HHS Announces the Availability of $25.5 Billion in COVID-19 Provider Funding

The U.S. Department of Health and Human Services (HHS) is making $25.5 billion in new funding available for healthcare providers affected by the COVID- 19 pandemic. This funding includes $8.5 billion in American Rescue Plan (ARP) resources for providers who serve rural Medicaid, Children’s Health Insurance Program (CHIP) or Medicare patients, and an additional $17 billion for Provider Relief Fund (PRF) Phase 4 for a broad range of providers who can document revenue loss and expenses associated with the pandemic. “This funding critically helps healthcare providers who have endured demanding workloads and significant financial strains amidst the pandemic,” said HHS Secretary Xavier Becerra. “The funding will be distributed with an eye toward equity to ensure providers who serve our most vulnerable communities will receive the support they need.”

Consistent with the requirements included in the Coronavirus Response and Relief Supplemental Appropriations Act of 2020, PRF Phase 4 payments will be based on providers’ lost revenues and expenditures between July 1, 2020, and March 31, 2021. PRF Phase 4 will reimburse smaller providers — who tend to operate on thin margins and often serve vulnerable or isolated communities — for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers. PRF Phase 4 will also include bonus payments for providers who serve Medicaid, CHIP and/ or Medicare patients who tend to be lower income and have greater and more complex medical needs. The Health Resources and Services Administration (HRSA) will price bonus payments at the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities and seniors.

Similarly, HRSA will make ARP rural payments to providers based on the amount of Medicaid, CHIP and/or Medicare services they provide to patients who live in rural areas as defined by the HHS Federal Office of Rural Health Policy. ARP rural payments will also generally be based on Medicare reimbursement rates. “We know that this funding is critical for healthcare providers across the country, especially as they confront new coronavirus-related challenges and respond to natural disasters,” said Acting HRSA Administrator Diana Espinosa. “We are committed to distributing this funding as equitably and transparently as possible to help providers respond to and ultimately defeat this pandemic.”

To expedite and streamline the applica-tion process and minimize administrative burdens, providers will apply for both programs in a single application. HRSA will use existing Medicaid, CHIP and Medicare claims data in calculating payments. The application portal opened Sept. 29, 2021. To help ensure these provider relief funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with, or acquisition of, another healthcare provider during the period in which they can use the payments. Providers who report a merger or acquisition may be more likely to be audited to confirm their funds were used for coronavirus-related costs, consistent with an overall risk-based audit strategy.