On April 22, 2020, HHS updated their provider relief website with additional information about how they plan to spend the rest of the $100 billion allocated for healthcare providers by the CARES Act.
In this update, HHS made it clear that rural health clinics and rural hospitals will receive $10 billion. Specifically, the announcement states:
Allocation for rural providers
$10 billion will be allocated for rural health clinics and hospitals, most of which operate on especially thin margins and are far less likely to be profitable than their urban counterparts.
- This money will be distributed as early as next week on the basis of operating expenses, using a methodology that distributes payments proportionately to each facility and clinic.
- This method recognizes the precarious financial position of many rural hospitals, a significant number of which are unprofitable.
- Rural hospitals are more financially exposed to significant declines in revenue or increases in expenses related to COVID-19 than their urban counterparts.
We do not know the exact methodology CMS will use to allocate this money between hospitals and rural health clinics but it will be based at least somewhat on operating expenses.
When we learn more about the details we will be sure to get those out.
This $10 billion is not to be confused with the $225 million RHCs are set to receive as a part of the “phase 3.5” legislation. Instead, this “provider relief” money is to help providers make up lost revenue while the money in the “phase 3.5” legislation is designed to help providers with COVID-19 testing and related expenses.
While, the COVID-19 crisis has undoubtedly been heartbreaking and very difficult for rural providers, it is nice to see that Congress and the Trump Administration are recognizing our issues and dedicating resources to bolster the rural health community. We strongly believe that this is the byproduct of the entire rural health community standing up and advocating to our policy makers over the years.