The AHA had asked for the guidance after noting that it wasn't clear if the PPP loans were available for public hospitals.
The Small Business Administration has made clear that some public hospitals are eligible for Paycheck Protection Program loans of up to $10 million.
Under guidance issued this week, the SBA said that: "Section 1102 of the CARES Act defines the term 'nonprofit organization' as 'an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and that is exempt from taxation under section 501(a) of such Code.'"
PPP makes loans of up to $10 million for organizations with fewer than 500 employees or that meet other criteria. The terms of the loan provide that up to 75% of the debt may be forgiven if the money is used for payroll costs.
The American Hospital Association had asked for the guidance on April 8 after noting that "it is not clear whether public hospitals, including those that also are described under Section 501(c)(3) and exempt under Section 501(a), will be considered businesses owned by municipalities or other political subdivisions that are ineligible for loans under the 7(a) business loan program, specifically 13 C.F.R. § 120.110(j)."
"Section 1102 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act specifically makes loans under the PPP available to nonprofit organizations," Ashley Thompson, AHA's senior vice president, Public Policy Analysis & Development, said in the letter to SBA Administrator Jovita Carranza.
"The statutory language should override any limitations that existed prior to the enactment of the CARES Act so that any nonprofit organization described in section 501(c)(3), including a public hospital, may qualify for a loan under the PPP," Thompson said.
In response, SBA said this week that the Trump Administration and the Treasury Department "understand that nonprofit hospitals exempt from taxation under section 115 of the Internal Revenue Code are unique in that many such hospitals may meet the description set forth in section 501(c)(3) of the Internal Revenue Code to qualify for tax exemption under section 501(a), but have not sought to be recognized by the IRS as such because they are otherwise fully tax-exempt under a different provision of the Internal Revenue Code."
The SBA said nonprofit, tax-exempt hospitals will meet the federal tax code's Section 115 definition of a "nonprofit organization" under section 1102 of the CARES Act "if the hospital reasonably determines, in a written record maintained by the hospital, that it is an organization described in section 501(c)(3) of the Internal Revenue Code and is therefore within a category of organization that is exempt from taxation under section 501(a)."
"The hospital's certification of eligibility on the Borrower Application Form cannot be made without this determination," SBA said.
From March 1 through June 30, hospitals are projected to lose about $50 billion a month.
A new report released Tuesday by the American Hospital Association projects that the nation's hospitals will book $202.6 billion in losses through the end of June due to the coronavirus pandemic.
The report dropped as the AHA presses Congress and the Trump administration for another round of bailouts.
"America's hospitals and health systems have stepped up in heroic and unprecedented ways to meet the challenges caused by COVID-19. However, the fight against this virus has created the greatest financial crisis in history for hospitals and health systems," AHA president and CEO Rick Pollack said in comments accompanying the report.
The report looked at the total financial impact on hospitals and health systems revenues from March 1 through June 30, including the costs of COVID-19 hospitalizations, the effect of canceled elective services due to COVID-19 on hospital revenue, and the additional costs for buying personal protective equipment.
Some hospitals are incurring additional costs by providing childcare, housing, and transportation for frontline workers.
"While we appreciate the support and resources from Congress and the Administration, many hospitals are still on the brink," Pollack said. "We need further support and resources to ensure that we can continue to deliver the critical care that our patients and communities are depending on while also ensuring that we are prepared for the continuing challenges we face from this pandemic as well as other potential emergencies."
AHA said the report may be lowballing the losses because it does not factor in other pandemic-related costs, such as increases in drug and labor costs.
The report also estimates losses only through June 30, and it's not clear when the nation will return to some sense of normalcy.
"Hospitals will likely continue to see lower service use while treating COVID-19 patients beyond June 30, which would result in continued financial pressures," the report said.
The rule change was part of a broad package of waivers and rules shifts that were brought forward Thursday by CMS in to facilitate COVID-19 testing and expand access to telehealth.
The Centers for Medicare & Medicaid Services on Thursday said it will bump up payments for audio-only telephone consultations to match payments made for office and outpatients visits.
The new rule would increase payments for audio-only telephone consultations from $14-$41 to about $46-$110, CMS said in a media release.
The rule change was part of a broad package of waivers and rules shifts that were brought forward Thursday by CMS in to facilitate testing and expand access to telehealth.
Physician associations cheered the news.
The American Medical Association called the pay parity "a major victory for medicine that will enable physicians to care for their patients, especially their elderly patients with chronic conditions who may not have access to audio-visual technology or high-speed Internet. This change will help patients address their health challenges that existed before COVID-19."
Jacqueline Fincher, MD, president of the American College of Physicians, said the "change in payment policy addresses one of the biggest issues facing physicians as they struggle to make up for lost revenue and provide appropriate care to patients."
"ACP has repeatedly requested this change from CMS as the country has been dealing with the COVID-19 national emergency and we are heartened that they have heard our concerns," she said.
Fincher said the increased payments are coming at a critical time for both providers and their patients.
"Right now, due to a drastic decrease in in-office patient visits, many practices are struggling to remain open and continue providing needed care," she said. "Many seniors and other vulnerable patients lack the capability to conduct video visits with their physicians, so those patients are being cared for with telephone-only visits that were reimbursed at a much lower rate."
The Iowa-based health system provided no explanation for Vermeer's sudden departure, which came just days after UnityPoint announced COVID-19-related furloughs and layoffs.
UnityPoint Health President and CEO Kevin Vermeer abruptly resigned this week from the health system he has led for four years.
The West Des Moines, Iowa-based UnityPoint provided no explanation for Vermeer's sudden departure, which came just days after UnityPoint announced COVID-19-related furloughs and 15% pay cuts for executives.
Sue Thompson, MS, BSN, senior vice president of integration and optimization and CEO of UnityPoint Accountable Care, will serve as interim CEO while a national search is conducted for Vermeer's permanent replacement, UnityPoint said in a media release.
Vermeer had been with UnityPoint for more than 20 years, serving in a number of leadership capacities, including CFO in the Waterloo and Quad Cities regions and as CFO and then Chief Strategy Officer of the System.
Citing federal filings, the Des Moines Register reported that Vermeer's annual compensation in 2018, topped $1.7 million.
"We greatly appreciate Kevin's leadership and service over the past 20+ years," UnityPoint Board Chairman Randy Easton said. "Continued strong, innovative leadership is critical now more than ever before and we are fortunate to have Sue Thompson taking the helm during this time of transition."
Vermeer was credited with helping to develop UnityPoint's population health strategy, negotiating the Joint Operating Agreement with UW Health, forming partnerships in care financing, and creating a common set of FOCUS values for the health system's
At that time, Vermeer said UnityPoint walked away from the deal after the health system "concluded we can most effectively fulfill our mission by maintaining our existing corporate structure."
In addition to her experience as a bedside nurse, Thompson has more than 30 years of extensive leadership experience at UnityPoint Health in regional operations and clinical performance improvement. Most recently, she has played a part in UnityPoint Health's response to the COVID-19 pandemic and previously served as CEO of the system's Fort Dodge region.
Thompson began her career more than 30 years ago as a bedside nurse and has served in leadership roles for clinical and operational improvements across. Most recently, she has played a key role in UnityPoint Health's response to the COVID-19 pandemic, UnityPoint said.
UnityPoint is the nation's 13th largest nonprofit health system, with more than 30,000 employees, and 40 regional and community hospitals and other health venues across Iowa, western Illinois and southern Wisconsin.
The university self-disclosed the overcharges to NIH and HRSA by a professor at the T.H. Chan School of Public Health.
Harvard University will pay more than $1.3 million to settle allegations that its T.H. Chan School of Public Health overcharged the federal government for healthcare research-related grants,the Department of Justice said.
The overcharges, which Harvard self-disclosed, were for grants funded by the National Institutes of Health and the Health Resources & Services Administration between 2009 and 2014 for Donna Spiegelman, at the time, a professor of Epidemiology at Chan, DOJ said.
Specifically, DOJ said, Spiegelman and her team distributed their time across all grants for which they provided statistical support, without accurately accounting for the time they actually spent on particular grants.
DOJ said Spiegelman also overstated her time and effort on a HRSA-funded President’s Emergency Plan for AIDS Relief grant, on which she was a researcher.
This settlement also resolves allegations that Chan administrators either knew or should have known that Spiegelman's actions would result in overcharges to the federal government.
Chan didn't review Spiegelman's records to determine whether she and her team had overcharged grants, despite questions being raised for several years about these timekeeping practices.
A survey of more than 1,000 elderly adults found that 39% canceled or delayed non-essential medical treatment, 32% cancelled primary care and 15% cancelled an essential medical treatment.
More than half (55%) of adults age 70 or older have experienced disruptions in their medical care in the first month of social distancing for the coronavirus pandemic, a new nationwide survey shows.
The survey of 1,039 elderly adults, taken between April 10-15 by NORC at the University of Chicago, also found that 39% of respondents canceled or delayed non-essential medical treatment, 32% cancelled primary or preventive care and 15% cancelled an essential medical treatment.
"The first month of social distancing in America certainly saved lives, and yet it also created a situation where many older adults are not getting the care they need to manage serious health conditions," said Bruce Chernof, MD, president and CEO of The SCAN Foundation, which co-commissioned and designed the survey with The John A. Hartford Foundation.
"As our nation grapples with when and how to reopen, the healthcare system will reckon with unaddressed medical needs and learn how to maximize new protocols to care for older adults with complex needs in flexible, person-centered ways," Chernof said.
The survey shows that respondents are primarily concerned (39%) about interruptions in their care regime, compared to other concerns, such as staying physically active (37%), support for daily living (39%) and finding mental stimulation (23%).
Nearly one-in-five respondents (21%) of respondents used telehealth since the start of the pandemic. Of those who did, 49% said it was about the same as an in-person visit, and only 4% said it was "much worse."
"Telehealth is a lifeline for many who need clinical care during this pandemic,” said Terry Fulmer, RN, president of The John A. Hartford Foundation.
"Healthcare organizations have stepped up quickly to help older adults get their care needs met with this important technology. Comfort levels with telehealth vary, but we are seeing rapid uptake in both urgent and primary care delivery. The survey results offer a promising glimpse into the future," Fulmer said.
The survey also found that:
23% said that their clinicians proactively checked on them in the weeks after confinement through telehealth, and 23% said their provider reached out to them since the start of the pandemic to check on their well-being, outside of a normally scheduled appointment.
83% said they are prepared to self-isolate for several months, if need be, to protect themselves and others. However, 33% said they've felt pangs of loneliness, and spend their abundant free time on hobbies, watching TV, chatting with families, and physical activities.
Healthcare professionals (61%) are seen as the most trusted sources on coronavirus information by seniors, followed by non-elected public health officials (53%). Elected state officials (33%), news sources (31%), church (20%), and elected federal officials (20%) fared considerably worse.
Monday's 8-1 ruling by the high court overturns a 2018 ruling from a federal appeals court.
The U.S. Supreme Court on Monday reversed an appeals court and said in an 8-1 ruling that the federal government must pay the $12 billion it owes health insurance companies that took part in the Affordable Care Act's "risk corridor" program.
"We conclude that §1342 of the Affordable Care Act established a money-mandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims," Justice Sonia Sotomayor wrote in the court's opinion.
Speaking on background, a spokesperson for Health and Human Services said the department "is disappointed in the court's ruling."
"The "risk corridors" were a concession that the Obama administration made to health insurers who were wary of participating in the ACA's online exchanges that had removed critical enrollment eligibility restrictions such as a ban on pre-existing conditions.
The consolidated case—which was brought separately by Maine Community Health Options, Moda Health Plan Inc., and Land of Lincoln Mutual Health Insurance Co.—argue that the risk corridor obligated HHS to make payments for years 2014-2016 that the law intended "to induce insurer participation in the health insurance exchanges by mitigating some of the uncertainty associated with insuring formerly uninsured customers."
The payers had contended that because the amounts collected under the risk corridor program for 2014 "came nowhere close to what the government owed to insurers," the government paid out only 12.6% of the total owed for the year, prorating the funds it owed to each insurer.
Both the Obama and Trump administrations had argued that because Congress between 2015 and 2107 limited payments for the risk corridor program, the federal government had no obligation to pay.
Writing in dissent, Justice Samuel Alito said the majority's ruling "has the effect of providing a massive bailout for insurance companies that took a calculated risk and lost. These companies chose to participate in an Affordable Care Act program that they thought would be profitable."
Plaintiffs' attorney Mark Rust, who advised Land of Lincoln, said the ruling "has made it possible to trust in government promises, even if they are broken in the midst of discord and dis-function."
"Even though the delay in appropriations cost Land of Lincoln its business, at least the people of the state of Illinois are going to be made whole by the aggressive actions here of its liquidator," he said. "It should help all of us trust in the letter of the law again."
Monday's ruling by the high court overturns a 2018, 2-1 ruling from the U.S. District Court of Appeals for the Federal District, which had ruled that "although section 1342 obligated the government to pay participants in the exchanges the full amount indicated by the formula for risk corridor payments, we hold that Congress suspended the government's obligation in each year of the program through clear intent manifested in appropriations riders."
The appeals court also rued that "the circumstances of this legislation and subsequent regulation did not create a contract promising the full amount of risk corridors payments."
Payers Cheer Ruling
America's Health Insurance Plans CEO Matt Eyles said the federal government was attempting to renege on "a clear commitment in the interest of building stable markets and making coverage more affordable for individuals and small employers."
"Health insurance providers kept their commitments while incurring substantial losses," Eyles said. "We appreciate that today’s Supreme Court 8-1 decision ensures that the federal government honors the obligations it made for services the private sector already delivered."
Margaret A. Murray, CEO of the Association for Community Affiliated Plans, said the ruling "upholds the integrity of the full faith and credit clause. It emphasizes the argument we have made all along—the government can't renege on an unambiguous commitment in federal law."
“ACAP-member plans entered the Marketplace with the clear understanding that risk corridor payments would take place as set forth in Federal law," Murray said. "The government reneged, but our plans didn't. They provided quality, affordable care to millions of Americans only to have the government leave them unpaid bills totaling hundreds of millions of dollars."
Murray said allowing the government to renege on its debts would have created a dangerous precedent.
"It's absurd to ask health plans – or anyone else doing business with the United States government – to price in the notion that Congress might arbitrarily walk away from commitments it makes in Federal law," she said. "We're relieved the Supreme Court agrees."
The estimates could be used as a reference point for policymakers and politicians trying to grapple with the costs of reopening the economy.
The cost of providing healthcare for Americans stricken with COVID-19 could hit $654 billion, depending upon how many people contract the disease, according to a new study in Health Affairs.
Using a "Monte Carlo simulation model" of the U.S. population, researchers from public health schools in New York and California estimate that the direct medical costs for a single, symptomatic COVID-19 infection would be a median of $3,045, incurred only in the course of the infection.
"At the beginning of each simulation run, we determine what percentage of the population ends up getting infected (i.e., the attack rate) with the age distribution of cases matching the reported age distribution of COVID-19 cases," the researchers wrote. "Each infected person then travels through a probability tree of different possible sequential clinical outcomes."
The researchers estimated that if 80% of the U.S. population was infected, that could result in 44.6 million hospitalizations, 10.7 million ICU admissions, 6.5 million ventilators used, and 249.5 million hospital bed days, at a total direct cost of $654.0 billion during the pandemic.
Using the same formula, if 50% of the U.S. population were infected, there would be 27.9 million hospitalizations, 4.1 million ventilators used and 156.2 million hospital bed days, costing about $408.8 billion.
If 20% of the population became infected, there would be a median of 11.2 million hospitalizations, 62.3 million hospital bed days, and 1.6 million ventilators used, costing $163.4 billion.
The researchers said their estimates could be used as a reference point for policymakers and politicians trying to grapple with the costs of reopening the economy, which could very likely result in more COVID-19 cases.
"Some have suggested herd immunity strategies for this pandemic," said lead author Sarah Bartsch, project director with the Public Health Informatics, Computational, and Operations Research team at the City University of New York Graduate School of Public Health and Health Policy.
"These strategies consist of allowing people to get infected until herd immunity thresholds are reached and the virus can no longer spread. However, our study shows that such strategies could come at a tremendous cost," she said.
The study was a combined effort of the PHICOR, the Infectious Disease Clinical Outcomes Research Unit at the Los Angeles Biomedical Research Institute, Harbor-UCLA Medical Center, and Torrance Memorial Medical Center.
Federal officials say the object of the initial $30 billion blunderbuss distribution of funding was to get money to providers as fast as possible.
The federal government on Friday will begin doling out the remaining $20 million from a $50 billion CARES Act Provider Relief Fund dedicated to helping caregivers pay for the cost of the COVID-19 pandemic and related costs.
The first $30 billion was distributed with a blunderbuss starting with $26 billion on April 10 via direct deposits to any healthcare facilities and providers who got Medicare fee-for-service reimbursements in 2019. The remaining $4 billion of the expedited $30 billion distribution was sent on April 17.
Centers for Medicare & Medicaid Services Administrator Seema Verma told reporters this week that the object of the initial funding was to get money to providers as soon as possible.
"From a broad level, the first tranche of dollars was put out with the aim of getting dollars out very quickly into the healthcare system," she said. "That's something that we heard from providers across the board. They wanted to make sure we got this out quickly," she said.
Even caregivers who shut their doors because of the pandemic were eligible for the funds if they provided diagnoses, testing, or care to patients with possible or actual COVID-19. The kicker is that HHS says it "broadly views every patient as a possible case of COVID-19."
Under the dispersal formula, providers were given a share of the money based on their total Medicare FFS reimbursement in 2019, which totaled $484 million last year.
Using the HHS formula, a provider can estimate their relief payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments by $484 million and then multiplying that ratio by $30 billion. For example, a hospital that billed Medicare for $121 million in 2019 would get $7.5 million in relief. ($121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000)
The funding scheme for the initial $30 billion payout irked safety net hospitals, community health centers and rural providers who said the formula didn’t necessarily get money into the hands of the pandemic's front-line providers, and didn't do much to help providers whose businesses were all but shuttered because of the virus.
America's Essential Hospitals said it appreciates the money, but urged the federal government remove red tape and focus "on ensuring funds reach the essential hospitals on the front lines of this public health emergency and caring for many low-income and uninsured patients."
The safety net hospital association also asked for more time to acquire data requested by the Department of Health and Human Services.
"We call on the department to extend its data submission deadline until it has resolved these technical issues and clearly and publicly communicated how it will use this information," AEH said. "We also urge the administration to streamline access to the various COVID-19 funding sources by minimizing application processes and requirements that create administrative burden."
The Remaining $20B
Starting Friday, CMS will issue more-targeted distribution of the remaining $20 million, augmenting allocations so that the entire $50 billion general distribution is meted out proportionally to providers' share of 2018 net patient revenue.
Ten billion dollars will be given to hospitals in "hot spot" COVID-19 areas, such as in New York, New Jersey, and areas of California.
In distributing the money, HHS says it will consider other factors such as patient mix, reflected in Medicare disproportionate share payments.
The remaining $10 billion will go to rural hospitals and health clinics, which have been in financial straits long before the coronavirus was around.
The distribution will be based on operating expenses, using a methodology that distributes payments proportionately to each facility and clinic, which CMS has acknowledged "are more financially exposed to significant declines in revenue or increases in expenses related to COVID-19 than their urban counterparts."
"NRHA is grateful to President Trump for relief provided today to the rural health care safety net," National Rural Health Association CEO Alan Morgan said. "Hundreds of rural providers were on the brink of closure, and this relief is absolutely critical."
An additional $400 million will be allocated to the Indian Health Service, starting next week and based on operating expenses.
Lawmakers say at-risk ACOs are being held responsible "for the enormous costs that we expect to result from the COVID-19 pandemic, which are outside their control."
Senate leaders are asking the federal government to "waive the shared loss repayment" for Medicare at-risked accountable care organizations that are grappling with "costs beyond their control due to the COVID-19 pandemic."
In a letter sent Tuesday to Centers for Medicare & Medicaid Services Administrator Seema Verma, Senate Finance Committee members Bill Cassidy, MD, (R-LA), and Sheldon Whitehouse, (D-RI), said that the methodologies for at-risk ACOs in the Medicare Shared Savings Program and other Alternative Payment Models hold responsible physicians and hospitals "for the enormous costs that we expect to result from the COVID-19 pandemic, which are outside their control."
"Some stakeholders estimate that the ongoing COVID-19 pandemic could cost Medicare between $38.5 billion and $115.4 billion over the next year, depending on factors such as severity of disease and hospitalization rates," the two senators said.
"Healthcare providers in value-based arrangements will feel the impact of these costs twice: once at the onset and again when their spending is evaluated in the context of their performance in MSSP or another APM," the letter said.
A poll released this month by the National Association of ACOs found that more than half of ACOs in MSSP said they'll "likely" leave the program amid fears of getting stuck with massive financial losses to cover the cost of the COVID-19 pandemic. This year's application deadline for MSSP and APM is May 31, but ACOs can withdraw from the program before that with no penalty.
In their letter, Cassidy and Whitehouse thanked Verma for activating CMS's "extreme and uncontrollable circumstance policy," under which ACOs can get some relief during the pandemic. However, the senators said policy would only "partially address the costs associated with the COVID-19 pandemic and the total financial impact to ACOs."
CMS plans to prorate the 2020 annual losses based on the duration of the public health emergency. For example, if the emergency lasts six months, ACOs would be responsible for half of the losses for the year.
"The policy does not adequately adjust losses for ACOs in hard hit COVID areas and still holds ACOs accountable for the abnormally high costs of providing care during a global pandemic," the Senators said, adding that adjusting ACO benchmarks, risk scores and quality bonuses "will be impractical."
"Therefore, to ensure that risk-based ACOs that have taken on risk for the total cost of care due to longstanding encouragement and program requirements instituted by CMS are not unduly penalized by the COVID-19 pandemic, we urge you to waive the shared loss repayment for ACOs for performance year 2020," the letter said.
The two senators also recommended that CMS push back the May 31 MSSP termination date for at-risk ACOs "in order to provide immediate assurances to ACOs about CMS' intent to formalize in regulation a 2020 waiving of losses."
