Navigating pandemic relief options

May 7, 2020 |  Government Regulations, C-level, Healthcare IT, Coronavirus

Scientists team at modern hospital lab, group of doctors-1

COVID-19 has hit the healthcare industry so hard that many hospitals have been forced to furlough staff, or worse, close their doors. Relief payments from the CARES Act are a lifeline for organizations under enormous economic strain; though the healthcare portions of the legislation are only a few pages long, addendums are being released intermittently, making it easy for administrators — already in crisis mode — to lose track of the very subsidies the legislation provides.  

To help you stay on top of available relief payments and loans, we’ve summarized the opportunities and included links to helpful resources. Think of this blog post as your cheat sheet for financial support that may be available to your organization. 

Medicare and Medicaid allowances during the emergency period

CMS continues to pass waivers aimed at increasing patient capacity, easing administrative burdens, and promoting telehealth. The most recent waivers were added on May 1. In addition, the agency approved over $100 billion in loans to sustain healthcare organizations. Other key payment changes include:

  • A 20-percent increase in hospitalization payments for COVID-19 patients.
  • Relaxed requirements to allow providers to practice at the top of their license.
  • Quality reporting relief, including providing MIPS credits for participating in COVID-19 clinical trials. 
  • Telehealth waivers for broader coverage and payment parity. 
  • Waivers for hospital capacity and testing payment.

Several commercial payers have followed CMS’s lead. They’re also accelerating payments and offering contract restructures, as well as assisting healthcare providers with loans and grants. 

The CARES Act — Provider Relief Fund 

Of the $100 billion available through the Provider Relief Fund, the first round of funding — $30 billion — has already been allocated. However, $70 billion is currently being distributed in the second round of funding. Instead of basing payments on Medicare fee-for-service, this time HHS changed the formula: Relief payments are now based on eligible providers’ 2018 net patient revenue, increasing eligibility for children’s hospitals and other organizations that don’t have a high Medicare patient mix. In addition, this second round of funding includes allocations targeted to healthcare organizations that are especially vulnerable — hospitals in rural areas and COVID-19 hot spots. Here’s how payments are being allocated for round two:    

    • $20 billion to Medicare facilities, based on eligible providers' 2018 net patient revenue
    • $10 billion to hospitals in COVID-19 hot spots
    • $10 billion to rural hospitals and clinics 
    • $30 billion in reserve for skilled nursing facilities, future hot spots, and others. 

As COVID-19 cases continued to climb, HHS knew more funds would be needed, even before the remaining $70 billion was appropriated. So $75 billion was recently added to the Provider Relief Fund through the Paycheck Protection Program (PPP) and Health Care Enhancement Act.

Paycheck Protection Program and Health Care Enhancement Act

This legislation includes $75 billion in funding for healthcare organizations and $25 billion for COVID-19 testing and treatment. HHS should be releasing guidance soon regarding how the money will be allocated. What we do know is that a portion of the funds will be used for test development and administration, with $11 billion reserved for states and $1 billion reserved to compensate labs for testing the uninsured. Also, providers can request to be reimbursed for services provided to uninsured patients.

Small business administration loans

Healthcare organizations with fewer than 500 employees may qualify for small business loans and loan forgiveness programs through the CARES Act. These loans, which aren’t specific to the healthcare sector, come with caveats. The first round of funding was depleted fast, so the second round — available through the PPP and Health Care Enhancement Act — is expected to run out quickly as well.

What’s next...

As the federal government releases additional funds and loans to stem the tide of potential  closures, mergers, and acquisitions, the post-pandemic healthcare landscape will undoubtedly look very different than it did before the coronavirus. How different remains to be seen. Telehealth expansion and relaxed administrative and licensing requirements have all been welcome changes that could stay long after the pandemic is over. We’ll continue to track waivers, as well as funding and loan opportunities, and share that information with you. 

Learn how MEDITECH is supporting healthcare organizations during the COVID-19 outbreak.

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Written by Corinne Proctor Boudreau, Senior Manager, Product Management, MEDITECH

As MEDITECH’s Senior Marketing Solutions Manager for Physician Experience, Corinne is responsible for brand development of our Web EHR physician products. In this role, she monitors trends impacting physicians and keeps healthcare leaders informed of our initiatives through direct interaction and participation at industry events. In addition, she focuses on strategy for our case studies and white papers, showing the importance of EHRs in telling the complete patient story across the care continuum. With over two decades of experience in our industry, Corinne is passionately committed to helping clinicians with their efficiency, and helping patients with accessing the best care.
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