for the high-impact funds.

In particular, hospital officials said Shore Medical Center likely treated symptomatic COVID-19 patients as far back as January, but because COVID-19 testing didn’t start until mid-March these patients are not included in the HHS minimum threshold of 100 patients admitted before April 10.

Shore Medical Center has received just $3.8 million in relief aid through the general distribution, which is not nearly enough to make up for the revenue losses attributed to the pandemic, Mr. Wood said. 

The medical center, from mid-March to the end of May, saw a revenue loss of $24 million. This was attributed to a volume dip after the state suspended elective procedures. 

"From an inpatient perspective, we lost about 40 percent of volume and 55 percent of emergency department volume," Mr. Wood said. "The biggest issue we had was the inability to generate revenue due to the elective procedure mandate."

In response to the revenue loss, the medical center has focused on expense reduction, implementing an 11 percent reduction in nonclinical staff, cutting employee hours and reducing salaries and 401(k) contributions.

"We implemented a lot of expense reductions right away. As things start to improve we can hopefully bring employees back. This wasn't meant to be a permanent reduction," Mr. Wood said. 

Mr. Wood said that he applauds HHS for its efforts in helping providers get compensated for losses due to the pandemic, but hopes that the distribution of funding can become more equitable. 

"Shore Medical abided by the state mandate to suspend electives, our staff still went to work each day and assumed the same risks as other healthcare workers … but we don't qualify for the federal [relief] funding," he said.

More articles on healthcare finance: 
Pennsylvania health system cuts 10% of workforce amid pandemic losses
Mayo Clinic to restore pay, end furloughs months early
AMA adds CPT code for COVID-19 antigen testing

 

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