Hospitals Cheer $4B in New Funding for Safety Nets, Rural Hospitals

But more funding will be needed, and soon, hospital stakeholders say.

The federal government's announcement that it will provide another $4 billion in emergency funding to hospitals slammed by the coronavirus pandemic was greeted with cheers by industry stakeholders, who also suggested that more funding will be needed.

Safety net hospitals will get a $3 billion slice of this latest CARES Act Provider Relief Funds payment, part of a package of emergency funds that have already sent more than $175 billion to hospitals and other healthcare providers over the past four months.

This latest round of funding, which will be divided among 215 acute care hospitals, is in addition to the $10 billion in CARES Act funding that safety nets received in June. In total, the federal government has sent $12.8 billion in direct payments to 959 safety net hospitals across the nation, the Centers for Medicare & Medicaid Services said.  

The remaining $1 billion in this latest Provider Relief Fund disbursement will go to rural hospitals, and smaller hospitals in metropolitan areas with high concentrations of Medicaid patients, CMS said. In May, nearly 4,000 rural hospitals shared $10 billion in Provider Relief Funds.

"We've been distributing the Provider Relief Funds as quickly as possible to those providers who have been hardest hit by the pandemic," Health and Human Services Secretary Alex Azar said.

"Close work with stakeholders informed how we targeted this new round of funds to hard-hit safety-net and rural providers," he said.

Bruce Siegel, MD, president and CEO of America's Essential Hospitals, said the latest round of funding "will help ease the severe financial pressure many face. But gaps remain, and more support is needed."

"We appreciate the administration's efforts to correct earlier funding gaps that left many essential hospitals without the support they need; but there is more work to do," Siegel said.

"This is an unprecedented public health emergency that has taken a disproportionately heavy toll on the communities that essential hospitals serve. It has put these hospitals in a precarious position that demands an ongoing commitment of federal support," he said.

The American Hospital Association estimates that the nation's hospitals could lose $323 billion or more through the end of 2020, owing to collapsing patient volumes.

"Hospitals with high Medicaid volume provide care to our most vulnerable patients and communities, many of which have suffered disproportionately from this virus," AHA President and CEO Rick Pollack said.

"Even before the pandemic these hospitals operated under serious financial pressure, and these funds will help them continue to stay open and provide care to all who need it," he said.