Hospitals receive $30 billion in CARES Act funding via direct deposit

“@HHSGov Begins Immediate Distribution of $30 Billion to Hospitals and Health Care Providers…” HHS Sec. tweeted Alex Azar.

The Centers for Medicare and Medicaid Services announced the release of $30 billion of the $100 billion earmarked for hospitals in the Coronavirus Aid, Relief and Economic Security Act.

This money is separate from the $34 billion in prepayment loans to suppliers announced last week. CMS then increased the amount of the Accelerated and Advance Payments program to $51 billion.

Hospital and provider groups are calling for all funds to be released, and those representing essential hospitals and research bodies are concerned that the money is not targeting those needs.

CARES Act funds began distribution to providers via direct deposit on April 10. All facilities and providers that received fee-for-service reimbursements from Medicare in 2019 are eligible for the distribution.

Providers will receive a portion of the initial $30 billion based on their share of total Medicare fee-for-service reimbursements in 2019. Total FFS payments were about $484 billion in 2019, HHS said.

Providers can estimate their payout by dividing their 2019 Medicare FFS payments (excluding Medicare Advantage) by $484 billion and multiplying that ratio by $30 billion.

For example, a community hospital that billed Medicare $121 million in 2019 would divide $121 million by $484 million, then multiply that amount by $30 million, for a result of $7,500,000. .

Even providers who have ceased operations as a result of the COVID-19 pandemic are eligible to receive funds as long as they provided diagnostics, testing, or care to people with possible or actual cases of COVID-19 . The Department of Health and Human Services generally considers each patient to be a possible case of COVID-19, HHS said.

Payments to practices that are part of large medical groups will be sent to the group’s central billing office.

As a condition of receiving these funds, providers must agree not to ask a COVID-19 patient to collect direct payments greater than what the patient would otherwise have had to pay if the care had been provided by an in-network provider.

HHS has partnered with UnitedHealth Group to provide prompt payment through Automated Clearinghouse account information on file with UHG or CMS.

Automatic payments will come to suppliers via Optum Bank with “HHSPAYMENT” as the payment description.

Suppliers who normally receive a paper check for reimbursement from CMS will receive a paper check in the mail in the coming weeks.


CARES Act funds do not have to be repaid. Hospitals need immediate funding to make up for lost revenue from money spent responding to the coronavirus pandemic and the loss of elective surgeries.

The American Hospital Association has called for an immediate influx of funds as hospitals cut spending through measures such as laying off staff and cutting doctors’ salaries.


On March 27, President Trump signed the bipartisan CARES Act which provides $100 billion in relief funds to hospitals and other health care providers on the front lines of the coronavirus response.

This funding will be used to cover health care expenses or lost income attributable to COVID-19 and to ensure uninsured Americans can get testing and treatment for COVID-19.


While vendors applauded the release of funds, the response varied.

The American Hospital Association has urged HHS to release remaining CARES Act funds. “In particular, additional targeted relief for hospitals in hotspots, children’s hospitals, rural hospitals, and hospitals with a high percentage of payments under Medicare Advantage needs immediate assistance,” said Rick Pollack, president and CEO of the American Hospital Association. “Additionally, the hospitals that received funding today will clearly need additional help.”

U.S. essential hospitals said Medicare’s fee-for-service allocation formula would leave many essential hospitals behind. “Our hospitals are currently struggling to manage increasing patient volumes, staffing and supply shortages, and other serious challenges as their limited cash reserves dwindle. Through their mission, these hospitals support a large number of uninsured and Medicaid patients in communities where COVID-19 has exposed persistent health and health care disparities.Thus, a distribution formula based on Medicare fee-for-service revenue misses the target for many of our members and their patients,” said Dr. Bruce Siegel, President and CEO.

Privia Health CEO Shawn Morris said: “While the CARES Act provider relief funding is greatly appreciated and helpful, many medical practices will remain on the edge of a significant financial cliff related to decreases. volumes by 40% to 60%, or even more for some specialties, resulting in a dramatic reduction in revenue Providers across the country have had to make extremely difficult decisions to lay off staff and reduce hours in order to stay open and available for their patients.

The Association of American Colleges told House and Senate leaders that hospitals and teaching practices continue to struggle financially. “As you negotiate an interim relief package, we strongly support the inclusion of at least an additional $100 billion in the vendor relief fund authorized in the United Nations Humanitarian Aid, Relief, and Economic Security Act. coronavirus and urge you to also provide $26 billion in emergency appropriations to support research personnel during this national emergency.”

Twitter: @SusanJMorse
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