Federal Dollars Still Undistributed

May 22, 2020

NYS Council members, 

Earlier this week we sent you (attached) a chart put together at our request by staff at the National Council that tracks various emergency stimulus bill appropriations for healthcare providers during the COVID-19 crisis.  The chart also documents pots of money that have yet to be distributed to providers (I highlighted these provisions in yellow) including certain Medicaid providers. As you can see there is a total of $175B awaiting disbursement. 

According to our sources, although the money has been earmarked for Medicaid providers in hot spot areas, and providers that rely solely on Medicaid income, the federal government has not been able to identify a vehicle for getting the money to eligible providers.  Apparently, there is a requirement that there not be any ‘middle man’ in the process, meaning that Medicare has to find a way to get these funds directly to Medicaid providers.  The story below rounds out the discussion of what appears to be happening in Washington.  

Our job is to press members of the NYS delegation and others to lean on the federal agencies responsible for delivering these funds, and to ensure the money does not suddenly disappear.  We are in very regular contact with our colleagues at the National Council who we know have been pushing on federal leaders to move the money.  We will continue to advocate for its’ immediate release.

Trump administration slow to distribute grants to Medicaid providers

Rachel Cohrs, Modern Healthcare, 5/22

Eight weeks after Congress created a $100 billion fund to aid providers struggling due to the COVID-19 pandemic, some providers that serve women, children and vulnerable populations still haven’t gotten any of the money.

CMS sent payments at warp speed to hospitals and providers that bill fee-for-service Medicare, starting distribution two weeks after the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The distribution wasn’t perfect — HHS sent funds to hospitals that had closed and several insurers that ended up returning the money. But the department has taken the opposite approach in sending money to Medicaid providers.

“The pace on this is glacial. It’s difficult to make sense of. Providers have spoken out, the media has covered this story, and they are acting as if we are not in the middle of a pandemic,” Manatt Health managing director Jocelyn Guyer said.

Certain specialties like pediatrics, OB-GYN and behavioral health have suffered revenue drops as volume has fallen like the rest of the healthcare system, but they haven’t been eligible for aid. 

HHS sent out distributions totaling $50 billion in April, but providers were only eligible if they had billed Medicare fee-for-service. The department has said a tranche of funding is coming for providers that “solely take Medicaid” is coming, but they have not announced the amount or timing of such funding. CMS asked states for more provider-level data on May 1 but hasn’t yet sent out any more money using the data. 

One stakeholder following the distribution said HHS’ choice to slow-walk the funding fits the larger trend of the Trump administration’s distrust of state administration of the Medicaid program, pointing to the Medicaid Fiscal Accountability Regulation that would give states less latitude to determine how much they pay Medicaid providers. 

An HHS spokesperson said Secretary Alex Azar is making certain that his approach represents the best thinking across the government, including the task force and the highest levels of the government. 

In the meantime, providers in these overlooked specialties are facing grim financial circumstances. Skye Perryman, chief legal officer of the American College of Obstetricians and Gynecologists, said the group is hearing members are being forced to furlough employees or consider shutting down. Delaying funds to some women’s health providers runs counter to congressional intent, Perryman argued. 

“If the agency does not rapidly distribute funds cover, are going to see a crisis for women’s health,” Perryman said. “With each passing week, the financial strain becomes more urgent.”

The American Academy of Pediatrics is also pushing for the funding to be sent out quickly, as its members have also had to lay off staff and consider closing, which could have a long-term impact on the pediatric workforce. The group acknowledged Medicaid data is decentralized, but said that getting funds out is urgent for its members who have received no support so far.

ACOG and AAP have members that accept some Medicare patients, and qualified for the first round of of general funding. But that wasn’t enough, advocates say. AAP estimated its members who did qualify received roughly a week’s worth of operating revenue. 

Guyer also pointed out that community-based providers had to submit paperwork to ensure they received their full share of general grant funds, and some may not have done so.

Children’s hospitals, which were eligible for the first round of grant funding, also appealed to Azar asking for more Medicaid-focused aid.

“All the national relief benefits advanced through the Medicare program cannot reach or support our children’s hospitals,” more than 70 CEOs of children’s hospitals wrote in a letter dated May 18.

Providers with heavy Medicaid payer mixes were disadvantaged by CMS’ $100 billion Medicare Accelerated and Advance Payment program that helped other providers maintain cash flow, and received proportionally less grant money than providers that have high private insurance revenue.

HHS hasn’t made its definition clear for the Medicaid-specific tranche yet, but there’s a chance providers that accept a small number of Medicare patients won’t be eligible for any more money. HHS has not said how it plans to send out $75 billion Congress allocated to refill the fund.

“There are lots of demands on this residual money. It may take a really long time to get to a little bit of money that might not be well-targeted,” Guyer said.