October 30, 2020
BRUNSWICK, ME – Following U.S. Senator Angus King (I-Maine)’s letter earlier this month with 24 colleagues to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, the Administration has expanded relief funding eligibility for rural healthcare providers and updated requirements to preserve providers’ access to the Provider Relief Fund (PRF) created as a response to the coronavirus pandemic.
“Rural healthcare providers are on the frontlines of combatting this public health crisis and protecting our communities from coronavirus outbreaks, particularly now that the pandemic is spreading into less populated areas,” said Senator King. “With Maine as one of the most rural states in the nation, our state has a vast need for healthcare providers and cannot afford to lose a single one due to job cuts and a lack of funding. I’m glad that HHS has listened to my colleagues and I, who represent thousands of providers across the country; I’ll keep pushing to ensure that these frontline workers have the resources they need to protect themselves, treat patients, and control outbreaks in our communities.”
In response to the Senators’ October 9th letter, HHS will now allow more flexibility for providers in using PRF proceeds so that they can continue to respond to all of the challenges posed by the coronavirus pandemic. Specifically, HHS will now stick by their June guidelines and require healthcare providers to calculate lost revenue by comparing actual 2020 revenue with budgeted 2020 revenue or with 2019 revenue, rather than directing providers to use net operating income to calculate lost revenue. This will help to protect patients’ access to care and prevent providers — especially rural hospitals and hospitals that serve high-numbers of low-income, elderly, and severely ill patients — from being forced to return PRF funds that they have already received.
HHS released initial reporting requirements in June for providers receiving PRF funds that directed these entities to define lost revenue as “any revenue that you as a health care provider lost due to coronavirus, ” but HHS released updated reporting requirements on September 19 that directed providers to instead use changes in their net operating income to calculate lost revenue – a substantial change from the initial June guidance that was expected to reduce the amount of lost revenues that providers are able to report. That shift in reporting requirements would have changed the terms of the relief as hospitals and health systems initially understood them and likely created further uncertainty for providers at a time when they are already facing serious financial challenges.
A member of the Bipartisan Policy Center’s Rural Health Care Task Force, Senator King has pushed to make sure America’s medical professionals and healthcare infrastructure have the tools they need to treat coronavirus patients and protect themselves. In recent months, he joined video calls to hear directly from the “Choose To Be Healthy Coalition” at York Hospital, and Northern Light Health. Earlier this month, he cosponsored legislation that would adjust a CMS loan program in order to reduce interest rates for healthcare providers struggling to manage the financial pressures created by the pandemic. He has cosponsored bipartisan legislation that would extend a lifeline to rural hospitals and providers and the 60 million Americans who depend on them for health care by providing immediate financial relief, stabilize hospitals, and encourage hospital coordination. Senator King joined the Maine delegation to take action to protect access to healthcare and preserve important economic drivers in rural Maine. He has also urged the FCC to expand access to telehealth services in rural communities, and joined a bipartisan group of Senators calling for telehealth expansions included in coronavirus relief legislation to be made permanent.
Full text of the Senator’s October 9 letter can be found HERE and below.
Dear Secretary Azar:
We write to express our concerns regarding the recent change in reporting requirements for health care providers that have received emergency relief through the Provider Relief Fund (PRF) and to respectfully request that you reinstate the original reporting requirements for determining lost revenue that the Department of Health and Human Services (HHS) first released in June of this year.
As you know, the CARES Act established the PRF to reimburse health care providers for health care-related expenses or lost revenue due to the coronavirus pandemic. The PRF has been critical in helping hospitals and health care systems across the country navigate the serious financial challenges posed by this pandemic, preventing many providers from being forced to permanently close their doors.
As a condition for receiving PRF funds, the CARES Act required these recipients to submit reports and maintain documentation to certify their compliance with program requirements. In June, HHS released initial guidance outlining some of these reporting requirements and directed providers to calculate lost revenue by comparing actual 2020 revenue with budgeted 2020 revenue or with 2019 revenue. On September 19, HHS released updated reporting requirements that directed providers to use net operating income to calculate lost revenue—a substantial change from the directions issued in June.
We have heard from hospitals and health systems in our states who are concerned that this change in the definition of lost revenue will force them to return funds to HHS that they have received from the PRF. In particular, rural hospitals and those that serve high numbers of low-income, elderly, and severely ill patients—which already operate on thin financial margins—may be especially impacted by this change.
We are concerned that this change in reporting requirements changes the terms of the relief as providers initially understood them based on the initial June guidelines—further exacerbating the financial challenges and uncertainty that these systems continue to grapple with as a result of the pandemic. Therefore, we respectfully request that you reinstate the original June requirements for determining lost revenue in order to prevent unnecessary financial uncertainty for hospitals and health care providers and to prevent them from being forced to return PRF funds that they have already received.
Thank you for your time and attention to this important measure. We look forward to working with you to continue supporting our hospitals and ensuring that this pandemic does not cause further, long-term disruptions to Americans’ access to care.