Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma announced at last night’s Trump Administration COVID-19 Task Force press conference that CMS will release an initial $30 billion distribution from the $100 billion health care provider relief fund in the CARES Act.

It is expected that every Medicare provider will receive a distribution from the $30 billion pool based on its proportionate share of Medicare fee-for-service (FFS) payments nationally (Medicare Part A and Part B). Administrator Verma stated that providers receiving regular Medicare payments electronically would not need to apply and would receive funding automatically either later this week or early next week. Providers that do not receive their Medicare payments electronically would need to complete a simple application form. No details on this process have been released.

This distribution methodology 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. It also disadvantages providers in regions with high Medicare Advantage penetration (because they are only using Medicare FFS payments), as well as providers treating high proportions of Medicaid beneficiaries. GNYHA is modeling the distribution to understand how the funding might be allocated.

The Trump Administration has signaled that it will provide future rounds of funding. While policies for future distribution are still being developed, GNYHA understands that funding would target COVID-19 “hot spots” and address provider types not addressed in the first round, such as children’s hospitals and nursing homes. The Administration has also stated that it will use some of the $100 billion fund to reimburse COVID-19 care provided to the uninsured.

GNYHA sent a letter to Health and Human Services Secretary Alex Azar earlier this week highlighting the need to prioritize funding to providers in “hot spot” areas to address the massive expenses related to health care “surge” activities, treating COVID-19 patients, and lost revenues. Our proposal includes a methodology for identifying and funding “hot spot” areas and overcomes the three major weaknesses that we have identified with the Trump Administration’s approach. GNYHA will continue to advocate both with the Administration and in Congress for additional funding to address these financial challenges.

We are in near-daily contact with Senate Democratic Leader Chuck Schumer as we try to remedy this allocation problem. I am grateful to Senator Schumer for continuing to fiercely push for more Federal funding for hospitals as they respond to COVID-19.

GNYHA has also developed a comprehensive resource of the various financial assistance opportunities for hospitals impacted by COVID-19.

We will continue to provide updates as further information becomes available.