$8.5 Billion in Hot Spot Funding Released

August 3, 2020

The Department of Health and Human Services (HHS) announced on July 17 plans to distribute $8.5 billion in “hot spot” funding from the COVID-19 provider relief fund. The funding will be distributed to hospitals that experienced 161 or more COVID-19 admissions between January 1-June 10, 2020, or experienced a disproportionate intensity of COVID-19 admissions.

Hospitals will be paid $50,000 per admission, offset by any distribution received from the first hot spot disbursement. HHS continues to resolve the residual $1.5 billion in hot spot funds pending resolution of unspecified data issues.

Unfortunately, the amount of high impact funding for New York hospitals is inadequate to recognize their outsized contributions to the pandemic response. As the first region to surge, New York hospitals had far less time to prepare (only 2-3 weeks) and incurred far higher response costs than areas that surged later. During the March-April period, New York hospitals’ monthly operating expenses increased 23% on average while monthly operating revenue fell 38% on average. New York City hospitals cancelled all elective procedures by early- to mid-March and did not resume elective procedures until early June, nearly three months later. New York hospitals will be “footing the bill” for their remaining COVID-19 losses off their balance sheets—some hospitals do not have the resources to sustain their current operations. In the absence of significant additional funding, New York hospitals will be forced to implement massive cost reductions, including layoffs and furloughs. This notion is wholly inconsistent with preparations for a second COVID-19 wave in the New York metropolitan area.

Ensuring that provider relief funding flows to New York area hospitals is one of GNYHA’s top priorities. We are working closely with Senate Minority Leader Schumer and the New York Congressional delegation on this issue. Additional information on this distribution of funding can be found here.