Rural hospitals maybe on the hook for millions of dollars

As the pandemic seems to worsen, rural hospitals find themselves in a real bind. It seems the Department of Health and Human Services changed the rules after hospitals were given federal relief, and now, some of them may be on the hook for millions of dollars.

In late May, Congress passed the CARES Act to help businesses, individuals, and healthcare providers get through the pandemic. For hospitals, the legislation included the Provider Relief Fund.

National Rural Hospital Association Vice President of Government Affairs, Carrie Cochran McLain says that the fund is meant to cover lost revenue from the pandemic.

According to McLain, “A number of hospitals and healthcare providers had to limit their in person visits or cancel procedures or just saw a reduction in the number of payments in order to reduce the spread of COVID-19, or to conserve PPE that may be needed for dealing with COVID patients.”

Hospitals have already received these funds, but as HHS has been rolling out the program, the definition of lost revenue has changed, allowable expenditures has changed, and even the auditing requirements are different from the start of the program.”

“The definition of things, like use of dollars to do capital... we may need to change the HVAC system, update the HVAC systems, so that the virus doesn’t spread throughout the facility,” she states. “The definition that HHS is using is making the use of the Provider Relief Funds not possible for those kinds of expenditures.”

She says that 134 rural hospitals have closed over the past ten years and more could be forced to close their doors if they face unexpected financial requirements from the government.

“We’ve seen 17 rural hospitals close this year, much due to COVID,” she adds. “So, there is a lot of concern from providers that spent funds that they received with the intention and using it as they thought Congress intended to then have to pay back some of those dollars for expenditures that have already gone out, will significantly hurt a number of those folks and could lead to further hospital closures.”

The latest round of COVID relief, passed this week, includes an additional $3 billion dollars for the Provider Relief Fund, and hopefully, a solution to the confusion: “The legislation or the law, thankfully, does require some clarifying language with the administration around some of the issues that we identified as being problematic.”

NRHA plans to continue working with the administration to allow hospitals to use the dollars as intended on the frontlines of COVID-19 response.


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