Over $25 billion in Provider Relief Funds still not spent, says report

por John R. Fischer, Senior Reporter | November 03, 2021
More than $25 billion in Provider Relief Funds for COVID-19-related care remains unspent
Since the start of the pandemic, Congress has pledged $178 billion in the Provider Relief Funds via the CARES Act to help hospitals navigate the financial toll that COVID-19 has brought upon them. While helpful, over $25 billion of those funds remain unspent, with some of the money even returned and not redistributed to those in need.

According to a report prepared by researchers at the Urban Institute, $11.7 billion has been allocated but not spent and $7.1 billion has not been allocated at all. An additional $8 billion was returned by healthcare organizations that said “they did not need the money because they had gained experience managing operations and expenses as the pandemic progressed, or they recovered sooner than expected." Others have asked for more time to spend the money.

“As the pandemic persists, we now have greatly improved knowledge of how to treat patients with Covid-19, and also a better understanding of how providers have used (or returned) emergency grants. Policymakers have an opportunity to consider how best to target the remaining funds in the Covid-19 Provider Relief Fund to healthcare providers to support providers who have been hardest hit by the pandemic and continue to have the greatest needs,” said Teresa A. Coughlin, a senior fellow at the Urban Institute, in a statement.

Among those that have returned funds are Kaiser Permanente, which sent back $500 million, and HCA Healthcare, which gave back $1.6 billion.

Since April 2020, the Department for Health and Human Services has released a portion of total funds as part of general distribution to providers and another portion as part of targeted distributions for providers hit hard by the pandemic. Healthcare systems and hospitals have about a year to spend the funds or must return the money, according to MedCity News. As a result, the authors of the report say the Provider Relief Fund’s balance is likely to go up as several facilities will need to return some of the grants because they are unable to use it all within HHS’ timeline.

Funds received in the first half of 2021 must be spent by June 30, 2022. Those received in the second half of the year must be spent by December 31, 2022. The American Hospital Association is advocating for HHS to allow providers who need the money to hold on to it until the pandemic ends.

“Hospitals and health systems need more flexibility to retain the funding they have already received. We again urge you to consider revising your guidance to enable recipients to retain access to the funds they have already received through the later end of the COVID-19 public health emergency (PHE) or June 30, 2022,” AHA wrote to HHS in a letter in August. It added that it strongly believes that providers should have continued use of PRF money “to prevent, prepare for, and respond to coronavirus,” regardless of when they happened to receive a PRF payment.

HHS recently announced in September that it would supply additional relief of $25.5 billion to smaller and rural providers as part of the fourth phase of Provider Relief Fund grants. This includes $17 billion in grants for smaller providers under financial strain and serving vulnerable communities and $8.5 billion allocated in the American Rescue Plan Act grants for rural Medicare, Medicaid and CHIP providers, according to Modern Healthcare.

The report was compiled using the most recent publicly available information to review how grants from the Provider Relief Fund have been allocated into general and targeted distributions and paid to providers. Funding for the report was provided by the Robert Wood Johnson Foundation.

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